Girardi | Keese

Government-initiated business litigation halts illegal activity

When California residents think of civil litigation, they may first consider the legal claims that come from physical damage or injuries suffered in car accidents, falls or other such events. In reality, personal injury comes in a variety of guises and can even be financial in nature. Some state and federal government agencies are stepping up to halt illegal mortgage relief activity that is hurting consumers, for example.

Since 2008, the Federal Trade Commission has brought actions against fraudulent relief schemes in 48 cases. The FTC isn't alone in its fight -- the Consumer Financial Protection Bureau joined the federal agency and other state organizations in what is called Operation Mis-Modification. The operation is targeting companies that prey on individuals who are in desperate mortgage situations.

The FTC Bureau of Consumer Protection director said the illegal mortgage scheme can do additional harm to financial situations that are already risky. One goal of the operation is to halt operations that make empty promises about mortgage relief or charge up-front fees illegally.

On July 23, the FTC charged six mortgage relief companies with violating the Mortgage Assistance Relief Services Rule as well as the FTC Act. According to the rules, relief providers cannot charge fees until the homeowner has received a written offer from an acceptable lender or service provider.

Some of the defendants in the cases brought by the FTC charged up-front fees of hundreds or thousands of dollars, though not every homeowner benefited from the services. Some consumers were told to stop paying mortgages while the relief paperwork was pending, and others were told there was an 85 to 100 percent chance of success.

Individuals who are faced with illegal or unethical business practices don't have to settle for what they are being provided. There are a number of civil litigation options open to the individual, including the possibility of combining forces in a class action suit.

Source: InsuranceNewsNet, "Federal and State Agencies Stop Phony Mortgage Relief Schemes" Jul. 23, 2014

No Comments

Leave a comment
Comment Information

IN THE NEWS

The Soto Verdict

Girardi | Keese attorneys have won a $2.3M verdict for a Long Beach resident run over by a Parks & Rec truck. Read more here.

The Madero Verdict

Attorney Christopher T. Aumais persuaded a San Bernardino County jury to deliver an  exceptionally high verdict in an area known for low jury awards.

A Champion of Justice

Partner Amy Fisch Solomon was a Champion of Justice in 2015, proving that success in law isn't just about the size of your verdict or settlement.

Own a VW Diesel?

Read about VW's emissions scandal and 
our class action against the automaker.

Referrals

Learn About Our Referral Network Read More

Our Attorneys

Meet our award-winning team Read More

AWARDS & RECOGNITION

The true measure of a lawyer isn’t the awards, but what the awards say about the lawyer: dedication and commitment to the client.

Super Lawyers Distinguished AV | Lexis Nexis | Martindale-Hubbell | Peer Review Rated For Ethical Standards and Legal Ability American Association For Justice Consumer Attorneys Association Of Los Angeles Consumer Attorneys California Supreme Court Icon 7 Icon Best Lawyers | Best Law Firms 2014 | U.S. News American Board of Trial Advocates Law Dragon America's Top 100 Attorneys | Lifetime Achievement