The Federal Trade Commission is dispersing over $1.2 million in refunds to consumers who fell victim to Consumer Defense, a deceitful mortgage modification ruse.
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Refund Procedures and Guidelines
The FTC is disseminating payments to a total of 6,261 consumers; each individual refund amounts to $201.34. It is asked that recipients cash their checks within a 90-day timeframe as stipulated on the check. For any queries or doubts regarding their repayment, consumers may reach out to the refund manager, JND Legal Administration, at 877-595-0141 or visit the FTC’s official webpage for commonly asked questions. It is crucial to note that the Commission never asks consumers to pay money or share account details to receive a refund.
Background of the Case
In correspondence with the FTC’s 2018 document, Consumer Defense operated under several pseudonyms, including Preferred Law and American Home Loan Counselors. They mislead financially troubled homeowners by falsely assuring to deter foreclosure and make their mortgages more manageable. The culprits typically persuaded homeowners to pay unlawful preliminary fees in recurring monthly installments of $650, incorrectly promising professional legal aid. Regrettably, consumers spent hundreds, even thousands of dollars only to discover the defendants had not procured the guaranteed loan modifications, and in several scenarios, had never established contact with the lenders.
Legal Proceedings and Outcome
In 2019, a federal court ruled in the FTC’s favour, decreeing that the defendants’ assets should be forfeited to the FTC and liquidated to distribute refunds to the injured consumers. The defendants nevertheless appealed the verdict, which was not finalized until 2022 when an appellate court sustained the ruling but remanded the case back to the district court to recompute the monetary judgment according to Section 19 of the FTC Act, following the U.S. Supreme Court’s 2021 pronouncement that the Commission has no authority under Section 13(b) of the FTC Act to seek monetary restitution in federal court. In 2023, the district court determined a monetary judgment under Section 19 of the FTC Act for the defendants’ breaches of the Mortgage Assistance Relief Services Rule.
Detailed Refund Data
An interactive dashboard for refund information issued by the Commission delivers a comprehensive, state-by-state analysis of refunds in FTC cases.
