A company that falsely claimed it could help homeowners avoid foreclosure—and charged up to $2,500 for the phantom service—must repay all its victims, according to the Federal Trade Commission. The company, Florida-based Home Assure, stole between $1,500 and $2,500 from each victim.
Now those victims—1,410 in all—are getting their money back. The FTC began mailing the checks this week. The refunds will total $2.3 million, according to an FTC press release.
“These operators targeted consumers who were on the brink of financial disaster, and instead of holding them back, they pushed them over,” FTC Chairman Jon Leibowitz said in a press release. “If you’re worried about keeping your home, avoid any company that asks for a large fee in advance, guarantees that they’ll stop a foreclosure or modify a loan, or tells you to stop paying your mortgage company and to pay them instead.”
Home Assure did most of these things, according to a decision by U.S. District Judge Steven D. Merryday. The company lured homeowners facing foreclosure by claiming, falsely, that it had special relationships with lenders, which it could use to help people keep their homes. The company also said it already had helped thousands of homeowners avoid foreclosure, another lie, the FTC found.
The company charged an up-front fee of $1,500 to $2,500, and offered a money-back guarantee if customers were not satisfied.
“If we are unable to negotiate a plan with your lender that improves your situation or gives you a viable strategy to avoid foreclosure, we will refund 100% of your money. . . No questions asked!” Home Assure advertised on its website, according to an FTC press release.
Instead, Home Assure did little to actually help prevent foreclosure, pocketed the up-front fee and refused to give it back.
In addition to mailing checks to defrauded homeowners, the FTC permanently banned Home Assure from selling mortgage modification or foreclosure relief services.
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Image: Michael Rosenquest, via Flickr.com