On February 2, 2024, the U.S. District Court for the Central District of California issued an order permanently banning several companies and their owners from the telemarketing and debt relief businesses and requiring them to pay approximately $19 million in restitution and civil money penalties. This order came as a result of a joint suit filed by the Federal Trade Commission (FTC) and the California Department of Financial Protection and Innovation (DFPI).
The complaint alleged that Defendants advertised to consumers that they will negotiate with consumers’ mortgage companies to “make mortgage payments more affordable by lowering their interest rates and/or principal amounts,” but failed to provide any of the advertised services. The complaint further alleged that Defendants falsely represented that they were affiliated with a government assistance relief plan, that consumers who purchased their services were not required to continue to make mortgage payments and were protected from foreclosure, and that consumers were entitled to a money back guarantee. These deceptive promises allegedly amounted to violations of several laws and regulations, including the FTC Act, the Mortgage Assistance Relief Services Rule, the Telemarketing Sale Rule, the COVID-19 Consumer Protection Act, and the California Consumer Financial Protection Law.
After Defendants failed to respond to the complaint, the court entered default judgment against Defendants. Under this judgment, Defendants are required to pay $15,942,436.97 in restitution and a $3,095,000 civil money penalty. Defendants are also enjoined from engaging in debt relief services or telemarketing.