Promoting F'closure Relief Rackets With Authoritative-Sounding Names Implying Government, Non-Profit Link Provides Lucrative Career For Some Scammers

The Huffington Post reports:

• From the looks of the mortgage relief companies Christopher Mallett has marketed in recent years, offering lower payments and new loan terms to troubled homeowners, one might easily get the impression that he has the backing of the federal government or is running non-profit help groups.



• Mallett is the driving force behind usbankloanmodiication-gov.info and mortgagehelpgov.us. He also founded The Department of Consumer Services Protection, U.S. Debt Care, the U.S. Mortgage Relief Council and several other operations with similarly authoritative if not auspicious-sounding names.



• But people who turned to them for help didn’t receive services, according to court documents filed by the Federal Trade Commission in U.S. District Court this month. Their names were instead sold to companies that almost universally scam distressed homeowners, federal regulators say.



• Consumer advocates inside and outside the federal government say Mallett appears to be part of a rapidly growing network of customer lead generation, foreclosure rescue and debt settlement companies aggressively marketing their services to a crop of cash-strapped consumers that's grown out of the housing crisis.



• Many of these companies break the law by portraying themselves as agents or partners of the federal government and by guaranteeing relief that they fail to deliver, FTC officials said.



• In the last three years, The FTC has accused Mallett and nearly 40 other company owners of deceiving consumers about foreclosure prevention services. This year alone, attorneys general in Virginia, Idaho, Ohio, Michigan and North Carolina have brought cases against foreclosure rescue companies. In most cases, the companies collected up front fees for their services. That practice has been banned by the FTC since January. But new mortgage relief services are constantly evolving.(1)

For more, see Mortgage Relief Scams Proliferate After Recession.

For the Federal Trade Commission press release, see FTC Asks Court To Halt Defendant from Impersonating Federal Agencies While Steering Consumers to Mortgage, Tax, and Debt Relief Services (Scheme Used Fictitious Federal Agencies and Misrepresentations about Debt Relief, FTC Alleges).

For the lawsuit, see FTC v. Mallett.

(1) In connecton with criminal prosecutions (which this particular case is not), intentionally using such authoritative-sounding names in carrying out foreclosure rescue scams carried significant weight with a Federal appeals court when it recently affirmed a stiff sentence against a foreclosure rescue ripoff scammer, ruling that a lower court did not err in finding that the scammer used his falsely assumed position as a nonprofit foreclosure-relief coordinator to manipulate and intimidate his victims into believing that his purported solution to their financial problems was their only remaining option, and, in doing so, caused the victims to be more susceptible to signing the exorbitant mortgage contracts, thereby constituting an abuse of his falsely assumed position of trust with the victims. U.S. v. Porcelli, No. 10-14777 (11th Cir., September 21, 2011) (unpublished).