The Federal Trade Commission is mailing more than $467,000 to 2,653 consumers who lost money to a scheme that charged large upfront fees for mortgage relief services that were not provided.

The FTC in 2012 won a court action against Jackson, Crowder & Associates and Crowder Law Group, in which the FTC alleged the defendants falsely promised to modify consumers’ mortgages and reduce their monthly payments, exaggerated the role an attorney would play and pretended to be affiliated with a government agency. The FTC first filed a complaint against the defendants in a 2009 law enforcement sweep.  

All nine defendants in the case were charged with violating the Federal Trade Commission Act and the Telemarketing Sales Rule. 

The operation involved a marketing company that contracted with a direct-mailing company to send oversized postcards to homeowners nationwide whose mortgage payments were at least two months in arrears. Each postcard offered financial relief to the homeowner and displayed a toll-free phone number and the signature of an attorney who was local to the homeowner and was paid $100 to accept the homeowner into the program.   

When homeowners called the toll-free number, a customer service representative collected financial documents and the $2,000 fee from the consumer.

The court found that the defendants, through the post cards and telephone procedures, assured homeowners that they had qualified for loan modifications. In fact, homeowners still had to go through the modification process with lenders, and it which was usually unsuccessful.

Consumers who receive the checks from the FTC’s refund administrator, Gilardi & Co. LLC, should deposit or cash them within 60 days of the mailing date. The amount of the check will vary based upon each consumer’s loss.

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