Mortgage Investors Corp., one of the nation’s largest refinancers of veterans’ home loans, will pay a $7.5 million civil penalty, the largest fine the FTC has ever collected for allegedly violating Do Not Call provisions of the agency’s Telemarketing Sales Rule (TSR).

The case also represents the first action brought by the FTC to enforce the Mortgage Acts and Practices - Advertising Rule (MAP Rule), which allows the FTC to collect civil penalties for deceptive mortgage ads.

According to the FTC's complaint, Mortgage Investors Corp. called consumers on the Federal Trade Commission’s National Do Not Call Registry, failed to remove consumers from its company call list upon demand, and misstated the terms of available loan products during telemarketing calls.

The settlement, announced on the 10-year anniversary of the Registry, marks the 105th enforcement action since staff began enforcing the Do Not Call provisions of the TSR in 2004. Consumers can opt-out of receiving telemarketing calls by registering their telephone numbers at  

The FTC also announced the first settlements resulting from its 2012 joint law enforcement sweep against companies that made millions of illegal pre-recorded calls from "Cardholder Services," designed to entice consumers to make up-front payments to lower their credit card interest rates.

“Since the advent of Do Not Call, the FTC has been aggressive in cracking down on violators and preventing annoying, illegal calls to consumers,” said FTC Chairwoman Edith Ramirez. “Today’s settlements leave no doubt that DNC enforcement remains a top priority. We’ve also encouraged industry to create a technical solution to unwanted calls through our Robocall Challenge.” 

“We created the National Do Not Call List to put consumers in charge and reduce unwanted and intrusive calls from telemarketers,” said Timothy J. Muris, the former FTC Chairman who spearheaded the initiative. “Ten years later, with 221 million American consumers registered, it is one of the agency’s most recognized consumer protection achievements.”

Mortgage Investors Corporation

According to the complaint, Mortgage Investors’ telemarketers called more than 5.4 million numbers listed on the National Do Not Call Registry to offer home loan refinancing services to current and former U.S. military consumers in violation of the TSR Rule. The telemarketers also allegedly led servicemembers to believe that low interest, fixed rate mortgages were available at no cost, often quoting rates that they implied would last the duration of their loan. In reality, Mortgage Investors only offered adjustable rate mortgages in which consumers’ payments would increase with rising interest rates and would require consumers to pay closing costs. In addition, Mortgage Investors allegedly misled consumers about their affiliation with the Department of Veterans Affairs (VA). The FTC charged Mortgage Investors with false and misleading acts or practices in violation of Section 5 of the FTC Act and the MAP Rule.

Under the settlement, the defendant is barred from denying consumers’ future requests to be placed on entity specific Do Not Call lists; calling consumers on the National Do Not Call Registry; misrepresenting any terms related to mortgage credit products including rates, closing costs, fees, interest, and savings; and misrepresenting its affiliation with any government entity or organization including the VA.

The Commission vote to authorize staff to refer the complaint to the Department of Justice, and to approve the proposed consent decree, was 4-0. The DOJ filed the complaint and proposed consent decree on behalf of the Commission in the U.S. District Court for the Middle District of Florida on June 25, 2013. The proposed consent decree is subject to court approval. Consentdecrees have the force of law when approved and signed by the District Court judge.

Robocall Sweep Actions

In the five complaints announced in November 2012, the FTC charged each of the companies and their principals with violating the law by misleading consumers about their services; calling phone numbers on the Do Not Call Registry; collecting up-front fees for financial services; and making illegal robocalls.

Recent updates to these law enforcement actions are described below.

The Green Savers LLC: All but one defendant have agreed to a stipulated final order which permanently bans them from making robocalls and from telemarketing; permanently bans them from marketing debt relief products or services; prohibits them from making a range of misrepresentations related to financial services and credit; and prohibits a variety of practices related to the sale of any product or service. It also requires the settling defendants to cooperate in the case against the remaining defendant and in any subsequent, related investigations. Finally, the order imposes a suspended judgment of $3,879,114 and requires defendant Vikash Jawalapersad to turn over all remaining funds in his bank account and the proceeds from the sale of his vehicle.

Key One Solutions: According to the FTC, the four settling defendants in this case opened merchant and bank accounts in their names for processing consumer payments obtained in connection with the sales of goods provided by the remaining defendants. In settling the FTC’s charges, the four defendants agreed to cooperate in the case against the remaining six defendants, and are barred from making misrepresentations about their affiliation with any other person; the goods and services they offer for sale; and the endorsements or substantiation for any products they intend to sell. Finally, the order imposes a $152,412 judgment against defendant Rares Stelea and a $47,440 judgment against defendant Justin Journay; both judgments are suspended based on the defendants’ inability to pay.

Ambrosia Web Design: In addition to the original charges against the defendants, the agency amended its complaint to add charges of credit card laundering in violation of the TSR. According to the complaint, in many cases, the defendants engaged in credit card laundering by processing credit card payments for other telemarketers through the defendants’ own merchant accounts; and arranging for other merchants to process credit card payments for the defendants through those merchants’ accounts.

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