Virtual Trademarks -
The Secret World of Keyword Ads by Jonathan Moskin!

Key Developments in NAD and CARU False Advertising Cases -
by Jeffrey S. Edelstein!

Made in the U.S.A., Except in California -
by Randal Shaheen, Amy Ralph Mudge & George Langendorf!

 

Latest Lanham Act Case to Bring Down a National Ad Campaign -
by Randall K. Miller!

 

 

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BULLETIN #664

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SAMPLE ISSUE: Article #5:

COURT HALTS ALLEGEDLY BOGUS MORTGAGE LOAN MODIFICATION OPERATIONS

 

 

GOVERNMENT-ENDORSED MORTGAGE ASSISTANCE NETWORK

 

At FTC's request, a federal district court ordered two companies to stop falsely advertising that they're part of a government-endorsed mortgage assistance network and that they successfully modify mortgages for almost all of their clients or else give refunds. In fact, FTC alleged that defendants–

 

• are not affiliated with the legitimate HOPE NOW Alliance mortgage assistance network,
• often divert one month's mortgage payment as a fee from distressed homeowners,
• fail to help them modify their mortgages, and then deny them refunds.

 

"With many consumers desperate for relief and afraid they might lose their homes in these difficult economic times, some unscrupulous individuals prey on these fears for their own financial gain." So said new FTC Chairman Jon Leibowitz. "The New Hope and Hope Now scammers have given consumers false hope under the guise of the government-endorsed HOPE NOW Alliance. We won't hesitate to take action against these types of con artists now and in the future."

 

DEFENDANTS ADVERTISED, MARKETED AND SOLD MORTGAGE LOAN MODIFICATION SERVICES: FTC

 

According to FTC, defendants advertised, marketed, and sold mortgage loan modification services to consumers nationwide using websites including www.newhopemodifications.com and www.hopenowmod.com. FTC charged defendants with violating federal law by misrepresenting that they could obtain mortgage loan modifications for consumers in all or virtually all cases and that they would refund consumers' money if they did not.

 

In addition, FTC charged defendants with making false claims that they are affiliated with, or part of, the HOPE NOW Alliance. The HOPE NOW Alliance is a non-profit organization that's a broad-based coalition of credit and home ownership counselors, lenders, investors, mortgage market participants, and trade associations. The HOPE NOW Alliance offers free assistance to homeowners who may not be able to pay their mortgages and need help working with their mortgage company or loan services. FTC said that defendants sought to capitalize on the HOPE NOW Alliance's name by calling their firms New Hope Modifications and Hope Now Modifications, and used telephone numbers that included "HOPE," to mimic the real HOPE NOW Alliance hotline which is 888-995-HOPE.

 

WEBSITES' STATEMENTS DESIGNED TO INDUCE CONSUMERS TO BUY THEIR SERVICES: FTC

 

Both defendants' websites contain statements designed to induce consumers to buy their services, said FTC. For example, the New Hope defendants' sites represent that "Loss Mitigation" is "The Fast and Easy Way To save your home," and that,

 

"Our experience with the loss mitigation departments of major mortgage companies and servicers gives you the advantage needed to secure a plan you can live with."

 

The Hope Now defendants' website claimed that Hope Now "can help you save your credit and your home, often within 60 to 90 days." Other claims include, "We STOP FORECLOSURE In Its Tracks!**"

 

According to FTC, when consumers called the New Hope or Hope Now toll-free numbers, defendants' telemarketers promised them that they can help modify their mortgage loans and prevent foreclosure. Consumers were then told that they first must pay an up-front fee, referred to as a "mitigation escrow fee" before defendants would begin working with them.

 

FTC's VOTE

 

FTC's vote approving each complaint was 4-0. Both complaints were filed on March 17, 2009, 2010 in the U.S. District Court for the District of New Jersey. The court entered the temporary restraining orders and related asset freezes on March 19, 2009, 2010.

 

NOTE: The Commission authorizes the filing of complaints when it has `reason to believe' that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaints are not a finding or ruling that the defendants actually have violated the law.

 

LAWYER's REFERENCE SERVICE

 

FTC v. New Hope Property LLC, also dba New Hope Modifications LLC, Brian Mammoccio, and Donna Fisher, United States District Court for the District of New Jersey, FTC File No. 092 3068, Case No. 1:09-cv-01203-JBS-JS (D.N.J.), March 24, 2009, 2010.

 

FTC v. Hope Now Modifications, LLC, Hope Now Financial Services Corp., also dba Hope Now Modifications, Nick Puglia, and Salvatore Puglia, United States District Court for the District of New Jersey, FTC File No. 092 3079, Case No. 1:09-cv-01204-JBS-JS (D.N.J.), March 24, 2009, 2010.

 

# # #

 

Volume XXIX
Issue 8
April 20, 2009, 2010
Pages 23-24

 

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Advertising Compliance Service is a REFERENCE COMPENDIUM of JLCom Publishing Co., L.L.C.

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NOTICE: This publication is not intended to provide legal advice. Persons who need legal services should contact a duly licensed professional.

 

© Copyright 2009-2012 JLCom Publishing Co., L.L.C. All rights reserved.

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