Thousands of homeowners across the country who fell for a mortgage relief scam based in South Florida could get a share of a $3.6 million settlement that the Federal Trade Commission has announced.
The settlement resulted from lawsuits filed by the FTC in 2012, charging 11 companies and five individuals with running an illegal mortgage relief scheme. The scheme operated under various names, including: Prime Legal Plans and Reaching U Network.
What the companies did
The companies promised troubled homeowners they could save their homes from foreclosure and reduce their mortgage payments. But instead of helping consumers, they charged them illegal advance fees ranging from $595 to $750 per month and offered little to no help.
“Rather than make good on their promise to offer people relief from mortgage trouble, these schemers put their targets even further behind financially,” says Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “They broke the law by taking money upfront and making false promises.”
Don't do the math or you'll get mad
The $3.6 million is a fraction of the $25.1 million that the scheme collected in fees. That's the amount of the judgment obtained by the FTC, which froze the assets of the owners of the company and shut down the business in 2012.
The FTC doesn't have the exact number of consumers who will receive refunds, but a spokeswoman says it's safe to estimate that more than 6,000 people will get checks. If everyone gets a check, the refund would average about $600.
When and where
The FTC did not provide a timeline for when the checks will be mailed.
"It always takes time for the redress office to figure out how best to locate affected consumers and get them their money," says FTC spokeswoman Betsy Lordan. "But when information becomes available regarding consumer refunds, it can be found here."
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