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FTC targets mortgage and debt relief websites

The Texas operation falsely suggested it was affiliated with U.S. government agencies, the FTC says

The U.S. Federal Trade Commission has asked a court to shut down websites that falsely suggested they were federal consumer assistance agencies or affiliated with government agencies focused on mortgage or debt relief, the agency said Thursday.

Websites operated by Christopher Mallett of San Antonio, Texas, allegedly mislead consumers about their connection to the U.S. government, the FTC said in a press release. Mallett, doing business as the Department of Consumer Services Protection Commission, U.S. Debt Care and World Law Debt, operated gov-usdebtreform.net, worldlawdebt.org, usdebtcare.net, and FHA-homeloaninfo, the FTC said.

The websites had no government connection, but instead referred customers with financial problems to companies selling mortgage, tax and debt relief services, with promises that consumers' debts would be substantially reduced or eliminated, according to the FTC complaint, filed Sept. 14 in U.S. District Court for the District of Columbia.

The FTC asked the court to permanently shut down Mallett's operation.

Mallett did not return a phone call to a telephone number affiliated with one of his websites.

The FTC charged Mallett with multiple violations of the FTC Act for allegedly misrepresenting his affiliations with federal agencies, misrepresenting that the services advertised on his websites were government-approved, and making deceptive debt relief claims. Mallett's businesses also violated FTC rules governing telemarketing and mortgage relief, the agency said.

Mallett, a lead generator for other businesses, impersonated the FTC and other agencies, the FTC said. His Department of Consumer Services Protection Commission appears to combine two real government agencies, the FTC and the Consumer Financial Protection Bureau, the agency said. His websites used the FTC's official seal and copied language about the fictitious agency's consumer protection mission almost verbatim from the FTC's site, the agency alleged in its complaint.

Mallett used the name of another fictitious government agency that he called the U.S. Mortgage Relief Counsel on his website, FHA-HomeLoan.info, the FTC said. This website included a picture of the U.S. Capitol building and promised that the counsel would direct consumers to mortgage licensing officials.

On one website, Mallett said customers could get their debts settled for 16 to 40 percent of the amount owed, but the claims were false or unsubstantiated, the FTC said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.


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