FTC Cracks Down on Texan Violating the Mortgage Assistance Relief Services Rule

The Federal Trade Commission (FTC) has filed a complaint in U.S. District Court for the District of Columbia to halt the misleading claims of a defendant, Christopher Mallett of San Antonio, Texas, who allegedly deceived consumers by using multiple Web sites to impersonate federal consumer assistance agencies or pretend to be affiliated with them. Through the sites, the defendant solicited indebted consumers and referred them to companies selling mortgage, tax, and debt relief services with promises that their debts would be substantially reduced or eliminated, according to the FTC complaint. As part of its continuing crackdown on scams that target consumers in financial distress, the FTC charged Christopher Mallett with multiple violations of the Federal Trade Commission Act for misrepresenting his affiliations with federal agencies, misrepresenting that the services advertised on his websites were government-approved, and making deceptive debt relief claims. The FTC further charged that his deceptive claims violated the FTC’s Telemarketing Sales Rule and Mortgage Assistance Relief Services Rule. Mallett did business as Department of Consumer Services Protection Commission, U.S. Debt Care, World Law Debt, U.S. Mortgage Relief Counsel, gov-usdebtreform.net, worldlawdebt.org, usdebtcare.net, and FHA-homeloaninfo. The FTC alleges that Mallett, a “lead generator,” impersonated the FTC or other government agencies on sites he created. For example, Mallett’s Web sites associated his business with a fictitious government agency—the “Department of Consumer Services Protection Commission"—that appears to combine two real government agencies, the FTC and the Consumer Financial Protection Bureau (CFPB). Further, the sites depicted the FTC’s official seal, copied language about the fictitious agency’s supposed consumer protection mission almost verbatim from the FTC’s site, and claimed that the fictitious agency “monitors and researches” member companies that provide financial assistance to American consumers, the complaint alleges. According to the FTC, Mallett also deceived consumers by using the name of another fictitious government agency that he called the “U.S. Mortgage Relief Counsel” on his site, FHA-HomeLoan.info. This site also included a picture of the U.S. Capitol building and promised that the “Counsel” would direct consumers to “officials licensed with the National Mortgage Licensing Service (NMLS), persuant [sic] to the SAFE Act of 2008.” According to the FTC, neither Mallett nor any of his websites have ever been affiliated with the FTC or any other government agencies. Mallett also allegedly claimed that consumers who responded to his site solicitations could have their debts substantially reduced, in some cases, citing specific percentages. In one instance, the site depicted a “success stats chart” for his business that purported to show that his customers’ debts were settled for 16 percent to 40 percent of the amount owed. These claims were false or unsubstantiated, the FTC charged.