On February 25, the Federal Trade Commission (FTC) announced that on February 16, the U.S. District Court for the Southern District of California entered a temporary restraining order against a debt relief provider that allegedly deceptively marketed home loan modification services and student loan modification services. The Complaint alleged that for several months in 2014, the debt relief provider marketed mortgage assistance relief services to financially distressed homeowners. This marketing allegedly included representations that the debt relief provider would lower the consumer’s monthly interest rate or restructure their loan, causing the consumer to save a specific dollar amount. The Complaint further alleged that materials provided to consumers failed to include the loan modification disclosures required by Regulation O. 12 C.F.R. § 1015.2(j). Finally, the Complaint alleged that the debt relief services providers charged up-front fees for debt relief services, including student loan debt relief, in violation of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(a)(5)(i). Each of these practices allegedly constituted an unfair or deceptive act or practice in violation of Section 5(a) of the Federal Trade Commission Act. The Complaint seeks permanent injunctive relief, rescission, restitution, and disgorgement.
