Consumers who were deceived by an operation where scammers posed as a government mortgage assistance program and charged an upfront fee for fraudulent mortgage relief services will soon be receiving reimbursement from this scheme.
The Federal Trade Commission mailed 17,213 refund checks this week to the affected consumers.
Overall, approximately $1 million is being returned to individuals who became victims to this scam. Each of the distressed borrowers will obtain a $62.50 refund from the FTC.
The FTC told consumers to cash their refund checks within 60 days of the mailing date.
Under a settlement entered by the court as part of the FTC’s crackdown on schemes that target homeowners behind in their mortgage payments who are at risk of foreclosure, the Residential Relief Foundation defendants have been banned from selling debt relief services.
Furthermore, as National Consumer Protection Week comes to an end, the Department of Treasury has provided several tips reminding homeowners to beware of scams when seeking assistance with their mortgage concerns.
First, the government agency said it is important for homeowners to be cautious of anyone who asks for them to pay a fee in exchange for counseling services or the modification of a delinquent loan. This is an illegal action against federal regulations.
Another recommendation made by the Treasury to help prevent consumers from being victims to a fraudulent scheme in the future is to be wary of people who ask them to sign papers immediately. During this scam, fraudsters usually tell distressed borrowers that they can “save” their home if the deed is transferred over directly to them.
Treasury said a homeowner should never sign over the deed to their property to any organization or individual unless they are working in hand with their mortgage company to forgive your debt.
Lastly, the Department told consumers to never make a mortgage payment to anyone other than their mortgage company without the written approval from the servicer or lender.
“Mortgage assistance and foreclosure rescue scams are a serious risk to homeowners who are unsure of where to turn for help,” the Department of Treasury said in a press release. “Treasury works closely with government, nonprofit and private industry partners to identify and stop these scams, including those that impersonate government programs. Homeowners should know the warning signs so that they can protect themselves, their money and their homes.”