Markets Wired

Austin, Texas-based Home Relief Foundation, Inc. and its two owners have settled Federal Trade Commission charges that they illegally charged up-front fees for services they falsely promised would reduce consumers’ mortgage interest rates or monthly payments. The settlement order prohibits the defendants from selling debt relief products or services and from misrepresenting any material facts related to the sale of any products or services.

“The economic meltdown may be over, but scammers are still taking advantage of people struggling to pay their mortgages,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection.  “As long as phony mortgage relief operations keep breaking the law and ripping off distressed homeowners, we’ll go after them and shut them down.”

According to the FTC’s complaint, filed in mid-2014 as part of a six-case sweep targeting phony mortgage relief programs, the operation preyed on financially distressed homeowners by making promises that because of the defendants’ affiliation with attorneys, connection to a government program, knowledge of the industry, and relationships with mortgage lenders, they would be able to lower consumers’ interest rates and monthly mortgage payments.

The complaint alleges the defendants often told consumers that they could afford the defendants’ fees by stopping payment of their mortgages – without disclosing that if they did so, consumers would risk losing their homes or damage their credit ratings. The defendants illegally charged upfront fees ranging from $500 to $4,000, with the typical charge being about $2,550.

The stipulated court order settling the FTC’s charges bans defendants from advertising, marketing, promoting or selling any secured or unsecured debt relief product or service; prohibits them from misrepresenting information to consumers regarding any financial products or services, and broadly prohibits misrepresentations related to any products or services.

Finally, the order imposes a judgment of $1,270,439 that represents the total amount of consumer injury during the three-year operation. The judgment will be partially suspended, due to the defendants’ inability to pay, after they have paid the FTC approximately $68,000.

The Commission vote approving the proposed stipulated final order against Home Relief Foundation, Inc., John DiCristofalo and Josephine Amanda DiCristofalo was 5-0. The proposed stipulated final order was entered by the U.S. District Court for the Western District of Texas, Austin Division.

NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics. Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.