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FCC warns telecoms to stop carrying “mortgage scam” robocalls
On January 24, the FCC’s Enforcement Bureau announced it had ordered telecommunications companies to effectively mitigate robocall traffic originating from a Florida-based real estate brokerage firm selling mortgage scams. The FCC also sent a cease-and-desist letter to a voice service provider carrying the allegedly illegal robocall traffic. According to the FCC, several state attorneys general filed lawsuits late last year against the firm for allegedly using “misleading robocalls to ‘swindle’ and ‘scam’ residents into mortgaging their homes in exchange for small cash payments.” (See state AG press releases here, here, and here.) Additionally, last month, Senate Banking Committee Chairman Sherrod Brown (D-OH), along with Senators Tina Smith (D-MN) and Ron Wyden (D-OR) sent a letter to the FTC and the CFPB requesting a review of the firm’s use of exclusive 40-year listing agreements marketed as a “loan alternative.” (Covered by InfoBytes here.) In shutting down the robocalls, FCC Chairwoman Jessica Rosenworcel stressed that sending junk calls to financially-stressed homeowners in order to offer “deceptive products and services is unconscionable.” Enforcement Bureau Chief Loyaan A. Egal added that the voice service provider should have been applying “Know Your Customer” principles before allowing the traffic on its networks.
Senators ask FTC, CFPB to investigate deceptive listing agreements
In December, Senate Banking Committee Chairman Sherrod Brown (D-OH), along with Senators Tina Smith (D-MN) and Ron Wyden (D-OR) sent a letter to the FTC and the CFPB requesting a review of a Florida-based real estate brokerage firm’s use of exclusive 40-year listing agreements marketed as a “loan alternative.” The request follows a November press release by the Florida attorney general announcing legal action against the firm for engaging in allegedly deceptive, unfair, and unconscionable business practices. According to the AG’s complaint, the firm offered homeowners $300 to $5,000 as a cash loan alternative in exchange for an agreement to use the firm as an exclusive real estate listing broker for a 40-year period. The complaint claimed the firm informs homeowners that there is no obligation to return the cash, stressing the homeowner will owe the firm nothing unless and until the home is sold. The AG asserted, however, that what is not clearly disclosed is that after accepting the payment, the firm files a 40-year lien on the property so that if at any time within 40 years the home is foreclosed upon or transferred to heirs upon the homeowner’s death, or if homeowners simply wish to cancel the deal, the firm will attempt to take three percent of the home’s value. Further, the AG claimed that the firm also failed to inform customers that the liens are filed in the public record, which can make it difficult for homeowners to refinance or access their home’s equity. The complaint seeks injunctive relief, restitution, and civil penalties.