The Federal Trade Commission (FTC) has charged a Colorado-based mortgage lead generator with allegedly deceiving consumers with ads that falsely claimed they could refinance their mortgages for free, according to recently filed court documents.
Intermundo Media, LLC, using the name Delta Prime Refinance, allegedly designed and distributed deceptive refinancing ads as part of its lead generation service. The company is expected to pay a $500,000 civil penalty to settle the FTC’s charges.
According to the complaint, the company ran these ads on Google, Microsoft, AOL and Yahoo, as well as on its own websites. Some ads allegedly claimed there were no hidden fees, and that the mortgage refinancing was free, even when these statements were not true. Other ads claimed that fixed interest rates were available, when the rates and the amount consumers spent on interest were variable.
After clicking on the ads, consumers were sent to a landing page where they provided contact information, which was ultimately passed on to providers of mortgage refinancing, the FTC says.
The complaint charges Delta Prime Refinance with violating the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, or “MAP” Rule and Regulation N, and the Truth in Lending Act and Regulation Z.
Under the terms of the settlement, in addition to paying the $500,000 civil penalty, Intermundo Media is prohibited from misrepresenting the terms and conditions of any financial product or service and any term or condition of a mortgage credit product; and disclosing, selling or transferring the consumer data obtained through the Delta Prime Refinance lead generation service.
Deceptive marketing and advertising has been a hot topic of late as some federal agencies have warned against these practices.
Most recently, the Consumer Financial Protection Bureau (CFPB) issued a warning to credit card companies about clearly disclosing the costs and risks of certain promotional offers so that consumers may better understand what they are signing up for.
Additionally, the Federal Housing Administration (FHA) recently issued an official notice reminding lenders of reverse mortgage marketing prohibitions against misleading or deceptive advertising.
Written by Emily Study