FTC Settlement: Phony Law Firm Pocketed $28.6 Million in Mortgage Relief Scam
A Utah-based company and its owner have settled a Federal Trade Commission (FTC) complaint that it charged consumers for worthless mortgage relief services.
Philip Danielson and his company Danielson Law Group claimed to be legal experts and charged clients between $500 and $3,900 for loan modifications that would decrease their mortgage payments, but then did little or nothing to help. The company scammed $28.6 million from clients.
According to the complaint, the company targeted distressed homeowners and touted a 90 percent success rate based on their legal expertise and a pre-qualification process that identified clients that they knew they could help. The company implied that it was a law firm, but clients never met or spoke with any attorneys.
Federal law prohibits mortgage foreclosure rescue and loan modification service providers from collecting fees until homeowners have an acceptable written offer from their lender or service provider.
Under the settlement, Danielson and his company are banned from the mortgage and debt relief business and are prohibited from misrepresenting future products or services. The settlement imposes a $28.6 million judgment, which will be suspended after they turn over certain assets.
For consumer information about avoiding mortgage and foreclosure rescue scams, visit the FTC website.