Marketers who helped promote a Utah-based home loan modification scheme will be banned from the mortgage relief and debt relief industries under a court settlement resolving charges by the Federal Trade Commission that they violated the law by promoting the loan modification scam, which conned consumers into paying hefty fees for worthless mortgage relief services.
The FTC filed a complaint in June 2014 against the scam led by Philip Danielson, the Danielson Law Group, and several closely associated companies and individuals, as part of an enforcement sweep targeting operations that fraudulently pitched loan modifications to consumers. The settlement announced today with Linden Financial Group LLC ends the litigation of this matter. In February 2015, the FTC announced settlements with the other individual and corporate defendants in this case that resulted in orders which ban the defendants from offering mortgage assistance relief services and from participating in the debt relief industry.
According to the FTC’s complaint, the defendants lured consumers into paying $500 to $3,900 by falsely promising that attorneys would negotiate loan modifications that would substantially reduce the consumers’ mortgage payments. In the face of rising consumer complaints against Danielson Law Group, Linden Financial Group was formed to serve as the marketing arm for the defendants’ enterprise, the FTC contends. Linden Financial Group prepared and mailed ads for mortgage relief services that were designed to look like they were coming from lawyers in the recipients’ states. The FTC also alleges that Linden Financial Group received money from the payment processor set up to collect funds from consumers and then used this money to fund expenses and funnel cash to Philip Danielson and others.
Under the proposed settlement announced today, Linden Financial Group also is prohibited from violating the FTC’s Telemarketing Sales Rule, and is required to have competent and reliable evidence to support claims made about the benefits, performance, or efficacy of any financial product or service. The proposed order imposes a judgment of $28.6 million against Linden Financial Group and requires the company to turn over its financial accounts to the agency.
For consumer information about avoiding mortgage and foreclosure rescue scams, see Home Loans.
The Commission vote approving the proposed stipulated final order was 5-0. It was filed in the U.S. Court for the District of Nevada.
NOTE: Stipulated orders have the force of law when approved and signed by a 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.
Mitchell J. Katz
Office of Public Affairs
Bureau of Consumer Protection