Scheme Used Fictitious Federal Agencies and Misrepresentations about Debt Relief, FTC Alleges
The Federal Trade Commission has filed a complaint in U.S. District Court to halt the misleading claims of a defendant who allegedly deceived consumers by using multiple websites to impersonate federal consumer assistance agencies or pretend to be affiliated with them. Through the websites, the defendant solicited indebted consumers and referred them to companies selling mortgage, tax, and debt relief services with promises that their debts would be substantially reduced or eliminated, according to the FTC complaint.
As part of its continuing crackdown on scams that target consumers in financial distress, the FTC charged Christopher Mallett with multiple violations of the Federal Trade Commission Act for misrepresenting his affiliations with federal agencies, misrepresenting that the services advertised on his websites were government-approved, and making deceptive debt relief claims. The FTC further charged that his deceptive claims violated the FTC’s Telemarketing Sales Rule and Mortgage Assistance Relief Services Rule.
Mallett did business as Department of Consumer Services Protection Commission, U.S. Debt Care, World Law Debt, U.S. Mortgage Relief Counsel, gov-usdebtreform.net, worldlawdebt.org, usdebtcare.net, and FHA-homeloaninfo.
The FTC alleged that Mallett, a San Antonio, Texas-based “lead generator,” impersonated the FTC or other government agencies on websites he created. For example, Mallett’s websites associated his business with a fictitious government agency – the “Department of Consumer Services Protection Commission” – that appears to combine two real government agencies, the Federal Trade Commission and the Consumer Financial Protection Bureau. To further this false message, the websites depicted the FTC’s official seal, copied language about the fictitious agency’s supposed consumer protection mission almost verbatim from the FTC’s site, and claimed that the fictitious agency “monitors and researches” member companies that provide financial assistance to American consumers, the complaint alleges.
According to the FTC, Mallett also deceived consumers by using the name of another fictitious government agency that he called the “U.S. Mortgage Relief Counsel” on his website, FHA-HomeLoan.info. This website also included a picture of the U.S. Capitol building and promised that the “Counsel” would direct consumers to “officials licensed with the National Mortgage Licensing Service (NMLS), persuant [sic] to the SAFE act of 2008.” According to the FTC, neither Mallett nor any of his websites have ever been affiliated with the FTC or any other government agencies.
Mallett also allegedly claimed that consumers who responded to his website solicitations could have their debts substantially reduced, in some cases citing specific percentages. In one instance, the website depicted a “success stats chart” for his business that purported to show that his customers’ debts were settled for 16 percent to 40 percent of the amount owed. These claims were false or unsubstantiated, the FTC charged.
For consumer information about debt, mortgage, and tax relief assistance, see Money Matters: Debt Relief Services, Mortgage Assistance Relief Scams: Another Potential Stress for Homeowners in Distress, and Tax Relief Companies – More Pain Than Gain?
The Commission vote authorizing the staff to file the complaint was 4-1, with Commissioner J. Thomas Rosch voting no. The FTC filed the complaint in the U.S. District Court for the District of Columbia on September 14, 2011 and a request for a preliminary injunction on September 19, 2011.
The Commission thanks the Texas and Tennessee Offices of Attorneys General for their assistance.
NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.
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 and follow us on Twitter.
(FTC File No. 1123105)
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