Attorney General's Offices in Ohio and Massachusetts Crack Down on Foreclosure Rescue Scams
Six companies who allegedly scammed families who were dealing with the crisis of foreclosure on their homes are being sued by the Ohio Attorney General's Office.
The companies allegedly ran their foreclosure rescue scams in Franklin, Delaware, Cuyohoga, Hamilton, Lucas and Mahoning counties in Ohio. Attorney General Marc Dunn has said that his office is suing the six companies for violations of five different acts. Dunn has cited 44 different counts of violations of the five acts. The companies can be fined up to $25,000 for each violation.
The companies are being sued by the Attorney General's Office in a joint lawsuit. The attorney general alleges that these companies saw homeowners who were in financial distress as their prey. The defendant companies allegedly contacted these families who were facing foreclosure on their homes and promised that they could stop the process - for a fee.
The fees that the companies allegedly charged the desperate and destitute homeowners ranged between $425 and $1,200. The homeowners somehow came up with the money to pay the fees because they were promised that the foreclosure actions against them would go away.
The lawsuit claims that the money scraped up by these distressed homeowners was pocketed and the foreclosures went forward. Each one of the six companies is charged with violating the Debt Adjusters Act because they claimed to be able to discharge a note when in reality they could not and certainly did not. The homeowners lost the money they paid to these companies, and then lost their homes.
Each of the companies is also charged with at least two counts of violating Ohio's Consumer Sales Practices Act. This Act requires companies to register with the state and provides sanctions when companies fail to deliver on their service promises.
Four of the six companies are facing three counts each for their alleged violation of the Telephone Solicitation Sales Act because they failed to register with the state and allegedly made false statements to consumers.
Since Ohio is one of the most foreclosed upon states in the nation, these companies allegedly saw an opportunity to scam people in dire need of help, and took it.
Michelle Gatchell, a spokeswoman for the Ohio Attorney General's Office said that the lawsuit is a result of over 70 complaints they have received about these companies, and with the announcement of this lawsuit that number is expected to rise.
The lawsuit seeks restitution in full to all of the customers who have filed complaints that they were allegedly scammed by these companies. The number of consumers to be compensated is still unknown because more complaints are likely and expected. The suit also seeks to ban the companies from doing business until the restitution is paid in full.
Recently, the Massachusetts Attorney General filed a similar lawsuit against a man who posed as a loan specialist who could help homeowners in crisis avoid foreclosure on their property. The man instead arranged transactions that allowed him to purchase the homes and sell them for a profit.
Walter Ribeck agreed to pay a $10,000 civil penalty to settle the lawsuit alleging he operated a foreclosure rescue scam. Ribeck will also be required to pay $100,000 in restitution to two homeowners he allegedly scammed.