In response to the mortgage crisis, the Obama administration introduced the Making Home Affordable program, which provides free mortgage counseling to consumers who are worried about losing their homes. In late March, the administration launched the program’s web site, makinghomeaffordable.gov.
It didn’t take long before alleged internet scammers attempted to prey on struggling homeowners seeking the government’s help. According to the Federal Trade Commission ("FTC"), consumers searching for the Making Home Affordable web site were diverted under false pretenses to other sites where they were asked to enter personal and financial information and to purchase mortgage counseling services from private companies for a fee.
On May 14, the FTC filed a complaint against the unknown defendants in federal court in Washington, D.C. The next day, U.S. District Judge Colleen Kollar-Kotelly issued a temporary restraining order that effectively outlaws the alleged scam.
Here’s how it worked, according to the FTC’s complaint: the defendants purchased preferred advertisements on Internet search engine sites, including yahoo.com and msn.com. When consumers entered a search for “making home affordable” or similar phrases, the defendants’ ads would appear at the top of the page, shaded in blue for emphasis. The FTC alleges that the ads made it appear that the advertisements contained links to the official government program, and even used the phrase “MakingHomeAffordable.gov.” But consumers who clicked on the links allegedly were redirected to various web sites that marketed home loan modification or foreclosure relief services for a fee. The FTC alleged that the defendants falsely represented to the public that they were affiliated with the U.S. government and operated the government’s makinghomeaffordable.gov web site.
Judge Kollar-Kotelly found good cause to believe that the defendants were violating the FTC Act, which prohibits deceptive acts or practices in commerce. She also found good cause to believe that consumers would suffer immediate and continuing harm unless the alleged scam was halted. Her restraining order prohibits the defendants from pretending to represent the government, and from posting internet ads that contain any hyperlink with a “.gov” domain name, including makinghomeaffordable.gov.
One more thing: the court ordered Yahoo and the other search engine operators to identify whoever placed the ads. For now, the case caption reads: Federal Trade Commission v. One or More Unknown Parties Misrepresenting Their Affiliation With The Making Home Affordable Program.
If you were deceptively redirected to various web sites that market home loan modification or foreclosure relief services and charged a fee, please contact us to discuss your legal options.