The Federal Trade Commission (FTC) is setting the mortgage broker and lending community, and the media outlets that run their advertisements, in its sights for making improper claims and deceiving consumers.
Following a nationwide review of ads appearing on Web sites, newspapers, magazines, direct mail, and unsolicited e-mail and faxes throughout the month of June, the FTC has issued over 200 warning letters to advertisers and media outlets that some of their ads are potentially deceptive or in violation of the Truth in Lending Act, according to the agency.
“What we found was, and it wasn’t any kind of representatively statistically valid sample, but we found that the problem of deceptive mortgage advertising is continuing. We wanted to do something about it,” said Lucy Morris, senior attorney in the FTC’s Bureau of consumer protection, regarding the letters.
In talking the issue over with Tsan Abrahamson, a partner with Cobalt Law Firm in Berkeley, Ca., which specializes in advertising, promotions and intellectual property, she told me it’s likely that the FTC will “make an example” of some advertisers by issuing the warning, and then leveling heavier fines than it might otherwise. She also told me that the White House is getting involved, so…
“They have the backing of an outgoing president. Who wants his administration to stand for protecting the people,” she said of the FTC. “The legislative branch has the backing of the administrative branch, and that’s impressive because it means the big stick of the FTC is going to be wielded.”
As the companies in question haven’t actually been charged, the FTC is declining to list their names.