Michigan OFIS Commissioner Warns Mortgage Lenders - Stop False Advertising or Face Penalties

LANSING, Mich. – Businesses in Michigan that fall under the state’s Mortgage Brokers, Lenders, and Services Licensing Act, the Consumer Financial Services Act, and the Secondary Mortgage Loan Act have been put on notice by Office of Financial and Insurance Services Commissioner Linda Watters: stop any misleading or deceptive advertising or face penalties up to, and including criminal prosecution. In a Nov. 24th letter, Watters informed the concerned parties that she has learned that companies have distributed solicitations that use names of mortgage lenders in a way to make consumers believe the solicitation was sent to them by their lender. “Many consumers also believe, based on these solicitations, that their private financial information has been shared with another entity,” she wrote. “Lenders and brokers of every kind are responsible for their advertising and OFIS will not tolerate any advertisements, including direct mail solicitation and telemarketing calls that tend to, directly or indirectly, mislead or deceive consumers,” the Commissioner stated in her letter. She further warned that, “OFIS will aggressively pursue violators of these statutes and seek the harshest penalties allowed by law, up to, and including, administrative orders prohibiting any violator from being employed by, an agent of, or control person of a licensee or registrant under this act or a licensee or registrant under a financial licensing act and prosecution under a criminal act, as appropriate. “OFIS does not object to truthful advertisements that are neither deceptive nor misleading. Competition is an essential and encouraged element of Michigan’s mortgage loan business. However, deceptive or misleading advertising will not be tolerated,” Watters stated in her letter.