The CFPB ordered RMK Financial Corporation to end its illegal mortgage advertising practices and pay a civil penalty of $250,000.
The bureau claimed that the California-based mortgage lender mailed misleading print advertisements to more than 100,000 consumers, which appeared to be from federal government entities.
RMK Financial Corporation allegedly used the names and logos of the Department of Veterans Affairs (VA) and the Federal Housing Administration (FHA), falsely implying they were endorsed or sent by the VA or FHA. The CFPB said the advertisements were also sent to tens of thousands of veterans and current U.S. military service members.
“Deceptive advertising has no place in the mortgage marketplace, and the Consumer Bureau will continue to take action against companies that mislead consumers with false claims of government affiliation,” CFPB Director Richard Cordray said. “Today's action sends a clear message that misleading consumers is illegal, unacceptable and will not be tolerated.”
The CFPB found that RMK's practices violated the Truth in Lending Act as well as the bureau's Mortgage Acts and Practices Advertising Rule, which specifically prohibits deceptive claims in mortgage advertising.
According to the CFPB, RMK claimed its loan products were part of a “distinctive program offered by the U.S. government” and instructed consumers to call the VA's Interest Rate Reduction Department at an RMK phone number. The CFPB also said some of the ads included warnings that referenced U.S. Code concerning fines and imprisonment for tampering with the letter.
“RMK's ads also contained misrepresentations about the loans' interest rates and estimated monthly payments, including whether the interest rate was fixed or variable,” a CFPB press release said. “Consumers who called the company were sometimes given misleading information over the phone; in some cases RMK employees told callers or implied that RMK was endorsed by the VA or FHA.”
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