A U.S. District Court today granted the CFPB and the State of Florida a final judgement against Hoffman Law Group and affiliated companies for what the agency said was using deceptive marketing practices and scamming consumers.
According to agency, the North Palm Beach, Fla. companies tricked consumers into paying illegal advance fees and joining frivolous lawsuits that the companies said would pressure banks to modify underwater home loans or provide foreclosure relief.
The U.S. District Court for Florida's Southern District found the corporation and its affiliates liable for more than $11.7 million in fees illegally charged to consumers and further ordered the companies to pay $10 million to the CFPB and additional fines to the State of Florida.
“These companies preyed on vulnerable consumers who were trying to save their homes from foreclosure,” CFPB Director Richard Cordray said. “The false promises made by these companies lured struggling homeowners into scams that led to greater financial hardship. We are working to protect consumers from illegal predatory practices by holding bad actors accountable for their actions.”
Florida Attorney General Pam Bondi added, “Scamming homeowners worried about losing their homes is not only illegal, it is despicable, and thanks to the great work of my consumer protection division and the CFPB, these defendants will pay for preying on Florida homeowners facing foreclosure. Foreclosure rescue scammers cannot evade the law by hiding behind a law firm. It is discouraging that there are attorneys out there that will allow their licenses to be used by shady companies to target people facing foreclosure.”
According to court documents in the case, the firms collected fees from consumers before actually obtaining a modification of their loans; misrepresented the homeowners likelihood of success in obtaining a modification; duped consumers into thinking they would receive legal representation and actually discouraged homeowners from communicating with their lenders or servicers, claiming the companies would handle all such communication.
Under the court order, more than $655,000 will go to the CFPB to repay victims of the scams, and the court suspended the balance as uncollectable and ordered personal effects from executives who ran the companies to be auctioned to help repay victims.
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