FEDERAL TRADE COMMISSION v. MALLETT

Filing 1

COMPLAINT against CHRISTOPHER MALLETT (Filing fee $ 0.00) filed by FEDERAL TRADE COMMISSION. (Attachments: # 1 Civil Cover Sheet)(rdj)

UNITED STATES DISTRICT COURT
DISTRICT OF COLUMBIA

FEDERAL TRADE COMMISSION,
600 Pennsylvania Ave NW, Room NJ3158
Washington, DC 20580,
Plaintiff,

Case No.

v.
CHRISTOPHER MALLETT, also d/b/a
Department of Consumer Services Protection
Commission, U.S. Debt Care, World Law
Debt, U.S. Mortgage Relief Counsel, govusdebtreform.net, usdebtcare.net,
Worldlawdebt.org, and fha-homeloan.info,
201 Cedar St.
San Antonio, TX 78210-1121,

COMPLAINT FOR PERMANENT
INJUNCTION AND OTHER
EQUITABLE RELIEF

Defendant.
Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges:
1.

The FTC brings this action under Sections 13(b) and 19 of the Federal Trade

Commission Act (“FTC Act”), 15 U.S.C. §§ 53(b) and 57b, the Telemarketing and Consumer
Fraud and Abuse Prevention Act (“Telemarketing Act”), 15 U.S.C. § 6101 et seq., and the 2009
Omnibus Appropriations Act, Public Law 111-8, Section 626, 123 Stat. 524, 678 (Mar. 11,
2009) (“Omnibus Act”), as clarified by the Credit Card Accountability Responsibility and
Disclosure Act of 2009, Public Law 111-24, Section 511, 123 Stat. 1734, 1763-64 (May 22,
2009) (“Credit Card Act”), to obtain temporary, preliminary, and permanent injunctive relief,
rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of illgotten monies, and other equitable relief for Defendant’s acts or practices in violation of Section
5(a) of the FTC Act, 15 U.S.C. § 45(a), the FTC’s Telemarketing Sales Rule (“TSR”), 16 C.F.R.
Part 310, and the Mortgage Assistance Relief Services Rule (“MARS Rule”), 16 C.F.R. Part 322,
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in connection with the marketing and sale of debt relief, tax relief, and mortgage assistance relief
services.
JURISDICTION AND VENUE
2.

This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a),

and 1345, and 15 U.S.C. §§ 45(a), 53(b), 57b, 6102(c), and 6105(b).
3.

Venue is proper in this District under 28 U.S.C. § 1391(b), and 15 U.S.C.

§ 53(b).
PLAINTIFF
4.

The FTC is an independent agency of the United States Government created by

statute. 15 U.S.C. § 41 et seq. The FTC enforces Section 5(a) of the FTC Act, 15 U.S.C.
§ 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The FTC
also enforces the Telemarketing Act, 15 U.S.C. § 6101 et seq. Pursuant to the Telemarketing
Act, the FTC promulgated and enforces the TSR, 16 C.F.R. Part 310, which prohibits deceptive
or abusive telemarketing acts or practices. Pursuant to the Omnibus Act, § 626, 123 Stat. 678, as
clarified by the Credit Card Act, § 511, 123 Stat. 1763-64, the FTC promulgated and enforces
the MARS Rule, 16 C.F.R. Part 322, which prohibits unfair or deceptive acts or practices on the
part of mortgage assistance relief providers.
5.

The FTC is authorized to initiate federal district court proceedings, by its own

attorneys, to enjoin violations of the FTC Act, the Omnibus Act, as clarified by the Credit Card
Act, the TSR, and the MARS Rule and to secure such equitable relief as may be appropriate in
each case, including rescission or reformation of contracts, restitution, the refund of monies paid,
and the disgorgement of ill-gotten monies. 15 U.S.C. §§ 53(b), 56(a)(2)(A), 56(a)(2)(B), 57b,
6102(c), and 6105(b); and § 626, 123 Stat. 678, as clarified by § 511, 123 Stat. 1763-64.

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DEFENDANT
6.

Defendant Christopher Mallett, also doing business as the Department of

Consumer Services Protection Commission, U.S. Debt Care, World Law Debt, U.S. Mortgage
Relief Counsel, gov-usdebtreform.net, usdebtcare.net, worldlawdebt.org, and fha-homeloan.info,
is the operator of websites that impersonate, represent, or suggest association with a federal
government agency, in connection with the sale or offering for sale of debt relief, tax relief, and
mortgage assistance relief services. At all times material to this Complaint, acting alone or in
concert with others, Defendant has formulated, directed, controlled, had the authority to control,
or participated in the acts and practices set forth in this Complaint. In connection with
maintaining the internet websites described herein, among others, which are available to
consumers throughout the United States, including the District of Columbia, Defendant transacts
or has transacted business in the District of Columbia and throughout the United States.
COMMERCE
7.

At all times material to this Complaint, Defendant has maintained a substantial

course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act,
15 U.S.C. § 44.
DEBT RELIEF AND TAX RELIEF SERVICES
8.

Debt relief services include debt settlement programs whereby a provider

typically offers to help consumers resolve their debts by negotiating settlements of their balances
for less than the consumer owes. These commercial debt settlement programs are not conducted
by, or in affiliation with, the Federal Trade Commission or any other United States government
agency.

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9.

Tax relief services typically consist of programs whereby a provider offers to

negotiate tax debts owed by consumers to the Internal Revenue Service or other tax authorities.
These commercial tax relief programs are not conducted by, or in affiliation with, the Federal
Trade Commission or any other United States government agency.
GOVERNMENT MORTGAGE ASSISTANCE
10.

Numerous mortgage lenders and servicers have offered certain borrowers the

opportunity to modify loans that have become unaffordable. Many of these “loan modification”
programs have expanded dramatically as lenders have increased participation in the federal
government’s “Making Home Affordable” program, a plan to stabilize the U.S. housing market
and help millions of Americans reduce their monthly mortgage payments to more affordable
levels. The Making Home Affordable program includes the Home Affordable Modification
Program, in which the federal government has committed up to $75 billion to keep significant
numbers of Americans in their homes by preventing avoidable foreclosures. The mortgage
assistance relief services advertised in Defendant’s websites are not connected with the Making
Home Affordable program or affiliated or otherwise associated with, or endorsed, sponsored, or
approved by, the United States government in any way.
DEFENDANT’S BUSINESS ACTIVITIES
11.

Defendant has solicited consumers who seek debt relief, tax relief, and mortgage

assistance relief services through a number of Internet websites. Since at least August 19, 2008,
Defendant has registered or operated numerous websites, including but not limited to the
following: gov-usdebtreform.net, usdebtcare.net, worldlawdebt.org, fha-homeloan.info, usstopforeclosurenow.com, usstopforeclosuretoday.com, usstopforeclosure.com, usbankloanmodification-gov.info, mortgagehelp-gov.us, loanmods-gov.info, loanmods-gov.us,

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mortgagehelp-gov.info, debtconsolidation-gov.info, debtrelief-gov.info, creditcard-assistancegov.info, and mycredithelp-gov.info. Since at least February 11, 2011, some of Defendant’s
websites have prominently displayed text, graphics, and other imagery associated with actual
United States government agencies and entities, such as the Federal Trade Commission seal or a
reference to the “Obama Foreclosure Program.” Defendant also has maintained websites
advertising companies that he has held out as “Member Organizations” of fictitious government
agencies, including the “Department of Consumer Services Protection Commission.”
12.

Defendant’s websites have provided online contact forms or, in some instances,

toll-free telephone numbers consumers may use to seek more information. When consumers
have submitted their information online to one of Defendant’s websites, they have been taken to
a “thank you” webpage that displays the following web address:
“http://www.123contactform.com/thank-you-cmallett71-139732.html.” (emphasis added).
When consumers have called the toll-free telephone numbers obtained from Defendant’s
websites they have reached a voicemail box for “Chris Mallett,” as indicated by the voicemail
message. After providing their contact information, consumers who have sought services from
one of the websites or organizations depicted on Defendant’s websites typically have been
subsequently contacted by third parties, including companies that sell debt relief services.
Defendant’s Representations of Government Affiliation or Association
13.

Defendant has solicited consumers interested in debt relief, tax relief, and

mortgage assistance relief services through websites that appear to be affiliated or associated
with the United States government.
14.

One website operated by Defendant, gov-usdebtreform.net, has displayed the

heading “Department of Consumer Services Protection Commission” and the following:

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The Consumer Services Protection Commission (CSPC) is a National consumer protection
agency and works For the Consumer to help avoid fraud, deception, and/or unfair business
practices in the financial assistance marketplace. The CSPC:
C

Enhances consumer confidence by enforcing CSPC listed organizations to abide
[sic] federal laws that protect consumers

C

Informs consumers with free information to help them exercise their rights and to
spot and avoid fraud and deception

C

Wants to hear from consumers who want to obtain information about financial
assistance organizations, such as: debt relief companies, mortgage industry
organizations, and tax resolution companies.

(emphasis in original).
15.

The language cited in Paragraph 14, which has appeared on the home webpage of

gov-usdebtreform.net, is very similar to the language that appears on the actual FTC Bureau of
Consumer Protection webpage:
The Federal Trade Commission is the nation's consumer protection agency. The FTC's
Bureau of Consumer Protection works For The Consumer to prevent fraud,
deception, and unfair business practices in the marketplace. The Bureau:
C

Enhances consumer confidence by enforcing federal laws that protect consumers

C

Empowers consumers with free information to help them exercise their rights and
spot and avoid fraud and deception

C

Wants to hear from consumers who want to get information or file a complaint
about fraud or identity theft

16.

The phrase “For the Consumer,” which gov-usdebtreform.net has displayed, is

also a tagline that the Federal Trade Commission website displays on many of its online
consumer education materials and press releases.
17.

At various times, gov-usdebtreform.net has displayed the phrase “Leaders in

Consumer Financial Services Protection” directly below the heading “Department of Consumer
Services Protection Commission.”

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18.

The gov-usdebtreform.net homepage has included a citation to the

Federal Trade Commission website, ftc.gov, as the source of the material provided on the
Defendant’s website.
19.

The gov-usdebtreform.net homepage also has prominently displayed the seal of

the Federal Trade Commission with the words “Department of Consumer Services Protection
Commission” below the seal.
20.

At various times, Defendant also has displayed the Federal Trade Commission

seal on another website, usdebtcare.net, directly above the words “Member of the Department of
Consumer Services Protection Commission,” the title “U.S. Debt Care,” and an address for U.S.
Debt Care.
21.

Defendant also has maintained a website, fha-homeloan.info, that displays the

heading “U.S. Mortgage Relief Counsel” above the words “Integral Authority for Home Loan
Approval.” This heading has been super-imposed on a large picture of the United States Capitol.
Beneath the heading with the picture of the United States Capitol, the fha-homeloan.info website
has stated:
The form below is reserved for American Citizens and Permanent
Resident Aliens in need of more favorable mortgage terms. Whether
you are purchasing a new home, looking to refinance your current
mortgage or trying to consolidate debt, U.S. Mortgage Relief Counsel
can assist you in finding the proper organizations to help accomplish
your financial goals. All requests are responded to by officials
licensed with the National Mortgage Licensing Service (NMLS),
persuant [sic] to the SAFE.act of 2008. For more information on
NMLS and SAFE.act, use the links below your contact information
form.
22.

The fha-homeloan.info website has provided links to the United States

Department of Housing and Urban Development website (hud.gov) and the National Mortgage
Licensing System website (mortgage.nationwidelicensingsystem.org) and stated that “On
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February 18, 2009 mortgage assistance was announced by President Obama when he unveiled
the Homeowner Affordability and Stability Plan. The Program was to provide about $75 billion
to [sic] in assistance to struggling homeowners.”
23.

Neither Mallett nor any of his websites, including gov-usdebtreform.net,

usdebtcare.net, worldlawdebt.org, and fha-homeloan.info, are, or have ever been, affiliated with
government agencies or have had authority to use the FTC seal in a manner that implies that they
are affiliated with the FTC. The Department of Consumer Services Protection Commission and
The U.S. Mortgage Relief Counsel are not, and have never been, government agencies.
24.

Defendant’s websites, including gov-usdebtreform.net, usdebtcare.net,

worldlawdebt.org, and fha-homeloan.info, do not contain the statement “[Name of the company
referred to on the website] is not associated with the government, and our service is not approved
by the government or your lender.”
Defendant’s Representations of Government Vetting and Approval
25.

Defendant has solicited consumers interested in debt relief, tax relief, and

mortgage assistance relief services through websites that represent that the member
organizations or entities referred to therein have been researched, monitored, or vetted by the
United States government.
26.

The gov-usdebtreform.net website has displayed the following statement:

The Department of Consumer Services Protection Commission monitors and
researches Nationwide activity of member companies and practices of
participating organizations in their process of providing various types of financial
assistance to American Consumers.
27.

The gov-usdebtreform.net website has featured a tab entitled “Member

Organizations,” which has linked to a webpage containing a list of “Participating Members of
the Department of Consumer Services Protection Commission.” The list has contained several
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organizations, which has included, at various times, two of Defendant’s trade names: U.S. Debt
Care and World Law Debt.
28.

Defendant also has maintained usdebtcare.net, which has stated that U.S. Debt

Care is a “Member of the Department of Consumer Services Protection Commission.”
29.

Neither the FTC nor any other government agency endorses or has endorsed

Mallett or any of his websites, including gov-usdebtreform.net, usdebtcare.net, wordlawdebt.org,
and fha-homeloan.info.
Defendant’s Representations to Reduce or Eliminate Debt
30.

Defendant solicits consumers interested in debt relief services that can be

obtained via the Internet. Defendant represents that using the services he promotes will result in
consumers having debts substantially reduced or eliminated. For example, gov-usdebtreform.net
has purported to provide financial consumer protection advice to consumers. It has featured tabs
that link to webpages purporting to provide advice pertaining to a myriad of financial issues
including “Student Loan Relief,” “Better Credit Bureau,” “Obama Foreclosure Program,”
“Loans and Credit,” “Dealing with Debt,” “Avoiding Scams,” “Identity Theft,” “Tax Solutions,”
and “Mortgage Information.”
31.

The gov-usdebtreform.net website also has provided several links to other

websites. The links have displayed text with representations including: “Your IRS Tax Debt
Can Be Reduced To A Fraction Of What Is Owed And You Can Be Debt Free. Click Here For
A Free Evaluation,” and “The Ultimate Debt Settlement Program. Our Debt Buyers purchase
your Debt from Creditors at a settled price. Then, You [sic] pay the debt buyer in easy LOW
and AFFORDABLE monthly payments. Minimum 5K debt.”

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32.

The gov-usdebtreform.net website has directed consumers to obtain additional

information by filling out its online “Debt Assistance Request Form” and/or “Tax Assistance
Request Form.” The forms have asked for the consumer’s name, telephone number, email
address, total unsecured debt or taxes owed, and the best time to call.
33.

After consumers have filled out the online Debt Assistance Request Form, they

frequently have received telephone calls from a third party organization that offers debt relief
services. In many instances, third party organizations have represented during these calls that
they will set up a reserve account for the consumer and subsequently negotiate a one-time
settlement payment for the consumer to pay his or her creditors a portion of his or her unsecured
debt, and will charge the consumer a percentage of the money saved. In many instances, third
party organizations have represented that they can settle a consumer’s debt for a payment of
approximately 25% to 40% of the amount owed (i.e., a 60% to 75% savings).
34.

Defendant also has maintained usdebtcare.net, which has displayed text stating

“at U.S. Debt Care, we connect Americans with Effective and Ethical Alternatives to Standard
Debt Settlement Programs, Debt Consolidation, Consumer Credit Counseling, and Bankruptcy.”
It has offered debt relief services through statements including: “U.S. Debt Care works with you
to put together a customized program specifically designed to relieve you of unsecured debt
burdens!” and “if you have $5,000 or more of unsecured debt and have experienced financial
hardship anytime since March 23, 2003 you may qualify for a U.S. Debt Care Legal
Enrollment Package!” The usdebtcare.net website also has described the types of debt with
which it can assist consumers and the services its “Consumer Service Department” provides.
The website has provided a toll-free phone number and online inquiry form so that consumers

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can “find out whether or not you qualify for U.S. Debt Care/World Law Legal Enrollment
Package.”
35.

Defendant has posted on usdebtcare.net a chart of “success stats” containing a

“settlement % rate” that purports to represent the percentage savings that he can obtain for
consumers on their debts. The success stats chart has displayed substantial reductions from the
amounts of debt consumers owed to the amounts of money they ultimately paid. Specifically,
the success stats chart has represented that U.S. Debt Care has settled consumers’ debts with
settlement payments of 16% to 40% of the amount owed (i.e., a 60% to 84% savings). An
example given in the chart is that a consumer who initially owed a “principle [sic] balance” of
“$15,355” ultimately paid the “settled amount” of “$2,400,” a “settlement % rate” of “16%”
(i.e., an 84% savings).
36.

The usdebtcare.net website has stated that it is the “Legal Consulting Arm for

World Law Debt” and has provided a link to wordlawdebt.org.
37.

Defendant also has maintained worldlawdebt.org, which has displayed statements

including: “We solve your debt problems with a personally assigned State Attorney” and “State
and Federal Attorneys will work with you on a financial analysis in determining the best avenue
to becoming debt free.”
38.

The worldlawdebt.org website has described the debt relief services it has

purported to provide with statements such as “WorldLawDebt.org and World Law Financial
offers 24 hour access to legal advice for our clients with financial concerns. Personal debt and
credit evaluation, structured debt settlements, and financial analysis are our field of legal
concentration.”

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39.

The worldlawdebt.org website has displayed the same toll-free phone number as

that listed on the U.S. Debt Care website, as well as an online form for consumers who wish
“[t]o speak with an attorney or legal financial specialist for a free enrollment assessment.”
VIOLATIONS OF THE FTC ACT
40.

Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts

or practices in or affecting commerce.”
41.

Misrepresentations or deceptive omissions of material fact constitute deceptive

acts or practices prohibited by Section 5(a) of the FTC Act.
Count I
42.

In connection with the advertising, marketing, promoting, offering for sale, or

sale of debt relief, tax relief, and mortgage assistance relief services, Defendant has represented,
directly or indirectly, expressly or by implication, that the websites or organizations he has
operated are agencies of the United States government, or affiliated or otherwise associated with,
or endorsed, sponsored, or approved by the United States government.
43.

In truth and in fact, Defendant and the websites and organizations that he

has operated are not agencies of the United States government, or affiliated or otherwise
associated with, or endorsed, sponsored, or approved by the United States government.
44.

Therefore, Defendant’s representations, as set forth in Paragraph 42 of this

Complaint, are false and misleading and constitute deceptive acts or practices in violation of
Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

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Count II
45.

In connection with the advertising, marketing, promoting, offering for sale, or

sale of debt relief, tax relief, and mortgage assistance relief services, Defendant has represented,
directly or indirectly, expressly or by implication, that the federal government has researched,
monitored, or vetted, and subsequently approved as legitimate, the assistance providers
identified on his websites.
46.

In truth and in fact, the federal government has not researched, monitored, or

vetted, and subsequently approved as legitimate, the assistance providers identified on his
websites.
47.

Therefore, Defendant’s representations, as set forth in Paragraph 45 of this

Complaint, are false and misleading and constitute deceptive acts or practices in violation of
Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).
Count III
48.

In connection with the advertising, marketing, promoting, offering for sale, or

sale of debt relief services, Defendant has represented directly or indirectly, expressly or by
implication, that consumers who use the services promoted on his websites will have their debts
substantially reduced, including by the specific percentages stated by Defendant.
49.

In truth and in fact, the representations set forth in Paragraph 48 of this Complaint

are false or were not substantiated at the time the representations were made.
50.

Therefore, the making of the representations, as set forth in Paragraph 48,

constitutes a deceptive act or practice in or affecting commerce in violation of Section 5(a) of the
FTC Act, 15 U.S.C. § 45(a).

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VIOLATIONS OF THE TELEMARKETING SALES RULE
51.

Congress directed the FTC to prescribe rules prohibiting abusive and deceptive

telemarketing acts or practices pursuant to the Telemarketing Act, 15 U.S.C. §§ 6101-6108, in
1994. The FTC adopted the original TSR in 1995, extensively amended it in 2003, and amended
certain sections thereafter.
52.

In 2010, the FTC amended the TSR to address the telemarketing of debt relief

services. The amendments, among other things, prohibit misrepresentations about material
aspects of debt relief services. Prior to 2010, except for certain specified transactions, the TSR
exempted from coverage telephone calls initiated by a customer in response to an advertisement
through any medium, other than direct mail solicitations. 16 C.F.R. § 310.6(b)(5). Effective
September 27, 2010, the amended TSR modified Section 310.6(b)(5) to also exclude from this
exemption telephone calls initiated by a customer in response to an advertisement relating to
debt relief services. 16 C.F.R. § 310.6(b)(5). Therefore, these telephone calls are covered by the
TSR.
53.

The TSR defines “seller” as “any person, who in connection with a telemarketing

transaction, provides, offers to provide, or arranges for others to provide goods or services to the
customer in exchange for consideration.” 16 C.F.R. § 310.2(aa). The TSR defines
“telemarketer” as “any person who, in connection with telemarketing, initiates or receives
telephone calls to or from a customer or donor.” 16 C.F.R. § 310.2(cc). Defendant is a “seller”
or “telemarketer” engaged in “telemarketing” as those terms are defined by the TSR, 16 C.F.R. §
310.2 (aa), (cc), and (dd). Defendant is a seller or telemarketer of “debt relief services,” as
defined by the TSR, 16 C.F.R. § 310.2(m).

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54.

The TSR prohibits sellers and telemarketers from, inter alia, “[m]isrepresenting,

directly or by implication, in the sale of goods or services . . . a seller’s or telemarketer’s
affiliation with, or endorsement or sponsorship by, any person or government entity.” 16 C.F.R.
§ 310.3(a)(2)(vii)(1995).
55.

Effective September 27, 2010, the TSR also prohibits sellers or telemarketers

from “[m]isrepresenting, directly or by implication, in the sale of goods or services . . . any
material aspect of any debt relief service, including, but not limited to, the amount of money or
the percentage of the debt amount that a customer may save by using such service.” 16 C.F.R. §
310.3(a)(2)(x).
56.

Pursuant to Section 3(c) of the Telemarketing Act, 15 U.S.C. § 6102(c) and

Section 18(d)(3) of the FTC Act, 15 U.S.C. § 57a(d)(3), a violation of the TSR constitutes an
unfair or deceptive act or practice in or affecting commerce, in violation of Section 5(a) of the
FTC Act, 15 U.S.C. § 45(a).
Count IV
57.

Since at least February 11, 2011, in connection with the telemarketing of debt

relief services, Defendant has misrepresented, directly or indirectly, expressly or by implication,
that the websites or organizations he has operated are affiliated with, or endorsed or sponsored
by, the United States government.
58.

Defendant’s acts or practices, as described in Paragraph 57 of this

Complaint, constitute deceptive telemarketing acts or practices that violate Section
310.3(a)(2)(vii) of the TSR, 16 C.F.R. § 310.3(a)(2)(vii).

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Count V
59.

Since at least February 11, 2011, in connection with the telemarketing of debt

relief services, Defendant has misrepresented, directly or indirectly, expressly or by implication,
material aspects of the debt relief services, including the amount of money or the percentage of
the debt amount that a customer will save by using Defendant’s services.
60.

Defendant’s acts or practices, as described in Paragraph 59, constitute

deceptive telemarketing acts or practices that violate Section 310.3(a)(2)(x) of the TSR,
16 C.F.R. § 310.3(a)(2)(x).
VIOLATIONS OF THE MORTGAGE ASSISTANCE RELIEF SERVICES RULE
61.

In 2009, Congress directed the FTC to prescribe rules prohibiting unfair or

deceptive acts or practices with respect to mortgage loans. Omnibus Act, § 626, 123 Stat. 678,
as clarified by Credit Card Act, § 511, 123 Stat. 1763-64. Pursuant to that direction, the FTC
promulgated the MARS Rule, 16 C.F.R. Part 322, all but one of the provisions of which became
effective on December 29, 2010. The remaining provision, Section 322.5, became effective on
January 31, 2011.
62.

The MARS Rule defines “mortgage assistance relief provider” as “any person

that provides, offers to provide, or arranges for others to provide, any mortgage assistance relief
service” other than the dwelling loan holder, the servicer of a dwelling loan, or any agent or
contractor of such individual or entity. 16 C.F.R. § 322.2(j). Defendant is a “mortgage
assistance relief provider” engaged in providing “mortgage assistance relief services” as those
terms are defined in the MARS Rule, 16 C.F.R. § 322.2 (i) and (j).

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63.

The MARS Rule prohibits mortgage assistance relief providers from, inter alia,

“[m]isrepresenting, expressly or by implication, any material aspect of any mortgage assistance
relief service, including but not limited to . . . [t]hat a mortgage assistance relief service is
affiliated with, endorsed or approved by, or otherwise associated with: . . . [t]he United States
government . . . [or] [a]ny Federal, State, or local government agency, unit, or department.” 16
C.F.R. § 322.3(b)(3)(i) and (iii).
64.

The MARS Rule also requires mortgage assistance relief providers to disclose “in

every general commercial communication for any mortgage assistance relief service: (1) (Name
of company) is not associated with the government, and our service is not approved by the
government or your lender.” 16 C.F.R. § 322.4(a)(1). Failing to provide this disclosure is a
violation of the MARS Rule.
Count VI
65.

In connection with the advertising, marketing, promoting, offering for sale, or

sale of mortgage assistance relief services, Defendant has misrepresented, directly or indirectly,
expressly or by implication, that Defendant is affiliated with, endorsed or approved by, or
otherwise associated with the United States government or any Federal, State, or local
government agency, unit, or department in violation of Sections 322.3(b)(3)(i) and (iii) of the
MARS Rule, 16 C.F.R. § 322.3(b)(3)(i), (iii).
Count VII
66.

In connection with the advertising, marketing, promoting, offering for sale, or

sale of mortgage assistance relief services, Defendant has failed to place the following statement
in general commercial communications for mortgage assistance relief services: “(Name of
company) is not associated with the government, and our service is not approved by the

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government or your lender” in violation of Section 322.4(a)(1) of the MARS Rule, 16 C.F.R. §
322.4(a)(1).
CONSUMER INJURY
67.

Consumers have suffered and will continue to suffer substantial injury as a result

of Defendant’s violations of the FTC Act, the TSR, and the MARS Rule. In addition, the
Defendant has been unjustly enriched as a result of his unlawful acts or practices. Absent
injunctive relief by this Court, Defendant is likely to continue to injure consumers, reap unjust
enrichment, and harm the public interest.
THE COURT’S POWER TO GRANT RELIEF
68.

Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers this Court to grant

injunctive and such other relief as the Court may deem appropriate to halt and redress violations
of any provision of law enforced by the FTC. The Court, in the exercise of its equitable
jurisdiction, may award ancillary relief, including rescission or reformation of contracts,
restitution, the refund of monies paid, and the disgorgement of ill-gotten monies, to prevent and
remedy any violation of any provision of law enforced by the FTC.
69.

Section 19 of the FTC Act, 15 U.S.C. § 57b, Section 6(b) of the Telemarketing

Act, 15 U.S.C. § 6105(b), and Section 626 of the Omnibus Act, respectively, authorize this Court
to grant such relief as the Court finds necessary to redress injury to consumers resulting from
Defendant’s violations of the TSR and the MARS Rule, including the rescission or reformation
of contracts, and the refund of money.

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PRAYER FOR RELIEF
Wherefore, Plaintiff FTC, pursuant to Sections 13(b) and 19 of the FTC Act, 15 U.S.C.
§§ 53(b) and 57(b), Section 6(b) of the Telemarketing Act, 15 U.S.C. § 6105(b), the Omnibus
Act, and the Court’s own equitable powers, requests that the Court:
A.

Award Plaintiff such preliminary injunctive and ancillary relief as may be

necessary to avert the likelihood of consumer injury during the pendency of this action and to
preserve the possibility of effective final relief, including but not limited to, temporary and
preliminary injunctions.
B.

Enter a permanent injunction to prevent future violations of the FTC Act, the

TSR, and the MARS Rule by Defendant.
C.

Award such relief as the Court finds necessary to redress injury to consumers

resulting from Defendant’s violations of the FTC Act, the TSR, and the MARS Rule, including
but not limited to, rescission or reformation of contracts, restitution, the refund of monies paid,
and the disgorgement of ill-gotten monies.

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D.

Award Plaintiff the costs of bringing this action, as well as such other and

additional relief as the Court may determine to be just and proper.
Dated: September 14, 2011

Respectfully submitted,
WILLARD K. TOM
General Counsel

s/K. Michelle Grajales
K. MICHELLE GRAJALES
GREGORY A. ASHE, DC Bar # 451552
LISA A. ROTHFARB
Federal Trade Commission
600 Pennsylvania Ave., N.W., Room NJ 3158
Washington, D.C. 20580
Telephone: [phone] (Grajales)
Telephone: [phone] (Ashe)
Telephone: [phone] (Rothfarb)
Facsimile: 202-326-3768
[e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION

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