Twenty companies got warning letters from the Federal Trade Commission that their ads may be deceptive. Real estate agents, home builders, and lead generators were warned to review their advertisements for compliance with the Mortgage Acts and Practices Advertising Rule and the FTC Act or face possible penalties. In addition, the Consumer Financial Protection issued warning letters to a dozen mortgage brokers and lenders. The two agencies reviewed about 800 ads from websites, Facebook, direct mail and newspapers.
According to the FTC: “The agencies’ review revealed several types of troubling claims that could be misleading to consumers. Examples are illustrated in these ‘mock ads’. The agencies’ review found, for example:
- Advertisements offering a very low “fixed” mortgage rate, without discussing significant loan terms.
- Advertisements containing statements, images, symbols, and abbreviations suggesting that an advertiser is affiliated with a government agency.
- Advertisements “guaranteeing” approval and offering very low monthly payments, without discussing significant conditions on these offers.
For more advice from the FTC, see the website Your Home and the publication Deceptive Mortgage Ads: What They Say; What They Leave Out.
The FTC maintains Consumer Sentinel, a secure, online database of information based on consumer complaints that is available to 2,000+ civil and criminal law enforcement agencies in the U.S. and abroad. Better Business Bureau is the agency’s largest non-government supplier of complaint information.