Federal Trade Commission halts misleading loan modification ads on the Internet

Scam artists sure are brave. Well, there are probably more accurate ways to describe those who deliberately take aim at people in dire financial straits. They just are not fit to be published.

Turns out the Federal Trade Commission has spotted a series of deceptive Internet advertisements that claimed to lead browsers to the "official" Web site of the recently introduced Making Home Affordable program, a national effort that provides free mortgage loan assistance and encourages banks and lenders to help homeowners stay afloat. The actual official Web address is http://www.makinghomeaffordable.gov/

The FTC promptly filed a court order to halt the misleading ads that were popping up on some of the most popular search engines, such as yahoo.com, msn.com and altavista.com.

Many people facing bankruptcy today are dealing with unreasonable mortgage loans as a result of aggressive and poorly vetted loan programs.

The ads took advantage of Web searches for mortgage assistance and the federal program. The ads would lead to a site that offered loan modification programs for a fee. Previous posts on the blog have mentioned the government program, which is worthwhile in principle but is facing some communication hurdles. For example, since it is not marketed particularly well, the opportunities for scammers to take advantage are fairly prevalent. There simply hasn't been enough education about the program. However, many American home owners have benefited from its initiatives.

Those named in the complaint are accused of using "sponsored links," or paid search results, that boldly displayed the official Web site. However, clicking on the ad lead to Web sites of private mortgage assistance programs that charged fees and were in no way associated with the free services available through the government.

But that's not the end of it.

The misleading approach would be somewhat easier to accept if these Web sites were associated with legitimate loan modification companies simply being too aggressive in their marketing or that didn't realize to what extent they could affiliate themselves with the Making Home Affordable program. However, it appears that those behind the pixelated solicitations are nothing more than common criminals seeking to swipe identities. The Web sites asked for extensive financial information and, wait for it ... social security numbers! Not only that, some of the sites boasted that they only refer people needing help to yet another loan modification service, which is simply an effort to take your information and further distance themselves from the crime.

The examples of Web-based fraud and below-the-belt assistance scams are becoming more and more prevalent. In light of the ever growing shadows over exactly who can help and what service is best, people facing financial difficulty are best served by speaking to a reputable attorney that specializes in bankruptcy law and helping people navigate the choppy economic waters caused by storms of mounting debt.

Be careful out there.