A company that generates refinance mortgage leads has settled charges that it misled loan prospects about the cost of the transactions.
Firms that advertise mortgage programs are required to adhere to requirements in the Truth in Lending Act and its implementing Regulation Z.
They are also subject to the Federal Trade Commission Act, the Mortgage Acts and Practices Advertising Rule, or MAP Rule, and Regulation N.
But Intermundo Media LLC is accused of violating those laws and rules, according to the FTC.
The Boulder, Colo.-based company promoted refinance programs through its Delta Prime Refinance campaign, which was advertised on search engines such as Google, Microsoft and Yahoo and on its own website.
According to the FTC, when prospects clicked on an ad, they were directed to a landing page that collected contact information that was passed on to mortgage originators.
Problem was that consumers were falsely advised that the refinances were free, no hidden fees were involved, and they would save $2,000 a year, the commission alleges.
“An ad that says you can refinance your mortgage for free is clearly deceptive if you have to pay money at some point before you sign on the dotted line,” FTC Bureau of Consumer Protection Director Jessica Rich said in the announcement. “Lead generators need to understand that federal laws governing truth in advertising apply to them as well as everybody else.”
The FTC claims that the Delta Prime Refinance ads made deceptive and unsupported claims overstating how much payments would be reduced, how low annual percentage rates would be and how easy qualifying would be.
In addition to promoting free refinances, some ads claimed that fixed interest rates were available even though the stated rates were adjustable.
Intermundo Media agreed to settle the charges for $500,000.
The settlement also requires it not to misrepresent the terms and conditions of its products. It additionally is prohibited from disclosing, selling, or transferring the consumer data obtained through the Delta Prime Refinance lead generation service.
