Countrywide Served with Subpoena in Mortgage Fiasco

Countrywide Financial Corp. confirmed that it received a subpoena from Florida’s Attorney General wanting information on its business practices, The Wall Street Journal is reporting.

Countrywide is at the core of the investigation into predatory loan techniques. The Florida AG wants information on how the company handles payments from borrowers, sales practices and its loan standards.

The company is also under investigation for the fees it attaches to consumers who face foreclosure on their homes. Florida joins states like California and Illinois currently investigating Countrywide over its business practices.

Florida AG Bill McCollum says his office is investigating at least 150 complaints about Countrywide, the country’s largest home loan lender. Illinois is already underway in looking at the documents Florida subpoenaed. That office is specifically looking at consumer fraud violations, deceptive practices, subprime and option adjustable rate mortgages.

Subprime Mortgages Spawn FBI Probe

The FBI is opening criminal inquiries on 14 companies as the nation looks to solve the mortgage fraud epidemic that’s plaguing the economy.

The investigation is aiming at possible accounting fraud and insider trading among lenders who gave money to subprime borrowers, according to an article appearing today in The New York Times.

No companies were identified by the FBI, but it did say the investigation is wide-ranging. This is really the first official action outside of talking taken by the government to combat the mortgage disaster that has thousands facing the prospect of losing their homes to foreclosure.

The FBI will work with the Securities and Exchange Commission as part of the investigation. Currently, the SEC is looking into about three dozen cases of subprime loans, how they were made and sold to consumers.

Several states are looking into mortgage fraud, too, and the FBI will use these cases are the crux of its investigation. Attorneys General from New York, Ohio, Massachusetts, Illinois and Connecticut are currently investigation lenders for deceptive practices.

Ashley Furniture Settles Arizona Deceptive Advertising Charges

Ashley Furniture has agreed to settle with the State of Arizona over numerous customer complaints over delivery and deceptive advertising.

The company agreed to pay $400,000 to the state and it will be used to pay for consumer fraud education, attorneys’ fees and investigation costs, reports. Ashley must change its business practices regarding advertising and delivery and order cancellations, as part of the settlement.

Customers will not have a right to cancel late orders and the right to prompt repair service for defective furniture. Also, it must repay customers who were forced to pay a $2,000 restocking fee. Also, customers who received defective furniture can expect refunds of up to $8,000 if they received defective furniture.

The lawsuit stems from 2004 and 2005 when Arizona’s Attorney General received numerous complaints about very late deliveries from Ashley Furniture. Other complaints said the company was delivering defective furniture.

Here are highlights of the rest of the settlement:

.. If Ashley offers zero financing, it must include a statement that says a minimum purchase applies, and a print ad must specify that amount.

.. Ashley must provide approximate delivery dates at the time of a purchase.

.. Ashley cannot make any customer accept the delivery of defective merchandise.

Don’t Waste Money on Credit Insurance

Consumers may be a touch too paranoid when they sign up for additional credit protection offered by their lenders, reports an article appearing the Chattanooga (Tenn.) Times Free Press.

Author Ellen Phillips, who’s written several consumer advocacy books, suggests so-called additional credit protection – typically offered as an additional monthly fee ranging from $10-20 – is a bit of rip-off, and nothing more than an expensive backup system.

Phillips says being a mindful and organized consumer offers the best protection against identity theft and these fees will in no way prevent it. She says most lenders have a built-in fraud department, typically activated by an unusual purchase.

When such a charge appears on your record, the credit company will call a consumer and alert them to it, with the consumer either confirming or denying making the usually large purchase. A credit card can then be suspended or deactivated and still it’s up to the consumer to make repairs to the now tainted credit.

This so-called credit insurance will do nothing but maybe ensure your lender will do these aforementioned action items.

She suggests keeping all receipts and doing a parallel test of receipts versus statement and then notifying the credit card company of any suspicious charges. If a consumer loses a card, it’s always best to notify the credit card company immediately.

EdebitPay to Pay $2.2 Million Settlement for Unauthorized Debits and Deceptive Marketing

On January 25, reported that EdebitPay LLC, which marketed pre-paid Visa and MasterCard debit cards to subprime consumers, has agreed to settle Federal Trade Commission charges that it made unauthorized debits from consumers’ bank accounts and engaged in deceptive marketing practices. The settlement requires the LA based company to pay $2,258,258 for consumer redress.

According to the FTC’s complaint, the defendants marketed bank-issued prepaid debit cards under a variety of names through Web sites and pop-up and e-mail advertisements that directed consumers to sites for the individual cards (including Acclaim Visa, Impact Visa, Sterling Visa, VIP Advantage Visa, Vue Visa, Elite Plus MasterCard, Impact MasterCard, Secure Deposit MasterCard, VIP MasterCard, and Vue MasterCard).

The complaint also contends that, among other things, the defendants debited, without authorization, a $159.95 “application and processing” fee from consumers’ bank accounts, including from consumers who did not submit an online application for the prepaid cards or who had applied for an unrelated short-term loan.

Pure Weight Loss Draws Ire of PA Attorney General

Pennsylvania’s Attorney General has filed a lawsuit against a popular weight loss center that recently closed it doors.

The office says Pure Weight Loss, formerly known as L.A. Weight Loss was taking new membership fees from customers after it had announced it would shut its operation. The company and its owner is being charged with consumer fraud and deceptive business practices.

Pure Weight Loss is based in Horsham, Pa., minutes west of Philadelphia. The Commonwealth’s AG office received 850 complaints from customers about the business. WPHL-TV of Philadelphia reports that representatives of Pure Weight Loss could not be reached for their story.

Online Furniture Company Elite Purchasing Group Sued by Florida Attorney General

Florida Attorney announced yesterday that his office has filed a lawsuit against Elite Purchasing Group, an online furniture company from Broward County, because the company misled consumers about its ability to deliver requested merchandise. The Attorney General’s Office received more than 60 complaints about the company in only 18 months, most citing the company’s failure to deliver furniture on a timely basis even though the company advertised shipments within one business day. According to, some consumers never received their furniture at all. reports that according to consumer complaints, the company also failed to uphold its promise to replace or repair furniture that was delivered damaged or defective. On one occasion, a consumer paid more than $7,000 for chairs that were delivered in pieces.

New Jersey AG Sues Photo Lab

A New Jersey-based wedding photo studio is facing four counts of consumer fraud after it failed to deliver any goods or refunds to newlyweds.

The state’s Attorney General’s office filed the claims against Celebration Studios Inc. and its owner Mark S. Schwartz. It accuses the company of failing to provide photos, videos and other items to hundreds of newlywed couples. Also, the company charged clients’ credit cards without notifying customers and also lied, saying it was reorganizing its company when it was really closing.

The studio served customers in New Jersey, Pennsylvania and New York.

Attorney General Anne Milgram said in a statement. “We have close to 600 consumers who are distraught because they did not receive the photos, videos and other visual keepsakes of their weddings. We want these consumers to get their wedding albums and for the defendants to be held accountable.”

The court issued a temporary restraining order against the photo studio from destroying or disposing of any materials that may help former clients connect with their wedding day memories: photo or video files, negatives or proofs.

Beware Foreclosure Fraud

The Fernley (Nev.) Leader newspaper recently published a list of tips to avoid foreclosure fraud.

Though homeowners hear of terms such as “equity skimming”, “phantom help”, “the Bailout”, “the Bait and Switch”, many do not understand when they are happening.

The paper suggests getting detailed information about deadlines, paying special attention to when a homeowner would lose legal rights to the property. Consumers should never sign any contract under pressure. Accessing legal help before signing a contract is a consumer’s best protection against fraud.

Signing away ownership through a quitclaim deed or agreeing to any offer to buy back a home after time is often not in the consumer’s favor. A lawyer’s eyes would greatly aid the homeowner in these situations, too.

Mortgage payments should never be made to anyone other than the lender. Homeowners should beware of any home-sale contract which doesn’t release them from mortgage liability.

Forms with blank lines should never be signed and non-English speaking homeowners should never use a lender’s translator.

Florida Attorney General Sues Imergent and StoresOnline for Consumer Fraud

Get rich quick schemes run by Imergent, Inc and StoresOnline, Inc are allegedly using deceptive practices to get consumers to buy expensive website-creation products and services, or so says the Florida Attorney General’s lawsuit against the two Utah companies.

According to, the companies run seminars in Florida and other states at which they tell consumers they can make a fortune doing business on the internet with the companies’ software and related services. According to the lawsuit, the companies mislead consumers into thinking their products are easy to use and that they will provide technical support and business partners.

More than 80 Florida consumers have complained to the Attorney General about the companies, which frequently make sales presentations in Florida. The complaints state that after paying thousands of dollars, consumers found the software and services were impossible to use and they couldn’t get the technical assistance that was promised, reports.