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Complaint Filed Against Florida Mortgage Firm for Do Not Call Violations

CA Attorney General files complaint against Mortgage Concepts

June 29, 2004


A Florida-based mortgage company was accused of violating federal "Do Not Call" laws by pretending to conduct surveys in an effort to contact California consumers about refinancing their mortgages. It remains to be seen whether the lawsuit filed by the California Attorney General's office will result in a judgment such as the recent one involving a home improvement company.

Attorney General (AG) Bill Lockyer announced the state filed a complaint in the U.S. District Court of Sacramento, Calf. against L.M.A. Marketing, Inc., doing business as Mortgage Concepts, in January. The New Smyrna Beach, Flo.-based mortgage company allegedly placed automated calls to California consumers under the guise of conducting a "survey." A prerecorded message asked questions relating to whether the consumer was interested in refinancing, and depending on the consumer's responses, a company representative would call him or her back to pitch its refinancing service.

In over 250 filed complaints against Mortgage Concepts, consumers said that when they informed the company representative they were on the Federal Trade Commission's Do Not Call list, they were told the firm was exempt from the national law because it was conducting a survey, according to the AG announcement.

"Federal law makes it clear that commercial calls are off limits to consumers who have placed their names on the national Do Not Call Registry," Lockyer said in a statement. "This lawsuit should serve as a warning to telemarketers who think they can evade this important consumer protection law by pretending to conduct a 'survey' while harassing Californians in the privacy of their homes."

The complaint alleges that Mortgage Concepts violated the federal Telephone Consumer Protection Act (TCPA), which can cost $500 in damages per violation, and $1,500 if the violations are willful or knowing. Accusations of violating the Telemarketing Act by placing telemarketing calls to phone numbers listed on the national Do Not Call Registry, can reportedly result in the company paying actual damages, restitution and other compensation on behalf of California consumers illegally contacted by the company. The lawsuit accused the defendants of violating other federal rules.

If Mortgage Concepts is found to have violated a section of the state's Business and Professions Code by engaging in unfair business practices, the AG said it can obtain civil penalties of up to $2,500 for each violation of the telemarketing laws.

The complaint seeks that the company cease the alleged unlawful practices, pay $100,000 for violations of the TCPA, pay $100,000 in civil penalties and unspecified damages for violations of the Telemarketing Act, and pay reimbursement to the AG's Office for the costs of the investigation and prosecution.

The AG noted that several companies across the country do business under the name Mortgage Concepts, but the complaint involves only the business of L.M.A. Marketing in New Smyrna Beach.

This lawsuit, which is the second brought by the California AG since the federal Do Not Call laws went into effect in October, is still ongoing and has no definitive ending date, the AG Office said.

L.M.A. Marketing could not be reached for comment.

The AG said it filed the nation's first Do Not Call lawsuit against American Home Craft in early November. The home improvement company was charged with making illegal telemarketing calls to more than 120 Californians who had placed their phone numbers on the national Do Not Call registry, and with continuing to call consumers after they asked to be placed on the company's internal "do not call" list.

Last week, the AG announced it obtained a judgment that requires American Home to comply with federal and state "do not call" laws, to investigate and report complaints, and to train its employees. The company and its president were ordered to pay $45,000 in civil penalties, $30,000 for investigation and prosecution costs and $25,000 in restitution to the California residents who lodged complaints against the company with the AG, FTC and Federal Communications Commission. Individual consumers who filed a complaint prior to the entry of the judgment will reportedly receive damages of up to $200 each.

California's own Do Not Call law, which became effective in January, provides civil penalties of $11,000 per violation. Lockyer reportedly brought the lawsuit against L.M.A. Marketing, Inc. and Mortgage Concepts under the federal TCPA and Telemarketing Act because the violations occurred prior to the state law taking effect.

Coco Salazar is an assistant editor and staff writer for MortgageDaily.com.

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