Photo (cc) by woodleywonderworks
Colorado-based payment processing company Paymap Inc. and LoanCare Servicing, a Virginia-based residential mortgage servicer, allegedly deceived consumers with advertising for a mortgage payment program that promised tens of thousands of dollars in interest savings if consumers agreed to more frequent (biweekly) mortgage payments.
According to the Consumer Financial Protection Bureau, Paymap and LoanCare were partners on the “Equity Accelerator Program,” an electronic payment system that allowed consumers to use electronic debits from their bank accounts to make automatic mortgage payments.
The program’s ads promised that consumers who signed up for the more frequent biweekly payoff schedule could save thousands of dollars in interest. For instance, Paymap said on its website: “The average customer will achieve over $33,000 in interest savings” using its equity accelerator program.
Unfortunately, the mortgage payment program, which cost consumers $295 to enroll and a $2.50 fee each time an automatic debit was made, didn’t actually make more frequent mortgage payments on their customers’ accounts, nor did consumers experience the advertised interest savings, the CFPB said.
“Deceptive advertising has no place in the financial marketplace,” said CFPB director Richard Cordray. “Today’s action is delivering relief for consumers deceived by Paymap and LoanCare, and sending a clear message that these practices will not be tolerated.”
The companies have also been ordered to stop their unlawful advertising and marketing practices.
Does this story make you want to go back and check the details of your mortgage payments? Share your comments below or on our Facebook page.