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Washington, D.C. - The FTC has begun distributing over $1.2 million in refunds to 6,261 consumers (each receiving $201.34), who were affected by a deceptive mortgage loan modification scam. The refunds follow a lengthy legal battle against Consumer Defense and its associated entities, including Preferred Law and American Home Loan Counselors.

Key Points

• The company Consumer Defense and its executives, Jonathan P. Hanley, Sandra X. Hanley, and Benjamin R. Horton, operated under various names throughout Nevada and Utah.
• The network of companies misled homeowners by promising to stop foreclosures and lower mortgage costs but illegally charged $650 each month upfront.
• Despite paying significant fees, many homeowners never received the loan modifications they were promised. In some cases, the company didn't even contact the homeowners' lenders.
• In 2019, a federal court decided in favor of the FTC and ordered the defendants to pay $18.5 million, give the FTC access to various bank accounts, and sell the defendants' assets to give the proceeds to the FTC.
• Assets for sale include a ski chalet in Park City, Utah, an office building, a Mercedes Benz S550, and a Porsche Carrera.
• This decision was challenged by Consumer Defense, but the appellate court confirmed it in 2022. The following year, in 2023, a district court imposed a financial judgment under the FTC Act.