Smith Votes For Distressed Property Legislation
In the Spring of 2009, Attorney General Andrew Cuomo announced that his office was conducting a statewide investigation into the loan modification industry. According to the Attorney General’s investigation, several companies lured consumers though false and misleading tactics, that include using company names and advertisements that give the false impression that they are affiliated with a government agency. Furthermore, such advertisements make false claims, such as claiming to have an exorbitant success rate, as high as 100 percent.
These companies prey on hapless consumers who fell victim to the current economic downturn and housing crisis, by offering false hope for a solution preventing foreclosure. Their solicitations may be in person, by mail, telephone or email, or via advertisements. Often these scammers use titles that sound official such as a “foreclosure or mortgage consultant” or falsely market themselves as a “foreclosure service” or “foreclosure rescue company.” This week, State Senator Malcolm Smith voted for legislation (S5896c) to protect consumers from distressed property consulting service scams by requiring all companies offering these services to include a consumer warning statement in all advertisements.
Smith said, “Ensuring that New Yorkers who have already fallen prey to deceptive lending practices are not once again victimized by misleading advertisements is crucial.”