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Business duped homeowners facing foreclosure, suit says

By Will Van Sant, Times Staff Writer
In print: Friday, April 4, 2008

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State Attorney General Bill McCollum on Thursday sued a Clearwater foreclosure rescue operation, accusing it of engaging in deceptive and unfair business practices.

The lawsuit alleges that Law & Associates pitched services to homeowners facing foreclosure in Florida and across the country through direct mail and various Web sites.

Those who responded were charged an up-front cash fee of $1,500 to $2,000 for guidance and help negotiating with lenders, but the services never materialized, according to the suit.

Despite an advertised money back guarantee, unhappy customers sometimes did not get their fees returned.

The attorney general's office reviewed more than 65 consumer complaints about the company, which began operating in Clearwater in 2004. In none of those cases did the company actually prevent foreclosure of a home, the lawsuit says.

The company's actions "shock the conscience," and "offend established public policy and are unethical, oppressive, unscrupulous or substantially injurious to consumers," the suit says.

Thomas E. Law, described in the lawsuit as the company's sole managing member, could not be reached for comment.

"More citizens in Florida are facing the very real possibility of losing their homes to foreclosure than anywhere else in the country," McCollum said in a statement. "My office will continue working to ensure that businesses who offer assistance to these people are held accountable to the law."

McCollum's lawsuit alleges six counts of violating the state's Deceptive and Unfair Trade Practices Act. The state is asking the circuit court to order the company to cease operating. It's also hitting the company for $60,000 in fines and asking that customers get their fees returned.

Though some companies do offer legitimate assistance to distressed homeowners behind on mortgage payments, it's an area of commerce ripe for unscrupulous profiteers.

Deborah Berry, operations manager for Pinellas County's Justice and Consumer Services Department, said regulators are finally giving the issue the attention needed.

"Both the feds and the state are definitely looking at these companies now and their various operations," she said.

Berry said that through 2007 until now, her office had gotten 8 complaints from consumers who had sought help from Law & Associates.

Times researcher Caryn Baird contributed to this report. Will Van Sant can be reached at vansant@sptimes.com or 445-4166.