The record fine levied on the St. Petersburg mortgage company operated by civic activist Bill Edwards appears to be appropriate. It's bad enough that the Federal Trade Commission found the company called millions of phone numbers on the National Do Not Call Registry. It's worse that the FTC says the company also misled veterans on those calls. Edwards has some explaining to do, particularly since he is in high-profile partnerships with city taxpayers on key projects.
The FTC fined Mortgage Investors Corp. a record $7.5 million for violating the Do Not Call rule, finding the company called more than 5.4 million numbers listed on the registry to promote home loan refinancing services to current and former members of the U.S. military. The Do Not Call rule has been in place for years and is a popular consumer protection, and such a large number of alleged violations should be taken seriously.
Even more disturbing is the nature of the telemarketing calls as described by the FTC. The commission says the telemarketers led service members to believe they were talking about fixed-rate mortgages with low interest rates and no costs. Actually, the FTC says, the products were adjustable-rate mortgages with interest rates that could rise, and there were closing costs. The fine is the first for misleading mortgage ads under the Mortgage Acts and Practices-Advertising rule, and the FTC should remain vigilant in rooting out deception that can cost home buyers thousands of dollars.
Mortgage Investors does not admit or agree to the allegations in its proposed settlement with the FTC, which is subject to federal court approval. Edwards told the Times editorial board on Monday that he cannot comment on the proposed settlement. But Floridians take mistreatment of veterans seriously, and Gov. Rick Scott on Monday signed a law that strengthens the state's authority to fine anyone who uses deceptive or unfair trade practices against military service members and their families.
City Hall also should ask some questions. St. Petersburg awarded a contract to another Edwards company two years ago to manage the city-owned Mahaffey Theater instead of choosing the nonprofit Ruth Eckerd Hall Inc. Edwards has invested more than $2 million in refurbishing the Mahaffey, and he set up his own theater foundation that took away most of the former foundation's responsibilities. He is rebuilding the former BayWalk entertainment complex, which sits on land assembled by the city and depends on a city-owned garage for parking. And he paid $600,000 for the 75-foot-tall tower along Interstate 275 that welcomes drivers into the city.
Edwards and St. Petersburg are inextricably linked, but he said Monday all of those projects are separate. "None of that money comes out of the mortgage company,'' he said. "My investments are solid. We are still moving on.''
That's good. A vibrant downtown needs a busy performing arts center and a reopened BayWalk. But anything that reflects negatively on Edwards reflects badly on St. Petersburg. City officials should ensure there is a solid wall between Edwards' mortgage company and his other companies that have relationships with the city.