PA AG Corbett Announces Lawsuits Against MD & PA Mortgage Businesses

More Than 500,000 Calls To Consumers On "Do Not Call" List

August 12, 2008 -- Harrisburg - Pennsylvania Attorney General Tom Corbett announced that consumer protection lawsuits have been filed against two business owners and their companies, who are accused of violating Pennsylvania's "Do Not Call" law and other consumer protection statutes.

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The companies, based in Baltimore, Maryland, and State College, Pennsylvania, are accused of using illegal telephone solicitations to aggressively market mortgage products to consumers - including what Corbett alleges is the largest-ever systematic effort to violate the Do Not Call program since it was created in 2002.

Corbett said the civil lawsuits were filed by the Attorney General's Bureau of Consumer Protection against the following businesses and individuals:
- Charles A. Ruppersberger IV, 100 Harborview Drive, Baltimore, doing business as Direct Leadsource, also of Baltimore.
- Justin Harford, 1192 Westerly Parkway, State College, Centre County, doing business as Golden Apple Mortgage, Foote's, Inc. and New Equity LLC, all of State College.

"As the economy and housing markets change in Pennsylvania and around the country, some mortgage companies are using aggressive new tactics to solicit customers." Corbett said. "Today's consumer protection lawsuits are an important step to protect consumers from illegal conduct and send a clear message that lending companies must obey the law."

Charles Ruppersberger / Direct Leadsource

Corbett said that Ruppersberger and his Baltimore-based company, operating under the names Applied Financial and Financial Awards Center, used a telephone call center in Gujarat, India to place in excess of 500,000 sales calls to Pennsylvania consumers marketing various first and second mortgages.

"This is the most extensive campaign of telemarketing calls to consumers on the Do Not Call list ever investigated by my office," Corbett said. "Using an international call center, they invaded the homes of thousands of Pennsylvania residents with unsolicited and unwanted phone calls, marketing mortgage loans that they were not licensed to sell."

Corbett explained that that Ruppersberger and his business are not licensed by the Pennsylvania Department of Banking to sell mortgages in the Commonwealth. Additionally, Corbett alleged that Ruppersberger and Direct Leadsource, Inc. committed numerous other violations of state law, including:
- Failing to register their telemarketing operation.
- Calling consumers who had previously asked not to be called again.
- Calling consumers after 9:00 p.m.
- Failing to identify themselves to consumers.
- Failing to register the fictitious business names with the Pennsylvania Department of State.

Corbett said the Attorney General's Bureau of Consumer Protection received complaints from consumers in Adams, Allegheny, Beaver, Berks, Blair, Bucks, Cambria, Carbon, Chester, Clearfield, Cumberland, Dauphin, Delaware, Erie, Fayette, Jefferson, Juniata, Lackawanna, Lancaster, Lehigh, Luzerne, Lycoming, Mercer, Mifflin, Montgomery, Northampton, Philadelphia, Pike, Schuylkill, Susquehanna, Union, Venango, Warren, Westmoreland, Wyoming, and York.

Corbett said that call records obtained by the Attorney General's Office indicate that Direct Leadsource placed approximately 97,000 calls to consumers in the "610" area code; 81,000 calls to the "724" area code; 77,000 calls to the "215" area code; 71,000 calls to the "717" area code; 65,000 calls to the "570" area code; 57,500 calls to the" 412" area code; 57,000 calls to the "814" area; 1,900 calls to the "484" area code and 650 calls to the "267" area code.

According to the lawsuit, Ruppersberger and his company violated Pennsylvania's Consumer Protection Law; the Telemarketer Registration Act; the Mortgage Bankers and Brokers and Consumer Equity Protection Act; the Secondary Mortgage Loan Act; and the Fictitious Names Act.

The lawsuit seeks full restitution for any consumer who suffered losses as the result of actions that violated the Consumer Protection Law, along with civil penalties of up to $1,000 for each violation (up to $3,000 for violations involving seniors). Additionally, the lawsuit asks the court to prevent Ruppersberger or his company from any further telemarketing in Pennsylvania until any court-ordered fines and costs are paid.

Justin Harford / Apple Mortgage
Corbett said that Justin Harford and his Centre County companies, operating under the name Apple Mortgage, are accused of making illegal telephone sales calls as part of an aggressive marketing campaign to sell first and second mortgages; mortgage refinancing loans; home equity loans; and debt consolidation loans. The Defendants' advertisements promised "No Money Down Purchases" and said that "Less than Perfect Credit" and "1 Day out of Bankruptcy" were "OK".

According to the lawsuit, Harford and his companies scoured courthouse records to obtain information about consumers with existing mortgages and then called those consumers in an attempt to sell mortgage products to them. Those calls were made without purchasing or using the Pennsylvania Do Not Call list, in violation of the state's Telemarketer Registration Act.

Corbett's said that Harford and his mortgage operation are also accused of repeatedly calling consumers who clearly told them not to call again.

Corbett noted that the lawsuit includes a copy of a written warning issued by the Attorney General's office to Harford in July 2007, advising Harford that his calls were potentially in violation of the Do Not Call. According to the lawsuit, Harford ignored this notice and continued engaging in illegal activity.

Corbett said that consumers in Adams, Blair, Bucks, Butler, Chester, Clearfield, Franklin, Lancaster, Monroe, and York counties contacted the Bureau of Consumer Protection to file complaints about calls from Apple Mortgage.

The lawsuit seeks civil penalties of up to $1,000 for each violation of the Consumer Protection Law (up to $3,000 for violations involving seniors) and seeks to prevent Harford and his companies from any further telemarketing in Pennsylvania until any court-ordered fines and costs are paid.

Corbett said that lawsuits were filed in Commonwealth Court, in Harrisburg, by Senior Deputy Attorney General David Sumner of Attorney General Corbett's Bureau of Consumer Protection.

Pennsylvania's Do Not Call Law
Corbett said that since Pennsylvania's Do Not Call law went into effect in 2002, the Attorney General's Office has filed more than 75 legal actions against companies accused of violating the statute. Telemarketers who violate the provisions of the law face a civil penalty of $1,000 per violation, increasing to $3,000 if the call is placed to a person age 60 or older. To date, more than $800,000 in civil penalties and other payments have been assessed against violators of the Do Not Call law.

Corbett said that consumers can place their home and wireless phone numbers on the Do Not Call list online at www.attorneygeneral.gov, by calling the toll-free hotline at 1-888-777-3406, or by mailing their name, mailing address, telephone number and signature to the Attorney General's Office.

Consumers who are on the Do Not Call list and feel that they have received a telemarketing call that is not permitted under the law can file a complaint with the Attorney General's Bureau of Consumer Protection online at www.attorneygeneral.gov or by calling 1-888-777-3406.

Source: Pennsylvania Attorney General