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Mortgage Class Action Letters and Irene Update

"Mass Joinder" lawsuit fraud looking for victims; FBI and NCDF looking for suspected fraud

By Florence Klein
Florence Klein
Courtesy of Florence Klein

The Internet Crime Complaint Center, the California Department of Real Estate and the Better Business Bureau have issued warnings about a current "Mass Joinder" lawsuit scam. The scam is currently showing up in California mail boxes but delivery in other states could start soon. These things usually do.

There are times when large companies make mistakes and there are consumer groups on the look out for these times. Many times lawsuits are needed to get funds to make amends for overcharges or out right misdeeds. Class action lawsuits are a way for a group affected people to join in on a lawsuit that an individual cannot undertake.

Law firms, and companies themselves, send out letters to affected individuals and potentially affected individuals. These letters give information on the suit and provide contact information in case the person receiving the letter requires or wants more information. The letter should instruct individuals what to do if they wish to opt in or out of the class action.

The current scam uses a fraudulent "Mass Joinder" lawsuit purportedly filed by a law firm in California against their mortgage company. The fraud asks individuals to pay up front fees of $2,000 to $5,000 (non-refundable of course) to be part of the class action suit.

Reports claim a wide variety of claims and sales pitches are offered in hopes of gaining money from the selected victims. Legal and litigation services are reportedly offered to the victims in connection to the case.

Here is what the Internet Crime Complaint Center, the California Department of Real Estate, the Better Business Bureau and concerned citizens want you to know:

  • Lawyers seeking plaintiffs to join a class in a class action suit do not seek up front money from potential clients
  • Lawyers in class action lawsuits typically get paid on a contingency basis
All these groups warn that if you receive a "Mass Joinder" letter requesting up front commission money do not pay! Instead report the letter.

As a follow up on the Hurricane Irene Relief scams, the National Center for Disaster Fraud (NCDF) and the FBI set up a hotline for reporting suspected relief fraud. The NCDF and FBI established the hotline for reporting suspected fraud associated with relief efforts for Hurricane Irene. The number is staffed around the clock seven days a week. To report suspected fraud call (866) 720-5721 or email the NCDF at disaster@leo.gov

To file any other type of complaint or get free information on consumer issues, visit the FTC or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261 or watch a video, How to File a Complaint.


Published September 7, 2011

Florence Klein





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