The Federal Trade Commission stopped the clock on 30 Minute Mortgage Inc.'s activities with a complaint that charges the firm with spamming consumers with an offer for a non-existent 30-year mortgage and illegally collecting personal financial data in an effort to later sell that data.

The spam -- sent to at least 3 million California e-mail addresses a week -- led consumers to the Boca Raton, FL company's Web site 30MinuteMortgage.com, which was still operating Thursday, March 26 under the FTC's watchful eye.

The site is little more than an electronic loan application asking for sensitive personal information including income, employment history, social security numbers, mortgage payment amounts, telephone numbers, email addresses and much, much more.

The FTC's complaint, filed earlier this month, charges the "mortgage spamming operation" with violating several federal laws by using an array of deceptions to con consumers into sharing their personal financial data. The complaint freezes the company's assets, but the FTC declined to state exactly how much was frozen because the amount is among evidence not yet part of the public record.

The complaint comes amid a stepped up trend by some operations to attempt to cash in on the strong real estate market by using real estate investment "deals" and low-rate mortgages as come-ons. Mortgage and real estate spam is also high on most-hated spam lists.

According to the FTC, 30 Minute Mortgage, Inc. sent spam and maintained Web sites where it advertised "3.95% 30 year mortgages" and until recently described itself as a "national mortgage lender."

RealtyTimes.com has obtained a copy of an email 30 Minute Mortgage allegedly sent to it's spam operator. In the email, 30 Minute Mortgage offers the spam operator "thousands of completed applications per month" for sale.

"If you can find mortgage lenders or broker (sic) who would be customers for these high quality leads we will work out a very lucrative arrangement with you," the email says.

30 Minute's Web site now carries a disclaimer that says "30 Minute Mortgage is an Internet-only, marketing company for the mortgage banking industry. 30 Minute Mortgage holds no state or federal licenses to engage directly in mortgage brokering or mortgage lending. For further inquiries about 30 Minute Mortgage you may call (800) 478-3838."

Company officials and counsel it retained to respond to the complaint, refused to comment for publication.

The FTC said it was aware the Web site is still operating but, declined to state if it was now operating legally.

"We are aware of the Web site. We don't know all the facts yet and can't opine on the legality," said Peggy Twohig, a spokeswoman for FTC's Bureau of Consumer Protection.

The FTC's complaint says that 30 Minute Mortgage is not a national mortgage lender and legally cannot offer a 3.95 percent 30-year loan. The loan appears too good to be true because it is.

Nevertheless, the company allegedly used the low-rate mortgage lure to urge potential customers to complete detailed online loan applications with their sensitive personal information, the FTC said.

The company allegedly sold or offered to sell thousands of completed applications to nonaffiliated third parties without consumers' consent, according to the FTC. Also, the company assured consumers that when they submitted the loan applications, their sensitive information would be protected because it would be transmitted using Secure Sockets Layer (SSL) technology.

The FTC charges that sensitive personal and financial information consumers provided was not always protected in transmission because the Web site at times did not use SSL technology or other encryption technology.

Thursday, March 27, the Web site carried the VeriSign logo and clicking the link revealed a Jan. 9, 2003 to July 9, 2003, validity period. VeriSign provides encryption technology and other security services, but it's up to the client to actually use the service, which protects consumers' information in transit during ecommerce transactions and other transmissions of sensitive data.

The FTC says the company's alleged misrepresentations violate provisions of the FTC Act barring deception. The complaint says that defendants also violated provisions of the Gramm-Leach-Bliley Act which prohibits "pretexting" -- making misrepresentations to obtain financial information. Also, the FTC says the defendants violated or were about to violate the Gramm-Leach-Bliley Act and the FTC's Privacy of Consumer Financial Information Rule by sharing application information with nonaffiliated third parties without first giving consumers notice and the right to "opt out" or disallow the company to sell their information. Finally, the FTC says offering loans without making certain, specified disclosures violates the Truth in Lending Act.

The FTC complaint names 30 Minute Mortgage, Inc., Gregory P. Roth, and Peter W. Stolz as defendants. The FTC says the defendants agreed to a preliminary injunction to stop certain acts until the complaint is heard and an outcome decided. The injunction was filed in U.S. District Court for the Southern District of Florida in Fort Lauderdale, according to the FTC.

The federal commission's members voted 5-0 in favor of filing the complaint.

Published: March 28, 2003

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.