Prime Legal Plans Restitution Checks are in the Mail, FTC Says

The Federal Trade Commission says the last round of refund checks are on the way to debtors affected by a Prime Legal Plans mortgage scheme.

The FTC says this last of three rounds of refund mailings will deliver more than 4,200 checks totaling over $200,000 to persons who were taken in by a scheme conducted by defendant Prime Legal Plans LLC. The total payments to consumers under the Prime Legal Plans settlement will be nearly $4 million.

The FTC initiated this enforcement action against Prime Legal Plans in 2012. Sometimes using the names Reaching U Network and American Legal Plans, the defendant allegedly made false promises that it could help mortgage debtors save their homes from foreclosure or lower their monthly mortgage payments.

According to the FTC, Prime Legal Plans falsely represented itself as a “private charity working for struggling consumers that can’t afford legal representation.”

Under the names Reaching U Network and American Legal Plans, the company allegedly told debtors that they could have an attorney review their mortgage for compliance with state and federal mortgage laws. The company would then use the results of that “forensic audit” to negotiate more favorable terms for the debtor.

Prime Legal Plans then allegedly charged the debtors thousands of dollars up front and up to $750 per month, while doing little or nothing to help them with their mortgage.

The FTC argued that the Prime Legal Plans scam violated the Federal Trade Commission Act and the Mortgage Assistance Relief Services Rule, or MARS Rule. Promulgated in November 2010, the MARS Rule is an administrative rule that prohibits foreclosure rescue and loan modification services from collecting fees until the debtor has a written offer in hand from their lender or service that the debtor deems acceptable.

Prime Legal Plans allegedly violated these and other applicable laws by failing to provide required disclosures, collecting up-front fees, and misrepresenting the results debtors could reasonably expect. The FTC also accused the company of cold-calling consumers who were listed on the Do Not Call Registry.

Not long after the FTC filed this enforcement action in federal court, the judge granted the FTC’s request for a temporary restraining order against Prime Legal Plans. The court also froze the company’s assets and put them under control of an appointed receiver.

The FTC announced the current settlement agreement with Prime Legal Plans in January 2014. In addition to paying restitution to affected debtors, Prime Legal Plans was ordered to surrender its assets and be permanently banned from offering mortgage relief and other debt relief services to consumers.

The FTC has sent out two previous rounds of refunds related to the Prime Legal Plans/Reaching U Network scheme. One round of checks went out in March 2014, and the second round was mailed in October 2015.

On average, consumers who get all three checks will get a total payment of $852, according to the FTC.

Checks are being disbursed by a private administrator that contracts with the FTC. The FTC reminds consumers that it will never ask them to provide money or information before a refund check can be cashed. Such a solicitation may be a mark of a possible scam. Consumers with questions regarding this case may call 877-374-2830.