The Consumer Financial Protection Bureau filed a complaint and proposed consent order alleging that American Advisors Group used “inflated and deceptive” home estimates to get consumers into taking out reverse mortgages.
If entered by the court, the proposed consent order would require the Irvine, Calif.-based company to pay $173,400 in consumer redress and a $1.1 million civil money penalty.
The CFPB alleges that AAG violated the Consumer Financial Protection Act of 2010’s prohibition on deceptive acts and practices by inflating home values and misrepresenting the accuracy of home estimates. The CFPB also alleges that AAG’s deceptive conduct violated a 2016 administrative consent order that addressed the company’s previous deceptive advertising of reverse mortgages.
The company misled consumers with inaccurately high home value estimates to “entice them to enter into negotiations to open a reverse mortgage,” the bureau said. And, while AAG’s marketing materials claimed it “makes every attempt to ensure the home value information provided is reliable,” the company didn’t actually do this, according to the CFPB complaint.
“American Advisors Group violated consumers’ trust by advertising reverse mortgages with inflated and deceptive home-value estimates,” said David Uejio, acting CFPB director at the time. “The CFPB will act decisively when we uncover consumer harm or practices that seek to take advantage of vulnerable populations.”
The proposed consent order against AAG has been filed with the U.S. District Court for the Central District of California and would be effective only if entered by the court.