Ameriquest Mortgage Illegal Purchase of Consumer Credit Reports for Target Marketing and Privacy Law Violations
After declining the mortgage application for *any* amount, Ameriquest Mortgage Company sent the “pre-qualification” letter based on credit information – indicating that it targeted consumers with poor credit ratings and/or high credit card debts rather than complying with the FCRA requirement to obtain credit report data only for consumers who will receive “FIRM” offers of credit.
January 10, 2005 — After receiving unlawful e-mail spam leading to Ameriquest and its subsequent decline of the mortgage application for any amount with an entirely false reason, Christine Baker named Ameriquest in her federal suit, filed on 6/9/04 in Phoenix, AZ, case # CIV-04-1192-PCT-NVW.
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Jeffrey Messing, the Ameriquest attorney with Poli & Ball in Phoenix, claimed that no lender would approve a mortgage for Ms. Baker because she is self-employed and she can not provide W-2s and pay stubs.
Mr. Messing admitted that Ameriquest purchased mortgage leads from Panda Management, a Nevada corporation doing business as Lead Jungle and owned by Anthony Ferlanti, a known spammer. According to MaximumCash, a porn marketing website, Mr. Ferlanti had been terminated for violating its anti-spam policy in 12/2001 and details are at http://fight-back.us/forum/index.php?showtopic=122
On 12/10/04, Ms. Baker amended her complaint to name Mr. Ferlanti and Panda Management and she added a violation of the Gramm-Leach-Bliley Act. After Ameriquest had obtained Ms. Baker’s credit reports in April 2004, its loan agent Beatrice provided Ms. Baker’s information to another mortgage broker, probably expecting a referral fee.
The Gramm-Leach-Bliley Act requires the consumer’s permission prior to providing financial data to 3rd parties, as explained at http://www.ftc.gov/privacy/ Attorney Messing argued in his motion to dismiss that the Act does not allow consumers to sue for violations and that only the FTC can enforce it. Apparently Ameriquest does not feel that it needs to comply with laws unlikely to be enforced.
Shortly after amending her complaint, Ms. Baker received a mailing from Ameriquest:
“We’ve already pre-qualified you for The No-Stress Home Loan. To find out how much you qualify for, call us now at (888) 765-8574 or go to www.ameriquestloans.com.”
In the small print on the back of the letter, Ameriquest disclosed:
This offer is extended because you appear to satisfy certain credit criteria derived from information contained in a pre-qualifying report received from a credit reporting agency used by us.”
Edelman, Combs, Latturner & Goodwin, Illinois consumer protection and class action attorneys, represent a consumer in a similar case, Cole v. U.S. Capital, Inc., et al., No. 03-3331 (7th Cir.) They argue that the credit data was obtained under false pretenses and that the pre-approval was a sham. A case summary is posted at http://www.edcombs.com/CM/News/News302.asp
The case had been dismissed by the district court and on request of the appeals court, the FTC submitted its Amicus Brief in support of the plaintiff, posted at http://www.ftc.gov/os/caselist/colevuscapitalinc/040422amicbrfcolevuscapitalinc.pdf and the FTC press release is at http://www.ftc.gov/opa/2004/04/fyi0427.htm In November 2004, the 7th Circuit Court of Appeals reinstated the lawsuit.
The Ameriquest conditions for approval, disclosed in the small print of its “pre-qualification” letter, establish that there is no firm offer of credit. Ms. Baker believes that Ameriquest is liable for $1,000 in statutory damages for each credit report obtained without permissible purpose as defined by the FCRA.
When creditors purchase the consumer data from CRAs for promotional offers, they specify the desired criteria. Rather than targeting consumers with good credit, Ameriquest targets consumers with bad credit or low credit scores and/or high credit card debts.
Attorney Messing’s filings establish that Ameriquest deliberately engages in unfair and deceptive practices as he had no excuses or explanations for the lies, incompetence and even perjury by its employees. To date, Ms. Baker has not received an apology or the promised credit reports from Ameriquest.
The Phoenix Better Business Bureau website states that it revoked Ameriquest’s membership on 5/20/04 due to its failure to respond to complaints and due to an unsatisfactory report with the BBB in Orange, California, where Ameriquest is headquartered.
Most consumer complaints involve misrepresentations about the interest rates, points and proceeds or unexplained delays and absurd requests for additional documentation. Often the loan documents did not represent what consumers had been promised.
The disadvantaged, home owners with credit and financial problems and especially the elderly and ill will most likely accept higher rates and fees at closing – they have no alternatives and they count on the checks from the refinance to pay their bills. Those are also the victims who can not afford to hire attorneys.
Unfortunately, Ms. Baker cannot assist consumers as she is not an attorney. Due to her lack of legal skills and funds, it is unlikely that she will prevail in court and she will focus on filing and publicizing complaints with regulators and licensing agencies.
Class actions have been filed against Ameriquest for engaging in unfair and deceptive practices, but it is frustrating to see the wheels of justice move in slow motion and usually the actions are limited to consumers residing in the state where the suit was filed.
Ameriquest attorney Messing and PR representative Joan Gladstone ignored Ms. Baker’s request for comments to be included in this release.
Ms. Baker maintains http://ameriquest-mortgage-incompetence.info, http://bayhouse.com, http://creditforum.org/ and http://creditfactors.com/. The 2005 Credit Suit blog with updates about credit litigation, regulatory complaints, legislative efforts and credit news is published at http://creditsuit.org/. The Fight Back!!! Forum at http://www.fight-back.us/forum/ contains screenshots and audio files documenting Ameriquest, CRA and creditor misrepresentations and illegal activities as well as efforts to get regulators and legislators to enforce consumer protection legislation.
Attorney for Ameriquest Mortgage Company:
Poli & Ball, P.L.C.
Public Relations for Ameriquest Mortgage Company:
President and CEO
949-475-6979 x 204