At the request of the Federal Trade Commission, the defendants in a mortgage relief scam have been banned from the mortgage loan modification and debt relief business.

As part of a federal-state enforcement sweep dubbed Operation Mis-Modification, the agency filed suit against the Jacksonville, Florida-based operation in 2014, charging two principals and their companies with falsely promising financially distressed homeowners that they would provide legal representation to prevent foreclosure proceedings or lower their mortgage payments and interest rates.

The defendants—who typically told consumers their odds of getting a modification were 85 to 100 percent—illegally charged advance fees for their promises, the FTC said, in some cases an ongoing monthly fee of $300 or more and in other instances, a flat fee of up to $4,000. Some consumers were instructed not to pay their mortgage while the supposed modification was pending.

Some of the defendants reached a deal with the FTC that banned them from selling secured and unsecured debt relief products or services, from violating the Do Not Call Registry rules, and from misrepresenting any financial products or services. An $8 million judgment against these defendants was suspended upon the surrender of certain assets.

The Florida federal court overseeing the case also granted the FTC's motion for summary judgment against the remaining defendants. It found violations of both the FTC Act and the Mortgage Assistance Relief Services Rule. The defendants made "numerous" misrepresentations to consumers, with many customers stating that although they believed a lawyer was working on their case, they never spoke with one or received anything to suggest a lawyer had done any work for them, the court said. Some consumers who contacted their lenders directly were told that the defendants never submitted any paperwork while others stopped hearing from the defendants after they paid them.

The summary judgment ruling imposed a permanent order under the same terms as the consent agreement and a $13.5 million judgment. The final order also prohibited the defendants from profiting from customers' personal information and failing to properly dispose of the data.

To read the complaint and the orders in FTC v. Lanier Law, click here.

Why it matters: In the wake of the financial crisis, the FTC focused its attention on mortgage scams including Operation Mis-Modification, where the agency worked together with the Consumer Financial Protection Bureau and Attorneys General from 15 states. That joint enforcement sweep included the action against the Lanier Law defendants and 32 similar actions for violations of the FTC Act and the Mortgage Assistance Relief Services Rule, which bans mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that is deemed acceptable.