Cease Directive  Mortgage Protection Services

Date:	05/20/2014
Organization:	Division of Banks
Location:	Arcadia, CA

Mortgage Protection Services, Arcadia, CA - Cease Directive

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
BANK SUPERVISION

CEASE DIRECTIVE

In the Matter of

MORTGAGE PROTECTION SERVICES
Arcadia, California

The Commissioner of Banks (Commissioner) is charged with the administration of Massachusetts General Laws chapter 167 relating to the supervision and regulation of state chartered banks and credit unions.

Pursuant to the authority granted under Massachusetts General Laws chapter 167, the Commissioner has investigated the activities of Mortgage Protection Services (Mortgage Protection Services or the entity) with a mailing address of PO Box 661028, Arcadia, California to determine if Mortgage Protection Services has engaged in the business of, and/or is continuing to engage in, acts or practices constituting violations of Massachusetts General Laws chapter 167.  Based upon such investigation, the Division of Banks (Division) hereby issues the following CEASE DIRECTIVE (Directive) as a result of the findings alleged herein.

A. FINDINGS OF FACT

1. The Commissioner is charged with the administration of Massachusetts General Laws chapter 167 relating to the supervision and regulation of state chartered banks and credit unions.
2. Mortgage Protection Services is, and at all relevant times has been a foreign corporation conducting business in Massachusetts, with a mailing address of PO Box 661028, Arcadia, California.  The Division’s review of information available through the Massachusetts Secretary of the Commonwealth's Corporations Division (Corporations Division) website indicates that Mortgage Protection Servicers is not registered as a foreign corporation with the Corporation’s Division, as required pursuant to General Laws chapter 156D section 15.03. Chapter 209 of the Acts of 2006, AN ACT RELATIVE TO THE USE OF THE NAME OF FINANCIAL INSTITUTIONS (Chapter 209) became effective October 31, 2006.  Said Chapter 209 amended section 37 of chapter 167 of the General Laws relative to unauthorized banking.
3. Massachusetts General Laws chapter 167, section 37, prohibits any person, domestic or foreign corporation, or other entity from using the name, trade name, or trademark of any bank, federal bank, federal branch, foreign bank, out-of-state bank or out-of-state branch or out-of-state federal bank or federal credit union or any subsidiary thereof, in any written or oral advertisement or solicitation for products or services, without the express written consent of the financial institution. 
4. Massachusetts General Laws chapter 167, section 37, paragraph 3 states :

   A person, domestic or foreign corporation, partnership, association, limited liability company or similar entity shall not make reference to an existing bank… without the express written consent of the bank…or make reference to a loan number, loan amount or other specific loan information on the outside of an envelope, visible through the envelope window, or on a postcard in connection with any written solicitation or an email for products or services to a specifically identified consumer.

5. Massachusetts General Laws chapter 167, section 37, paragraph 4 states in part:

   A person, domestic or foreign corporation, partnership, association, limited liability company, or similar entity shall not include a loan number, loan amount or other specific loan information relative to a specifically identified consumer that is publicly available in a written or oral solicitation for the purchase of products or services unless the solicitation clearly and conspicuously states in bold-face type on the front page of the correspondence that the person, domestic or foreign corporation, partnership, association, limited liability company or similar entity is not sponsored by or affiliated with and that the solicitation is not authorized by the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank as defined in section 1, or federal credit union as defined in section 1 of chapter 171, or any subsidiary thereof. The statement shall include the name, address and the telephone number of the person making the solicitation and that any loan information referenced was not provided by the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank or federal credit union, or any subsidiary thereof.  The statements required in this paragraph shall also be given at the time of any oral solicitation to a specifically identified consumer.

6. Massachusetts General Laws chapter 167, section 37, paragraph 5 states in part:

   A person, domestic or foreign corporation, partnership, association, limited liability company, association or similar entity, which is considered to have violated this section, shall be considered to have engaged in an unfair and deceptive practice and shall be a violation of chapter 93A.

7. On January 10, 2014, the Division’s Consumer Assistance Unit received a consumer complaint against Mortgage Protection Services regarding the entity’s solicitation sent to a Massachusetts consumer.
8. Upon review of the solicitation sent to the consumer, the Division discovered that the envelope contained the words “Important Documents Enclosed,” and through the window of the envelope was the consumer’s name, address, and name of the bank where the consumer recently obtained a mortgage.  Also viewable through the envelope window was the phrase “Return Promptly.”
9. The envelope contained a bright yellow card which was named “Mortgage Data Card.”  In addition to the information visible through the window and referenced in paragraph 9, the card also contained the consumer’s mortgage amount and the mortgage closing date.  The card also requested the consumer and spouse’s date of birth, home phone number, cell phone number, whether or not the consumers smoked tobacco and the best time to call.  At the bottom of the card in larger font and all capital letter was “Return Promptly- Simply Mail this Card.”
10. Upon further review of the Mortgage Data Card, it was noted that in smaller font at the bottom of the card was the phrase “Not affiliated with any lending institution.”
11. Also included in the solicitation by Mortgage Protection Services was a card which was titled, “Notice of Offering, Mortgage Free Home Protection.”
12. The last enclosed document in the solicitation was a return envelope addressed to Mortgage Protection Services at their mailing address in Arcadia, California.
13. On February 10, 2014, the Massachusetts consumer contacted the Division a second time and indicated that Mortgage Protection Services had sent the consumer a second solicitation that contained the same outer envelope, return envelope, and notice of offering as in the first mailing as referenced in paragraph 9 of this Directive.  The second mailing's mortgage data card identified the document as a "Second Notice". 
14. Based upon information and belief, the bank referenced in the solicitation to the consumer did not give Mortgage Protection Services the authorization to use its name.
15. Based on the information detailed in paragraphs 5 through 15 of this Directive, Mortgage Protection Services continues to mail out solicitations in violation of General Laws chapter 167, section 37 and Massachusetts General Laws chapter 93A.

    B. CEASE DIRECTIVE

16. Mortgage Protection Services shall immediately cease from making use of or circulating any solicitation having thereon any name or other words indicating that such business is that of a savings bank, co-operative bank, savings and loan association, credit union, trust company or banking company.
17. Mortgage Protection Services shall immediately cease from using the name, trade name, or trademark of any bank in any written or oral advertisement or solicitation for products or services without the express written consent of the financial institution.
18. Mortgage Protection Services shall immediately cease from making reference to an existing bank without the express written consent of the bank or make reference to a loan number, loan amount or other specific loan information on the outside of an envelope, visible through the envelope window or on a postcard in connection with any written solicitation or an email for products or services to a specifically identified consumer.
19. Mortgage Protection Services shall immediately cease from including a loan number, loan amount or other specific loan information relative to a specifically identified consumer that is publicly available in a written or oral solicitation for the purchase of products or services unless the solicitation clearly and conspicuously states in bold-face type on the front page of the correspondence that the person, domestic or foreign corporation, partnership, association, limited liability company or similar entity is not sponsored by or affiliated with and that the solicitation is not authorized by the bank, federal bank, federal branch, foreign bank, out-of-state bank, out-of-state branch, out-of-state federal bank as defined in section 1, of General Laws chapter 167 or a federal credit union as defined in section 1 of General Laws chapter 171, or any subsidiary thereof.
20. Mortgage Protection Services is directed to notify all members of its staff and anyone acting on its behalf, aware of the provisions of Massachusetts General Laws chapter 167, section 37.
21. Mortgage Protection Services must submit a response within five (5) days of receipt of this Directive.  The response submitted by Mortgage Protection Services must also include a signed copy of the enclosed affidavit, attesting that Mortgage Protection Services will immediately cease from engaging in the business of an unauthorized bank.

BY ORDER AND DIRECTION OF THE COMMISSIONER OF BANKS.

Dated at Boston, Massachusetts, this 20th day of May, 2014

David J. Cotney
Commissioner of Banks
Commonwealth of Massachusetts