Reverse Mortgage Lender Sues Over Alleged Deceptive Marketing

A reverse mortgage lender recently filed a complaint for a preliminary injunction and jury trial in the U.S. District Court for the Southern District of California against another reverse mortgage lender, alleging that the defendant lender has been maintaining websites containing deceptive information in violation of RESPA as well as marketing guidance from the FTC.

According to the allegations in the complaint, “the site publishes false and misleading ‘ratings’ of reverse mortgage providers that score [defendants] far higher than its competitors based on factual misrepresentations and highly skewed rating criteria.”  Further, the complaint alleges defendants also operate a website purporting to offer educational tools regarding retirement savings; however, as alleged, the retirement website offers no real products related to retirement savings and only features materials that are intended to funnel consumers to the defendants.

It is this alleged funneling that forms the basis of the reverse mortgage lender’s claim that these websites violate FTC guidance, citing a 2023 advisory opinion highlighting that mortgage comparison websites providing, “enhanced placement or otherwise steers consumers to certain operators” may violate RESPA Section 8.