Reverse mortgage firm – represented by TV’s Tom Selleck – faces $1.1 million penalty for alleged deceptive acts

A $1.1 million penalty would be paid by a California firm for taking allegedly deceptive acts aimed at older homeowners under a proposed order issued late Friday by the federal consumer financial protection agency.

The Consumer Financial Protection Bureau (CFPB) said it had filed a complaint and proposed consent order against American Advisors Group (AAG) for using “inflated and deceptive home estimates to lure consumers into taking out reverse mortgages.”

The CFPB also alleged that the firm’s deceptive conduct violated a 2016 administrative consent order that addressed AAG’s deceptive advertising of reverse mortgages.

The bureau noted that if entered by the court, the proposed consent order would prohibit AAG from future unlawful conduct and require AAG to pay $173,400 in consumer redress and a $1.1 million civil money penalty.

The agency described AAG as one of the nation’s leading providers of reverse mortgages. The company, since 2016, has employed actor Tom Selleck as its national spokesperson. The actor appears in TV ads broadcast nationally in which he personally endorses the firm’s products.

The firm, according to the bureau, violated federal law’s prohibition on deceptive acts and practices in three areas: by deceptively inflating home values; by making deceptive representations about the accuracy of home estimates; and by violating the 2016 consent order, which prohibited AAG from violating the CFPA for five years, or until December.

In addition to the penalty and the consumer redress, the proposed order also prohibits AAG to from engaging in deceptive practices and must cease misrepresenting estimated home values to consumers. The firm would also be required to refer its customers and prospective customers to specific CFPB materials about reverse mortgages.

CFPB Takes Action Against American Advisors Group for Deceptively Marketing Reverse Mortgages to Consumers

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