By: Mark Fitzgerald
A mortgage loan scam that uses classified ads in small newspapers victimizes the paper as well as readers, say law enforcement authorities in the United States and Canada.
The con uses the name, and sometimes even the logo, of the well-known home mortgage and equity lender ditech.com, a business of GMAC Mortgage Corporation. Scammers take out classified ads that promise loans to those with poor credit histories. Readers who respond are told they have been accepted for a loan but must send an advance fee. The victims never receive a loan, and never get their deposit back.
Newspapers are victims of the scam, too, says Chicago-based U.S. Postal Inspector Mike Hartman. “Once they get the ad going, they keep [repeating] it, and then change their names every 60 to 90 days ? which coincides with how long it takes the newspaper to find out that the credit card they used is illegitimate,” Hartman says.
Ditech itself discovered the scam when it started getting overdue billing invoices from newspapers in the summer of last year, says Rick Gillespie, chief marketing officer for GMAC Mortgage Corporation. “It started as a trickle, just a few invoices, then it became a more significant flow,” he says. The bills usually amounted to less than $100 each, “a couple of lines of classifieds,” Gillespie says. Soon, though, bills for display ads began to arrive. The Ditech con is run mostly by crime groups in Toronto, who use mobile technology ? cell phones, portable faxes and laptops ? to stay ahead of the cops.
E&P’s efforts to get papers to talk about the fraud were unavailing. One group executive who managed to discover the fraud before any papers in the chain actually ran the ads first agreed to talk, then suddenly backed off, cautioned apparently by higher-ups. There’s a pattern to the newspapers, Hartman says: “Most are not big-city newspapers in my experience. They like to use smaller papers,” even shoppers.