If you are facing foreclosure, you are likely to be contacted by foreclosure rescue scammers – people and companies that try to get money from you by promising to help you avoid foreclosure. One type of “service” to avoid is the mass joinder lawsuit scam. Learn what how this scam works so you aren’t take in by it.
(To learn about other common foreclosure scams, and how to avoid them, see our Foreclosure Rescue & Other Scams topic area.)
How Does the Mass Joinder Lawsuit Scam Work?
In this type of scam, a group claiming to be a law firm (often it's not a law firm at all or it uses unqualified attorneys) sends out unsolicited mailings inviting distressed homeowners to participate in a mass joinder lawsuit. The mailing informs the homeowners that they can join together with other homeowners to sue their lender and force it into providing mass loan modifications or stopping foreclosure.
The homeowner then calls the number listed on the mailing and talks to a sales representative who provides false information or makes misleading claims about the success of such a suit. To join in the mass joinder lawsuit, the homeowner must pay upfront legal fees that can range from $5,000 to over $10,000. However, according to the Federal Trade Commission, this is often a scam.
Typically, once the scammers have taken the homeowners' money, they either:
- do nothing and disappear with the funds or
- they file the lawsuits and neglect them, leading to a dismissal.
To learn about legitimate options for avoiding foreclosure, see our Foreclosure Alternatives topic area.