Don't Fall For Mortgage Infomercials Masquerading As "News Networks"

Reader Brian says he saw the above pictured infomercial on CNBC this Sunday, and is wondering how they get away with such a “blatant attempt to take advantage of those same mortgage consumers who where hoodwinked in the first place.”

We took a look at the infomercial and it’s just about as shady as it could possibly be. It opens with a fake news report about the Housing and Economic Recovery Act of 2008, then slowly transitions into a sales pitch for “FHA loans.” The anchor even stages a fake interview with the mortgage company pitchman. He’s introduced as an “expert.”

“Joining us to offer his expert advice and insight into all of this…,” says the fake anchor from the “MLN Studio,” while the screen is festooned with the same kind of tickers and gizmos that you’d expect to find on CNBC.

And what does the mortgage pitchman suggest that you do with your “FHA loan?” Whatever! Pay for “college tuition, home improvement, start a savings plan… Anything you want!” How much can you borrow? “97.75% of your home’s value!”

The infomercial then instructs consumers to call what seems vaguely like an official government information “hotline,” but which doesn’t go to the FHA at all. Sophisticated consumers won’t be fooled, of course, but we suspect that the lender isn’t targeting them with this advertisement.

If you are actually in need and want to take advantage of the new FHA-Secure program, click here. HUD will help you find an approved lender and a HUD-approved counselor to answer your questions about the program.

If you’d like more information about the FHA and how they can help you refinance your home and avoid foreclosure, call HUD at: 1-800-CALL-FHA, 1-800-225-5342.

Federal Housing Administration

UPDATE: Commenter Triborough points out that the shadiness of this infomercial is compounded by the fact that the fake “anchor” is a real working reporter for WCBS radio who used to be a substitute tv news anchor at NBC4 in New York.

Comments

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  1. pine22 says:

    seems mildly illegal

  2. chiieddy says:

    @pine22: mildly?!

  3. Angryrider says:

    How can I? I see this crap all the time during the weekend when the affiliates don’t have anything good to air, even though they’ve got hundreds of syndicated sitcoms.

    People who fall for it are unfit to make any purchase.

  4. Canino says:

    Smthng n TV sn’t rl? Shmn!

  5. donopolis says:

    This sort of thing is just skeezy. Ads should not be masquerading as news. I also think that any network and or cable company that accepts money to play these ads should be held responsible as well.

    I thought CNBC was a 24 hour news network…what gives?

    Donopolis

  6. Kaitydid says:

    i always thought it was shady when i would hear those ads on the radio that pretend to be a dj, starting with “back to the music in a moment” and complete with rustling paper sound effects while he talks about this hot new make money on the internet craze, but this is about a basquillion times shadier.

  7. I’ve actually gotten at least one phone call personally on this, and my wife has gotten one that I know of. These scammers are out there, and seriously gunning for peoples money (what they have left).

    It’s just so sad to me that these things can make it onto cable TV when they are so obviously fake.

  8. Oh, and just an FYI … my wife, and I purchased a home within our means, and on a FIXED 30 year mortgage. So we’re definitely not in the target audience for these sleaze balls, but they still call occasionally.

  9. ryno365 says:

    pathetic

  10. spoco says:

    This is the next step in those newspaper and magazine ads that look like newspaper and magazine stories.

  11. GMFish says:

    A fool and his (or her) money are soon parted.

  12. Triborough says:

    To make things even worse, one of the “anchors” of the faux newscast (not to be confused with Fox News) is former WNBC reporter Joe Avellar, who was ironically let go in some of NBC-Universal’s budget cuts.

    The use of an actual reporter, which has been done before in other infomercials, and calling it a “Special Report” makes things really dubious. These are also airing locally, too mainly on the stations of the former PAX network.

    I remember veteran newsman Hugh Downs pretending to be a journalist on a fake newscast/magazine show for some alleged health product system. That was slightly less worse.

  13. evslin says:

    @Kaitydid: I’ve been hearing those a lot recently too.

  14. harlock_JDS says:

    @chiieddy:

    exactly what is illegal about it? I’m sure it’s preceded and ended by a ‘this is a paid advertisement’ disclaimers.

    what laws are being violated?

  15. Diet-Orange-Soda says:

    @harlock_JDS: Probably none, which is why it’s on TV in the first place. (Still sleazy.)

  16. harlock_JDS says:

    @Diet-Orange-Soda: agreed it’s sleazy (but then so are the companies doing this) but i hate to see illegal batted around when clearly it’s not.

    Honestly I’d worry more about actual news stories that are nothing more than advertisements than these infomercials.

  17. Triborough says:

    @harlock_JDS: Those disclaimers don’t do much good if you tune in late or turn away before it is over.

  18. mike says:

    @donopolis: This is been going on for a while. If only there were some book that addresses this issue…

    What I find MORE appalling is that CNBC actually aired the commericial. Of people really think this is a CNBC news show, CNBC could be liable.

  19. backbroken says:

    Are you sure this is fake? Next thing you are going to tell me is that not everything Sean Hannity says is true.

  20. TechnoDestructo says:

    @donopolis:

    Ads have been masquerading as news in magazines and newspapers for years.

  21. Kaitydid says:

    @evslin: are you from Boston? I’ve been hearing them all over the local alternative station that’s not owned by Clear Channel. I think they used to be mostly the purview of AM radio, but this station isn’t mega rich.

  22. dragonfire81 says:

    This is a commonly used marketing trick just taken to the next level. It’s shady and scummy but it’s not illegal.

  23. aikoto says:

    @Angryrider: Stop blaming the victim.

  24. evslin says:

    @Kaitydid: Nope, Omaha – the station I listen to is operated by NRG Media.

  25. emilymarion333 says:

    I saw this on TV the other morning. I was very surprised that it was on TV. I can see how it could be convincing for some people…

  26. harlock_JDS says:

    @Triborough: No but people shouldn’t make critical financial choices based on a snippet of something they saw on tv.

    People assume that other people are stupid, I doubt many people see a moment of this on the news and immediately rush to the phone and call them.

  27. splendic says:

    CNBC does not show much original programming on the weekends, due to the markets being closed, and subsequently there not being much to report on.

    I’d hope to God people watching a business news channel would be smart enough to avoid believing ridiculous financial ads like these.

    And obviously, news network or not, every station will air virtually any ad that can pass by the FCC.

  28. @Kaitydid: Yeah, I hear that one all the time for some “Sell crap on eBay and be rich” schemes.

    Another radio ad I’ve started hearing tries to sound like some public government announcement… by actually starting off by saying, in a commanding voice, “ATTENTION: This is a public announcement!” It then goes on to talk about foreclosed homes and how the “government and banks” are highly motivated to sell at deep discount prices.

    Then, the commanding voice gives a phone number and says “Any member of the public who’s last name starts with ‘A’ through ‘N’ can start calling now. Anyone with a last name that starts with ‘O’ through ‘Z’ can start calling tomorrow at 9am.” The stupid thing is, I hear this ad every friggin’ day!

  29. bohemian says:

    We saw the exact same commercial. The pretending to be news thing might not be illegal but I’m pretty sure pretending to be a federal agency is. The company in the commercial is posing as a federal agency IE: giving out a phone number that supposedly goes to a federal agency when it goes to their offices.

  30. Notsewfast says:

    @donopolis:
    Nah, MSNBC is 24 hour news, CNBC covers the financial markets and is pretty much out of commission news-wise from about 7pm EST until 3 or 4 in the morning.

  31. harlock_JDS says:

    @LastVigilante:

    I like the ones that say ‘all those with an income under 100K call today over 100K call tomorrow.”

  32. betatron says:

    @harlock_JDS: In a print ad, a singular disclaimer (or two) is sufficient since it is continuously visible while reading the ad. In feature length newsomercials, it is totally possible to be exposed to the entire sales pitch two or three times, along with contact info and never see the disclaimer wrappers.

    Which is why these things are made the way they are. The radio stations do this too. Listen to Making Money with Joe Aldeguer on WLS (chicago). Sounds like money making advice, but it’s really a paid advertisement.

    There should be an ear-splitting BEEEEEEP every 4 seconds embedded in to the audio tracks of these things.

  33. Xerloq says:

    Fool me once, shame on you. Fool me twice, shame on me.

  34. Meggers says:

    @Kaitydid: basquillion is now my new favorite number. Thanks.

    Not sure if anyone knows this but does a network preview the ads before they run? If so, Why would they ever approve this commercial?

  35. Frank_Trapasso says:

    If fool me…won’t get fooled again.

    I see these all the time, and they’re not just limited to private companies – the federal government commissions video news releases that are distributed across the country. They’re very popular with increasingly short-staffed newsrooms.

  36. Preyfar says:

    @emilymarion333:
    I’ve seen similar infomercials which disguised themselves as early morning talk shows, much in the manner of “the View”. One I recall right off was a faux-interview staged with “best-selling author Kevin Trudeau” talking about his new “get out of debt” book.

    I woke up from a deep sleep while it was playing. It was set up in such a way it was hard to identify as an infomercial from first glance. Sadly, I have to admit I somewhat bought into it for a few minutes until I noticed that Mr. Trudeau never stopped talking, never giving the women a chance to speak. My scamdar kicked into full gear and I realized what it was.

    It’s definitely sleezy stuff.

  37. drjayphd says:

    At least the Topdot ads of this ilk are kind enough to only last 30 seconds, so you know there’s no friggin’ way they could be real. That said, these sorts of ads (on TV, in papers, etc) are unspeakably slimy and the last vestige of products that can’t sell themselves on their own merits. Sounds kinda like Kevin Trudeau, hmm, Preyfar? :)

  38. picardia says:

    @Meggers: The networks seem to have time to review/reject ads for condoms (because they actually say what condoms are for) or even for churches that proclaim they welcome gay couples (horror!) Somebody at CNBC reviewed this and took the cash, which is why they suck.

  39. Etoiles says:

    @Meggers: Not sure if anyone knows this but does a network preview the ads before they run? If so, Why would they ever approve this commercial?

    Yes, sort of.

    Disclaimer: I have immediate family who work / have worked for radio stations and cable television networks, and from what they tell / have told me, it varies from station to station and network to network.

    If it’s national, network-based ad time, then the Ad Sales folks bring it in, then the ad gets passed along the until it ends up with the on-air programming / control folks in the “chain” and goes through master control and broadcasts. There are a lot of points there where a particularly egregious ad can get spotted and pulled, but as far as I can gather it’s extremely rare for one to be replaced unless it’s the wrong duration: i.e., a 60 second ad for a 15 second break.

    (You will see an ad pulled when, say, it’s a Delta airlines ad airing during the 6:00 news, and the lead story on the broadcast is that a Delta plane has crashed horrifically onto an orphanage, or some such. Though those ads that should be pulled sometimes get missed, too.)

    However, there are also chunks of ad time that go through the cable or satellite operator rather than through the network. A lot of infomercials fall into the latter category — the network says, “Here’s this half-hour of something we don’t want to be dead air; let’s bundle it off through affiliate sales and then they can do more or less whatever they want with it.” If there’s something objectionable or faulty aired during an affiliate break, a complaint to the network won’t do anything about it. (Though obviously the distributors don’t want to piss off the major networks.) The party to complain to in that case would be the cable company. And we all know how receptive they are, right?

  40. Meggers says:

    Thanks Picardia and EtoilePB. I was just wondering how this sort of thing could make it on air.

  41. TomCruisesTesticles says:

    Social filter. Who just ignores it and skips to the next thing and who calls. Former-pass. Latter-dumb dumb dumb dumb dumb

  42. Triborough says:

    @harlock_JDS: But they wouldn’t be putting it on if it didn’t work.

  43. ludwigk says:

    So wait: This advertisement suggests *borrowing* money to start *saving* it? That’s kind of brazen of them.

    So instead of, say putting $xx from each paycheck into savings, I should get a loan and save that? Genius!

  44. Mariajl says:

    While the intent is obviously deceptive — especially with the real new anchor in use — I find it hard to believe so many people don’t know what they are watching after more than a minute.
    The ads are so scripted, and the readings of the lines and camera changes so choreographed and stilted, that it is obvious (to me, at least) that it isn’t a real report.

  45. Marshfield says:

    @ludwigk:
    This advertisement suggests *borrowing* money to start *saving* it? That’s kind of brazen of them

    Well, if you loan is due to adjust up and you can fix it at a lower rate, you could refi the loan and have monthly money left over.

  46. morganlh85 says:

    I REALLY love when the say “Interested parties whose last name begins with A-M may call today. Parties whose last name starts with N-Z may call starting tomorrow!” Yeah, right.

  47. morganlh85 says:

    I know ad money is important to networks, but they should stop short of using ads that deliberately attempt to trick consumers by using a “news interview” format on a NEWS station.

  48. sonneillon says:

    It’s a good idea in terms of marketing, but I don’t think many networks are silly enough to put these ads during prime time news. When they interrupt the Simpson’s with a special report telling me I can refinance my mortgage I am suspicious.

  49. shufflemoomin says:

    When I ever I watch TV while visiting North America, I was amused by the fact that they have infomercials for fitness equipment and things and have a disclaimer on the screen saying it’s an advertisement when any idiot should know that, but something this misleading is allowed? Who’s in charge of stuff like this?

  50. smint says:

    If you’re dumb enough to think this is real, you’re going to lose your money somehow, if not to this than something else. Maybe at a Check N Go or something.

  51. Nofsdad says:

    @Xerloq:
    So THAT’S what he was trying to say!

  52. Meathamper says:

    Scam central…on cable.

  53. bubbledumpster says:

    I’m sorry. Are we supposed to feel bad for the stupid?

  54. kahri says:

    To all saying that whoever falls for this deserves it: You or I may not fall for it, but what about our Senior Citizens? Or anyone not actively looking for signs of a scam?
    Look, I know ignorance is no excuse even in federal court, but when it comes to federal programs people shouldn’t have to worry about being scammed.

  55. GamblesAC2 says:

    I’ve seen ads like this before most of them are noticeably fake. one in particular comes to mind it involves Paxil.

  56. kahri says:

    @LastVigilante: next time you see an ad with “if your name starts with ‘A’ to ‘N’ call today..”
    call and then halfway through your sale, interrupt and say “oh, never mind, my last name is Smith so I guess I’ll try tomorrow, thanks”. Then laugh at the excuses for why they’re able to take your order today.

  57. yso says:

    @pine22:

    not necessarily “illegal” but immoral to be sure.

  58. crankymediaguy says:

    “i always thought it was shady when i would hear those ads on the radio that pretend to be a dj, starting with “back to the music in a moment” and complete with rustling paper sound effects while he talks about this hot new make money on the internet craze”

    What always made me laugh about that ad is that I heard it about a Brazilian times on TALK radio. Back to the music? I don’t think so.