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When you take out a mortgage in the US, the loan information (name of borrower, lender, size of loan, address, loan ID) is public. There are companies that crawl these databases, and use the information to construct a predatory advertising letter that looks like a letter from your bank saying you're behind on something with your loan.

For those unfamiliar, in truth the fine print of the letter will admit they have nothing to do with the loan and are a random third party company using public data. Usually, these companies sell "mortgage protection insurance", which is their obfuscated name for a life insurance policy with ridiculously high premiums (compared to normal life insurance) where the payout can only be used towards the mortgage. They like to use the acronym MPI, which sounds like PMI, a legitimate mortgage related insurance which is sometimes required to maintain mortgages. The PMI, unlike MPI, is required for many mortgages to protect the bank from risk when the borrower has low income or little funds for down payment. You would be a fool to buy this "mortgage protection insurance" for the advertised purpose of "letting your family keep the house if you died" because there are vastly superior options for ensuring this.

These letters are unsolicited and there is not an obvious way to opt out of them. Does this not constitute a form of illegal unsolicited advertising? How do the MPI companies manage to legally engage in this sort of advertising?

Note: You can leave out advise for how to stop the spam. I'm not asking how to stop it. I'm just curious whether this is actually legal or not.

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  • Please clarify whether you are talking about postal mail or email (or something else). Oct 4, 2023 at 2:36
  • Looks like CAN SPAM doesn't apply, but I'm assuming there is some law that forbids unsolicited advertisement snail mail and/or requires ability to opt out. I edited the question. If there is no such law, I will accept that as an answer. Oct 4, 2023 at 3:42

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The CAN SPAM Act regulates email. It sounds like you are describing a physical letter. Companies are generally allowed to send all the commercial solicitations they'd like via physical mail. Since they are charged per piece of mail they send, you don't have the same issues that you do with electronic junk mail where individuals get thousands or tens of thousands of solicitations a day.

If you are dealing with physical letters, you'd want to look at the consumer protection laws in your state. Broadly, every state is going to have laws against unfair, deceptive, or abusive practices (UDAP). The question, though, is whether the regulators agree that these solicitations are unfair or deceptive as opposed to normal marketing puffery. You could certainly report the companies to your state attorney general and/or the Consumer Financial Protection Board (CFPB) and see if either was interested in bringing a case.

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  • 39 USC 3008 is a fun way to go. If you submit to the USPS a declaration that you, in your sole discretion, find mortgage protection insurance to be "erotically arousing or sexually provocative", you can have the sender slapped with a legally enforceable order prohibiting them from sending you any further such letters. It's probably not the most common of fetishes, but it might be a useful one to nurture in this case... Oct 4, 2023 at 2:43
  • @NateEldredge That is widely quoted on the internet, but it doesn't seem to work. When I tried (for a separate matter) USPS sent back a rejection saying either that it's obviously not sexual or that it doesn't apply for prepaid postage (I forget which). The reply is by snail mail after months, and there is no real avenue to tell them tall tales about bizarre fetishes. Oct 4, 2023 at 3:48
  • Anyways, it's moot. I'm not asking for how to stop it. I'm wondering whether MPI ads in particular are legal. It is an academic question, not practical. Oct 4, 2023 at 3:49

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