Auto loans bad credit modification scam ads are all over the internet. Auto car loans modification companies promise to negotiate with lenders to get customers lower car payments — for a fairly large upfront fee. But consumer advocates and government regulators say most auto loans modifiers promising lower car payments will take your money and provide little or nothing in return. Nationwide, consumer complaints about auto car loans modification companies are increasing. In June, Florida’s attorney general shut down Auto Relief Group, which is a south Florida business that has an F rating with Better Business Bureau.
Source for this article: Don’t fall for car loan modification scams asking upfront fees by Personal Money Store
Car loan modification seems a cautionary tale
Pitches by auto loans with bad credit modification companies offering car loan modification services claim they have lender connections and expertise to negotiate dramatically lower interest rates or extended payments. WKYC in Cleveland reports that an unemployed student was looking for help with her $ 420.00 per month car payment when a television ad led her to Auto Relief Group. The auto loans modifier promised that they would lower her 13 percent interest rate to 8 percent and extend the loan, which would result in a lower monthly car payment of $ 290.00. They also said they would work with her lender, Honda Financial Services.
Lower car payments – they never really happened
The unemployed student provided her account with the bank info to Auto Relief Group and agreed to a one-time advance fee of $ 298 from her checking account. WKYC reports that when she didn’t notice any reduction in her monthly car payment after a couple months, she contacted Honda directly and learned that Auto Relief Group had never contacted her auto lender. When she confronted Auto Relief Group, she was told the $ 298 fee was for an “options report” the company provided and that if she wanted them to contact her lender, it would cost an additional $ 100.
Scammers like to charge for what you may be able to do yourself
Other consumer complaints about Auto Relief Group indicate the information within the opportunities report is nothing more than what anybody can get from free by calling their auto lender, such as the amount of the loan, the current value of the vehicle, current interest rate, balance, etc. The student in Cleveland also discovered that Auto Relief Group had made two additional $ 298 withdrawals from her account without her authorization.
Scammers who did mortgage loans are not moving to auto loans
Some financial experts have said that auto loan modification scams are attracting some of the very same scammers who modified mortgage loans until regulations shut them down. SunSentinel.com reports that claims on auto-loan modifier websites and ads — “We can help you keep your car, truck, boat or RV!” “Stop repossession and make your payments affordable!” — are almost identical to the promises mortgage loan modification scams once made to property owners facing foreclosure. A lot of those promises weren’t kept and homeowners lost their homes and millions in upfront modification fees.
Unregulated are all of the auto loan modification companies
Mortgage loan modification scams were driven away this year by new laws. The new laws require mortgage modifiers have to get their mortgage broker licenses and they can no longer charge upfront payments. Auto loan modifiers don’t have to be as much as trained. The Federal Trade Commission is putting into consideration a new rule that would prohibit upfront fees for debt settlement services. However, the proposed FTC action would not include auto loan modifications.
You’re on your own for this one. Consider yourself warned.
More info available at these sites:
WKYC
wkyc.com/news/local/news_article.aspx?storyid=138784&catid=3
Sun Sentinel
sun-sentinel.com/fl-auto-loan-modification-20100707,0,6069557.story
FTC
ftc.gov/opa/2010/04/debttestimony.shtm
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