From the Bureau of Consumer Protection Business Center of the FTC
Auto loan modifications? Take note.
* By Lesley Fair
* April 6, 2012 – 11:13am
http://business.ftc.gov/blog/2012/04/auto-loan-modifications-take-note
Tough federal and state law enforcement has turned up the heat on mortgage foreclosure rescue scams. So some operators are turning to auto loan modifications to make a fast buck on consumers in financial distress. In the first cases of their kind filed by the FTC, the agency is alleging that two unrelated California outfits charged hundreds of dollars in upfront fees, based on bogus claims they could reduce consumers’ monthly car notes and help them avoid The Repo Man.
According to the FTC’s complaint against Hope for Car Owners and Patrick Freeman, the defendants deceived consumers with false promises of help:
* “We have nearly a 99% success rate which means in almost every situation we have been able to achieve a positive financial result which means putting real dollars back into our clients’ pockets.”
* “In nearly every instance our negotiations have allowed [our] clients to keep their vehicles AND reduce their monthly payment and/or principal balance. It is NECESSARY and it is EFFECTIVE!”
* “I was $11,000 upside down on my truck and was ready to give it back because I could no longer afford the payments. Hope 4 Car Owners negotiated a new payment plan that cut my payments in HALF!!”
According to the FTC’s brief in the case, in a telemarketing call with an undercover FTC investigator, the defendants’ representative made similar claims despite joking, “We’re not technically allowed to, you know, preemptively say where our average and things are because, you know, invariably human nature is like, yeah, that’s what I want.” The FTC alleges he did so nonetheless.
