FTC Thanks BBB for Help in Stopping Auto Loan Schemes

loan 150x150 FTC Thanks BBB for Help in Stopping Auto Loan SchemesWhat would you do if an auto loan modification company told you to stop paying your lender and send them a large chunk of change? Hopefully, nothing. This is bad advice.

As you might expect, at least one consumer in the above scenario has had his car repossessed. Others were told to hide their cars to avoid the same fate. In addition, the companies involved allegedly failed to provide promised refunds.

The Federal Trade Commission recently thanked the BBB Serving Northeast California for its help in two cases against auto loan modification outfits. The companies are said to have falsely promised A) that they could keep your car from being repossessed and B) that they could reduce your monthly payments. Instead, the companies charged hundreds of dollars in up-front fees and told people to stop paying their lenders.

According to the FTC, Hope for Car Owners typically promised to reduce consumers’ monthly car payments by 30 to 50 percent, for fees ranging from $200 to $500.

In 2010, the BBB asked Hope for Car Owners to substantiate its advertising, concluding that, “We believe that the testimonials on their website are unsupported, and…[you]…should be cautious when relying on the claims as presented.”

In 2011, the BBB challenged Auto Debt Consulting’s advertising, but received no response. Both companies have currently earned an “F” rating.

Both businesses are said to have made website claims like:  “Join the thousands who have already SAVED! (Hope for Car Owners) and “Lower your monthly vehicle payments by as much as 40% regardless of your credit score!” (Auto Debt Consulting).

Sound too good to be true?

The FTC asserts that once up-front fees were collected, neither operation did anything to obtain the promised modifications and consumers who tried to get refunds were denied.

Looking for help managing your auto loan?

Check out the FTC publication Ads for Auto Loan Modifications: You May Be Able to Drive a Better Deal with Your Lender. Investigate the reliability of businesses at www.bbb.org.

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About Holly Doering

Holly Doering has worked for the Better Business Bureau Serving Eastern Washington, North Idaho, and Montana for half a decade. Her areas of expertise include the CORE Values Program (Character, Optimism, Respect, Ethics) for Teens and Charity Review as well as writing and editing. Prior to that, she has written for two newspapers, a local magazine, and taught English at the community college. She is the proud author of a short story in ZYZZYVA literary magazine and has had good luck publishing lots of poetry. Each year she rolls up her sleeves and wades into the autumn Nanowrimo writing madness and has several unfinished novels to her credit.