Ads for auto loans for people with bad credit modification scams are all over the internet. Auto loan modification companies promise to negotiate with lenders to get customers lower car payments — for a hefty upfront fee. But consumer advocates and government regulators explain that most auto car loans modifiers promising lower car payments will take your money and provide little or nothing in return. Nationwide, consumer complaints about auto loans with bad credit modification companies are increasing. Florida’s attorney general shut down Auto Relief Group, a south Florida company that has an F rating with Better Business Bureau.
Auto loan for bad credit modification is a cautionary tale
Pitches by auto loans modification companies offering automobile loan modification services say that they have lender connections and expertise to negotiate dramatically lower interest rates or extended payments. As outlined by WKYC in Cleveland, 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 car loan modifier promised to lower her 13 percent interest rate to 8 percent and then would also 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.
Never really happened – lower car payments
The unemployed student gave her bank account info to Auto Relief Group and agreed to let it take a one-time advance fee of $ 298 from her checking account. As outlined by WKYC, 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 business provided and that if she wanted them to contact her lender, it would cost an additional $ 100.
For what you are able to do yourself, scammers charge
Other consumer complaints about Auto Relief Group indicate the details within the choices report is nothing more than what any person can get from free by calling their auto lender, such as the amount of the loan, the current value of the car, current rate of interest, balance, etc. The student in Cleveland also revealed that Auto Relief Group had made two additional $ 298 withdrawals from her account without her authorization.
Mortgage loan scammers moving to auto loans for people with bad credit
Some financial experts have said that auto loan modification scams are attracting some of the same scammers who modified mortgage loans until regulations shut them down. It was reported by SunSentinel.com 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. Many 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
New laws that went into effect this year drove away most mortgage loan modification scams. The new laws require mortgage modifiers to get mortgage broker licenses and they can no longer charge upfront payments. Auto loan modifiers do not have to be certified or trained. The Federal Trade Commission is considering a new rule that would prohibit any kind of upfront fees for debt settlement services. Auto loan modification wouldn’t be incorporated by the proposed FTC action.
So you’re on your own. You’ve been warned.
More information about this topic at these websites:
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
