FTC Bans Deceptive Auto Loan Relief
The Federal Trade Commission has entered into a settlement with two California-based companies, which the FTC claimed to have cheated California consumers out of hundreds of thousands of dollars in bogus debt relief scams.
The companies named in the action are Hope for Car Owners, LLC, NAFSO VLM, Inc. (also doing business as Vehicle Loan Mod) and Kore Services LLC (doing business as Auto Debt Consulting). Don't let the clever names or websites festooned with patriotic flags fool you. In a complaint filed last year, the FTC alleged that Hope for Car Owners and Auto Debt Consulting , as well as several individuals running those operations, deceived car buyers with false promises in exchange for hefty up-front fees, and then did not provide promised refunds when they failed to obtain car loan modifications. This kind of fraud targets consumers whose car or truck - often their sole means of transportation - is at risk. While the debt relief companies made out like bandits, many cash-strapped consumers got stuck with even more debt than they started with. A good description of the full settlement can be found here.
The enforcement action is part of a larger effort by the Federal Trade Commission to protect automotive consumers. Education and litigation are both powerful means of consumer protection and advocacy. The FTC has increased its efforts to provide information to enhance financial literacy. For more advice on auto loan modification scams, check out the FTC's explanation here.