Auto loan modification scams that want upfront fees

All on the internet are ads for auto loans for people with bad credit modification scams. 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 say most automobile loan modifiers promising lower car payments will take your money and provide little or nothing in return. Increasing throughout the nation are consumer complaints about auto loan for bad credit modification companies. Florida's attorney general shut down Auto Relief Group, a south Florida business that has an F rating with Better Business Bureau.

Article resource: Don't fall for auto loan modification scams asking upfront fees by Personal Money Store

Auto loans for people with bad credit modification is a cautionary tale

Pitches by auto car loans modification companies offering automobile loan modification services claim they have lender connections and expertise so they can 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 with bad credit modifier promised to lower her 13 percent rate of interest to 8 percent and extend the loan, which would result in a lower monthly car payment of $ 290.00. They also claimed they often worked with Honda Financial Services, her lender.

Lower car payments never really happened

The unemployed student provided her bank account details 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, they explained that 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.

For what you can do yourself, scammers charge

Other consumer complaints about Auto Relief Group point toward the information in the choices report is nothing more than what anybody can get from free by calling their auto lender, like the amount of the loan, the current value of the vehicle, current rate of interest, balance, etc. The student in Cleveland also found that Auto Relief Group had made two additional $ 298 withdrawals from her account without her authorization.

Moving to auto loan financing are mortgage loan scammers

Some financial experts have said that auto loan modification scams are attracting the exact exact same scammers who modified mortgage loans until regulations shut them down. SunSentinel.com reports that claims on auto-loan modifier sites 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 all of the homeowners lost their homes and millions in upfront modification fees.

Auto loan modification companies unregulated

Mortgage loan modification scams were driven away this year by new laws. The new laws require mortgage modifiers to get mortgage broker licenses and they can no longer charge upfront payments. Auto loan modifiers don't have to be certified or trained. The Federal Trade Commission is putting into consideration a new rule that would prohibit upfront fees for debt settlement services. The proposed FTC action wouldn't consist of auto loan modification.

So you're on your own. Consider yourself warned.

Citations:

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