Debtors Unite: Help with Car Payments
Help with Car Payments, Loans and Refinance

Car Loan Modification Scams

A new breed of scam began brewing in 2008 to take advantage of financially distressed debtors. Several car loan modification scams developed, some on a national scale.

These companies claimed that they could work with your lenders and modify your car loans so that you could make lower car payments. However, they grossly misrepresented their services and effectiveness. At most, they sent form letters on your behalf with near-zero results. Meanwhile, if you stopped paying your lender, you risk repossession of your vehicle.

Here are some of the scams that have been revealed:

Case Study: Auto Relief Group LLC

Jeffrey Taylor, the Director of Sales at Auto Relief Group was quoted in a January 2010 press release:

Auto Relief Group provides you with the hands on help in restructuring your loan. ARG will work with your current lender, acting as a trusted third party and a valuable "buffer" between parties involved. Since ARG works on "success" basis, our interest is entirely aligned with yours. If we cannot help you negotiate acceptable terms for your loan, we don't feel like we have earned our fee and you owe us nothing.

It was reported by Debtors Unite that the Auto Relief Group scam was shut down by regulators. It is now in receivership and it is doubtful that clients will receive any substantial refunds of what they paid in. Meanwhile, many of them have lost their cars, falsely believing that Auto Relief Group could prevent repossessions.

Since Auto Relief Group was unable to afford the renewal of their lease, the Receiver Daniel Stermer is having substantial challenges to identifying assets and moving forward with partial refunds. Telephone numbers are disconnected due to nonpayment. If you are owed money by Auto Relief Group, it is unlikely that you will receive a partial refund at some point in the future. Any refund is expected to be a fraction of what you paid in, and it could take two years or more to complete the process!

According to an investigation by Florida Attorney General Bill McCollum, investigators determined these lenders had previously notified Auto Relief Group of their non-negotiation policies. Any car loan modification firm that claims to have relationships with lenders to modify your loan is falsely advertising their services. They cannot modify your loan, and you are likely throwing your money away!

The investigation showed that nearly all of the few clients who were able to gain "modifications" were only able to receive a minor deferment in payment, not a reduction in interest or a lower payment. This is what they could have done on their own, without paying the $299-$375 in upfront fees that should have instead been paid to their lender.

Case Study: Hope for Car Owners

In April 2012, Patrick Freeman and his company, Hope for Car Owners LLC were charged by the Federal Trade Commission for conducting a car loan modification scam. The firm promised to help delinquent car owners modify their loans in exchange for an upfront fee. The fee ranged from $200 to $500 per client.

Clients were normally promised a reduction in their car payment of 30-50%. The reality was that most clients saw no reduction in their car payment and were unable to receive a refund of their fees. To make matters worse, their lenders continued normal collection practices and often repossessed the vehicles.

The defendants were charged with violating the FTC Act. They are accused of making false and deceptive claims in connection with their car loan modification service. According to the FTC, it was all a scam.

Hope for Car Owners LLC was shut down by the FTC along with another unrelated car loan modification scam. That one was conducted by Auto Debt Consulting, which also did business as Car Loans Modification.

Our Promise
Unlike the advertisements that you may see claiming that they can modify your car loan, we tell you the truth. We do not modify your car loan, and neither do they. The difference is that we don't charge you and instead give you the tools you need to keep your car.
Car Loan Advocate
                                                                                                                    Copyright © 2010-2012 Debtors Unite, Inc.
Debtors Unite, Inc.
5540 Centerview Drive
Suite 200
Raleigh, NC 27606