The Federal Trade Commission (FTC), part of the U.S. federal government, works to protect consumers. One part of their work involves protecting consumers against financial scams. Recently, the FTC cracked down on what used to be an auto loan scam. A company, Hope for Car Owners, LLC, promised to deliver auto loan modifications that would help consumers lower their monthly car payments and avoid auto repossession.
The FTC found that the problem with this company was that it demanded cash upfront and never delivered its promises, according to an FTC press release dated December 4, 2012. Consumers gave Hope for Car Owners hundreds of dollars thinking that the company would help them reduce their car payments. However, the company told its clients that they could then stop paying their auto loan services. This advice unfortunately backfired and some clients of the scam lost their cars in repossession.
The FTC stepped in to stop the company. The agency will require Hope for Car Owners to back up their â€œclaims about the benefits, performance, or efficacy of any product or serviceâ€ that it offered. Additionally, the company will have to destroy data that they collected and the owner of the company will have to pay a $362,388 judgment. The judgment is currently on hold because the owner does not have the means to pay it.
Instead of relying on loan modification programs, some of which are scams, as evidenced by this case, the FTC recommends that consumers â€œcontact their lenders directly,â€ if they are having difficulty making payments.
At the law office of Jayson Lutzky, P.C., we are here to help you if you are in debt, having difficulty with a loan or if you are considering filing bankruptcy. Mr. Lutzky, who has over 29 years of experience as a lawyer, offers free initial in person consultations. To learn more, visit www.MyNewYorkCityLawyer.com or call his office at (800) 660-LAWYER/5299.