Companies that advertise auto-loan modifications are simply peddling another way for consumers to lose money, writes Steve Cypher for Auto Credit Express. The Federal Trade Commission (FTC) reports that scammers advertise such programs to attract people who are having trouble making car payments. These companies often claim to have close ties with consumer lenders; and they usually promise to significantly reduce a monthly car note or lease payment, help consumers avoid repossession, and/or offer refunds if they cannot help the consumer.
The FTC has sued many such firms for promising loan modifications that were never done. Not only did borrowers not receive refunds, but the loan-modification companies often never even contacted lenders. Victims of these frauds typically pay a fee for the promise of a loan modification that is never fulfilled, are advised to stop making car payments while modification firms negotiate with lenders, or pay additional fees for the scammers to continue their cases. The FTC recommends that consumers who are struggling with car payments contact the lender directly to discuss options as soon as possible. Those who may have been defrauded by an auto loan modification scam should file a complaint with the FTC.