The television commercial claimed they had relationships with car lenders and could cut your payments through loan modification. While I knew the claims were unlikely to be true, I still had to investigate those claims. What I found were patterns of deceptive advertising and outright fraud.The commercial I saw was by a company called Auto Relief Group. They claimed that they had relationships with major auto lenders and were authorized to serve as a “trusted third party” to help you modify your car loan.
I am aware of the fraudulent mortgage modification companies that exploited vulnerable homeowners that were unable to keep up with their mortgage payments. This appeared to be a new wrinkle on an old scam. These companies were trying to cash in on drivers who could not afford their car payments.
The claims were that they could lower your car payments by modifying your loan. Of course, only your lender can modify your loan, and that’s only if they determine it to be in their best interests, not yours.
Apparently I was not the only one who recognized the deception in their ads. Of course, the national television commercials were sure to attract a lot of attention. Florida’s Attorney General Bill McCollum also spotted the scam.
Auto Relief Group LLC was shut down. Furthermore, the companies assets were seized by court-appointed Receiver Daniel Stermer. Stermer has a lot of experience with financial scams as he is also serving as receiver for the Hess Kennedy Law Firm scam.
I examined the entire car loan modification model and discovered that there are two distinct categories of organizations. Some companies draw you in for a modification but really focus on refinancing the loan. While this is an indirect response, it might be an option for someone with an unaffordable loan.
The illicit operations are the ones that promise loan modifications but instead take your money and send letters on your behalf. These clients are paying $300-400 on average for someone to insert their name into a form letter and drop it in the mail to the lender.
There is no crime in being relatively ineffective as a company. The problem lies in the deceptive advertising that these loan modification companies use to falsely imply that they are a realistic option for someone having trouble with car payments. They are making claims of success rates, relationships with lenders and other false implications that they cannot deliver.
Ultimately, it is up to you to decide when a company is reputable and when their are deceptive. The Better Business Bureau often shows the first warning signs for a problem company. You can often spot a scam well before regulators are able to act and shut down these rogue operators.
If you are having trouble with your car loan, try contacting your lender to see if they will work with you. You might be surprised that many lenders will make small changes to help you get back on track without having to modify your loan!
Tags: auto relief group, car loan modification