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Warning: Watch Out for Auto Loan Modification Scams

By , Posted on Jun 12, 2013
General Budgeting Debt. Saving Money Savings credit card credit cards debthelper.com credit card debt
General Budgeting Debt. Saving Money Savings credit card credit cards debthelper.com credit card debt

There’s a good chance that you are pretty happy with your car.  It gets you to the places you need to go, including your job.  But if your car is financed and you are late with your payments, you could have your car taken away.

If you are having some financial trouble and find it more and more difficult to make your monthly payment, you might think it is a good idea to go to one of those companies that claim they can reduce your monthly loan or lease payment and help you avoid repossession.

Often times these companies charge several hundred dollars in up-front fees and boast about their relationships with all of the lenders and claim they can significantly lower your payments.  They will even have all kinds of wonderful testimonies from all of their “satisfied” customers.  There are even a few of these companies that promise if they can’t reduce your payments with your lender that they will refund your money.

The promises may sound like a way to get out from under. But the Federal Trade Commission (FTC), the nation’s consumer protection agency, says it’s smooth talk by scam artists who are out to take your money and provide nothing in return. In fact, the FTC recently sued companies that made claims like these, but failed to deliver the auto loan modifications they promised or honor the refund policies they “guaranteed.” What’s more, in many instances, the companies never even contacted any lenders. FTC

The scam is always the same, after you pay your upfront fee to one of these companies, nothing happens.  What adds to the horrible mess these companies put their clients into, is that often they tell the victims to stop making their payments until the loan modification goes through.  By the time they figure out they have been scammed, these unsuspecting victims find themselves even deeper in debt and facing the real likelihood of repossession.

It boils down to the same type of scam perpetrated on homeowners with the mortgage loan modifications scams, money is paid upfront for a service that is never performed or not performed as promised.

If you are having trouble making your car payments on-time, contact your lender directly to discuss your options as soon as possible.  The longer you wait the worse it gets and the amount you owe will just keep piling up.  There are instances where a lender will defer a payment or two, tacking them on the end of your loan, or perhaps even extending your loan and re-calculating your payments to get them lower.

Realize that when you do something like this, you will not avoid the interest.  It is usually capped onto the principal of the loan.  Also, if you have your loan extended, you are drastically increasing the total cost of the vehicle that you are financing.  All these things aside, sometimes it is a necessary evil in order to keep you much needed car and ease some of your debt load.

If you find yourself struggling each and every month to pay your bills, or are living paycheck to paycheck, it might be time to talk to a professional debt management specialist.

The professionals at DebtHelper.com can explain the benefits of a debt management program and provide you with a fresh start.

One of the biggest long-term benefits of the debt management plan is the reduction in interest. Reduced interest allows you to pay off your principal balances faster while saving you possibly thousands of dollars in finance charges.

In order to determine if you are eligible for a debt management program, you can fill out an online budget application form now and then you can contact one of their Certified Personal Finance Counselors© at (800) 920-2262.

DebtHelper.com can currently accept clients from the states listed here. DebtHelper.com is licensed, insured and complies with all state licensing requirements to ensure mandated regulations are followed. They are diligently working on becoming licensed in every state and are opening new states monthly.

Please call (800) 920-2262 if you have any questions. DebtHelper.com’s consultations are free, call them any time.

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