The Federal Trade Commission has announced yet another action against a debt relief company that closes their doors but protects consumers.
But yet again, here is another example of a scammer being caught and fined, but unable to pay the big fines. Patrick Freeman, the sole owner of Hope for Car Owners has agreed to a $362,388 judgment as part of his agreement with the FTC, but it will be suspended due to Freeman’s inability to pay it.
In April 2012, the FTC alleged that Hope for Car Owners, LLC and Freeman charged hundreds of dollars in up-front fees, based on bogus promises that they could reduce consumers’ monthly car loan payments and help avoid repossession of their vehicles.
Recognizing that a car is second only to a home as the most expensive purchase many consumers make, the FTC has been highly involved in auto-related consumer issues. In this case, the agency alleged that the defendants’ websites (carloanmod.com, hopeforcarowners.com, hope4carowners.com, and hope4carowners.org) and telemarketers promised consumers substantially lower monthly payments. According to the FTC, the defendants collected hundreds of dollars in up-front fees and told the consumers to stop paying their auto lenders, which often left them in worse shape than when they began, and increased the risk that their vehicles would be repossessed. The FTC also alleged that once the up-front fees were collected, the defendants did nothing to obtain the promised loan modifications, and consumers who tried to get refunds were denied. In one case, for instance, Hope for Car Owners took $400 from a consumer and told her not to make any more payments on her vehicle, according to the FTC. The consumer followed the defendants’ instructions, and her lender soon informed her that her vehicle was going to be repossessed.
Under the settlement order, Freeman is prohibited from making misrepresentations about financial products and any other product or service. He also is required to back up any claims about the benefits, performance, or efficacy of any product or service, and to destroy customer information obtained by the loan modification scheme within 30 days after the settlement order takes effect. – Source
The FTC has just put out another educational video to help inform consumers about the risks of working with advance fee auto loan modification companies.