Two California-based auto loan relief services firms have been banned by the FTC from providing future services after the firms allegedly failed to provide the advertised services paid for by customers.
The FTC alleges that the defendants, which include Kore Services, operating as Auto Debt Consulting, and NAFSO VLM, operating as Vehicle Loan Mod, told customers they could reduce their monthly loan payments by 25 percent to 40 percent in return for a fee ranging between $350 and $799 and offered a 100 percent money-back guarantee.
Many of the defendants’ customers were told to stop making auto loan payments, increasing the risk that the customers’ vehicles were repossessed. Once the firms collected the fees, however, they failed to provide the advertised services. Some consumers’ vehicles were also repossessed by their finance companies.
The settlement bans the firms from making any representations about their products or services, requires them to support claims with evidence and requires that they destroy customer information within 30 days after the settlement order takes effect. The firms were also ordered to pay $279,728 in consumer damages, and their assets will be turned over to the FTC.
A car is second only to a home as the most expensive purchase made by consumers, leading the FTC to focus efforts on auto-related consumer issues. The FTC has also held a number of roundtable discussions on consumer protection issues related to the sale, financing and leasing of automobiles.