Scam of the day – April 8, 2012 – Auto loan modifications

Just as the financial problems of some consumers have spawned many home mortgage modification scams, the latest scam to take advantage of consumers with financial problems is companies promising to modify the loans of consumers who are having problems paying their car loans.  The FTC just announced actions being taken against two companies accused of deceiving customers by claiming that they could reduce car loans for them by as much as 40% in return for up to $800 in fees.  According to the FTC in many instances companies promising this kind of help not only don’t provide the help they claim, but in many instances don’t even contact the lenders.

TIP

Always be wary of companies that require fees paid in advance for their services.  If you are having problems with a car loan, your best course of action is to contact your lender directly on your own to see what options you have.  The sooner you contact the lender, the more options you will have.  Lenders may be willing to either defer missed payments to the end of a loan or extend the loan term to reduce your monthly payments.  That last option may dramatically increase the amount you pay on your loan, but at least you may be able to keep your car.