The FTC announced it has entered into a settlement agreement shutting down a debt relief services company focused on distressed auto loan borrowers. The FTC alleged that the company made false promises that it could obtain loan modifications and prevent repossession of their vehicles. According to the settlement agreement, the company collected fees while doing nothing to actually obtain modifications and stonewalled customers who sought refunds. In certain instances, the company allegedly instructed borrowers to stop payment and cease communication with their lenders after retaining its services. The settlement agreement also enjoins the company’s principal from engaging in debt relief service activities and imposes a civil money penalty of approximately $362,000.
Alert December 11, 2012