No matter what caused you to get behind on your car payments, you are probably desperate for a solution. After all, you need your car to get to work, get groceries, and to drive your family where they need to go. So when you are facing repossession of your car, you might be willing to do anything to avoid it. Unfortunately, scam artists know this and are poised to take full advantage of you. One way they do this is by promising to renegotiate the terms of your loan for an up-front fee. Don’t fall for it—it’s most likely a scam.
What Do These Companies Promise?
Whether you seek out a solution to your car loan payment problems or you receive an unsolicited offer, you should be very wary of what is being promised. These loan modification companies will charge you several hundred dollars and promise to negotiate with your lender to lower your monthly payment. They may share positive client testimonials and claim they have relationships with dealerships and lenders. They may even offer to refund your money if they cannot make a deal for you. However, many of these companies are complete frauds. They have no intention of contacting your lender. Basically, they will take your money and run. Meanwhile, you may have stopped making payments as you wait to hear back about your new payment plan, putting you in even more trouble with your lender. Even when the company is not a total fraud, they cannot do any more for you than you could do for yourself.
So, What Can You Do?
As soon as you are unable to make a payment, contact your lender to see they will work with you. The longer you wait, the fewer options you will have. Your lender may agree to either deferring missed payments to the end of the loan or extending the loan term to reduce monthly payments. You will end up paying more on the loan in the long run, as creditors are unlikely to reduce the amount of principal you owe or to lower the interest rate to accommodate you. If you are unable to negotiate a plan you can afford, the lender may be able to repossess your car.
Fight Back Against Fraud
If you were the victim of loan modification fraud, report the incident to the Federal Trade Commission and call The Consumer Law Group, P.C. to see if we can help you take action against the fraudulent company and get your money back.