By Mark Huffman
June 27, 2010
There are plenty of schemers out there preying on desperate homeowners by promising to help them get mortgage modifications. But the bogus pitch isn't just limited to home loans.
In Florida, Attorney General Bill McCollum this week filed a lawsuit against a Broward County company accusing it of deceptive and unfair trade practices related to automobile loan modifications.
According to the complaint, Auto Relief Group, its subsidiaries and owners John J. Boyle and John J. Boyle III falsely represented in national television and radio commercials that they could reduce consumers' car payments by up to 50 percent. The Florida Attorney General's Office was granted an injunction to freeze the company's assets and appoint a receiver to take possession and control of the company.
An investigation by the Attorney General's Economic Crimes Division revealed that Auto Relief Group representatives allegedly told undercover investigators they qualified for loan modifications that would reduce their monthly auto loan payment up to 50 percent. The only catch? The consumer had to make up-front payments ranging from $299 - $375.
The company also represented that they had "relationships" with lending entities which would allow them to negotiate substantial payment reductions, McCollum said. Investigators determined these lenders had previously notified Auto Relief Group of their non-negotiation policies, but Auto Relief Group continued to send modification requests to these lenders.
In the majority of cases when lenders agreed to modifications of car loans, the modifications consisted of only minor deferments of payments due, not reductions of the interest rate charged. McCollum said his office is still working to locate victims, but the investigation indicates the company may have collected several hundred thousand dollars in up-front fees from consumers each month.
In addition to the injunction, the Attorney General's Office is seeking full restitution on behalf of all victimized consumers, civil penalties, and reimbursement for fees and costs related to the investigation.