Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Auto Loan Modification Company Banned from Offering Debt Relief Services, (Mar 11, 2013)

The federal district court in Sacramento has issued a default judgment banning the California-based company Hope for Car Owners, LLC from offering debt modification services (FTC v. Hope for Car Owners, LLC, FTC File No. 1223021, Case No. 12-cv-00778-GEB-EFB).

The FTC previously reached a settlement with the owner of Hope for Car Owners, Patrick Freeman, that banned him from marketing debt relief services and imposed a $362,388 judgment against him, which was suspended due to his inability to pay. The default judgment also imposes a $362,388 judgment against Hope for Car Owners.

In March 2012, the FTC charged Freeman and Hope for Car Owners with violating the FTC Act by falsely promising consumers that Hope for Car Owners could modify auto loans and stop cars from being repossessed. The FTC alleged that Hope for Car Owners and Freeman unlawfully charged hundreds of dollars in up-front fees, and told the consumers to stop paying their auto lenders, which often left them in worse shape than when they began, and increased the risk that their vehicles would be repossessed. The FTC also alleged that once the up-front fees were collected, the defendants did nothing to obtain the promised loan modifications while also denying requests for refunds.

In addition to the ban on loan modification services, the default judgment prohibits Hope for Car Owners from making misrepresentations about any other product or service. It requires the company to back up any claims about the benefits, performance, or efficacy of any product or service, and to destroy customer information it obtained in connection with the scheme.

Companies: Hope for Car Owners, LLC

News: ConsumerProtection FederalTradeCommissionNews