FTC settles with fraudulent lender
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UPDATED: Dec 10, 2012
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The Federal Trade Commission has settled its lawsuit against Hope for Car Owners, a business which fraudulently claimed to modify consumers’ car loans.
As part of the settlement, Patrick Freeman, the only owner of the business, is banned from making and marketing car loan modifications.
Hope for Car Owners is in default, meaning that it does not have enough money or assets to repay victimized customers.
In April 2012, the FTC alleged that Freeman’s company charged up-front fees priced at hundreds of dollars. These fees were required to cover “promises” that Hope for Car Owners would reduce the monthly payments customers made on their car loans in order to avoid the prospect of repossession.
According to a news release from the FTC, Hope for Car Owners actually told their customers to stop making payments on their car loans. Once Freeman’s company had received up-front fees from their customers, they did not work with lenders to make good on their “promise” to modify existing payment amounts. Any customers that tried to get refunds once it became obvious that they were not getting assistance were denied.
In one situation, the company charged a woman $400 then instructed her to stop making monthly payments on her car loan. The woman was soon told by her lender that her vehicle would be repossessed.
Now that the settlement is in place, Freeman is prohibited from marketing such a business again. Any customer information that was obtained by Hope for Car Owners must also be destroyed within the 30 days after the settlement takes effect.
Freeman was also required to pay restitution valued at $362,388, but unfortunately for his victims, Hope for Car Owners is so deeply in debt it has defaulted on its own financing and unable to pay. As a result the restitution imposed by the settlement was suspended.