Auto loan refinancing scams begin with false advertising, plain and simple. The ads may include:
- Fake customer testimonials
- Money-back guarantees
- Claims about how much money you’ll save monthly
- A legitimate company’s name or a variant of the name
You’ll find these ads online, in a magazine or newspaper’s classified section, or even on flyers posted around your neighborhood.
Once people respond to the ads, the scammer might tell them to stop making car payments to their current lender, pretending that negotiations are in progress. They may charge the unsuspecting victim an “enrollment fee” or “application fee,” often several hundred dollars. Customers may not find out they’ve been scammed until they receive a notice from their lender about missed payments or, worse, their cars get repossessed1. What a rude awakening!