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In a settlement with the Federal Trade Commission, two California-based companies and their principals, who allegedly took hundreds of thousands of dollars from consumers, are banned from marketing auto loan relief or any other type of debt relief to consumers.

The FTC filed charges against the companies – Kore Services LLC, doing business as Auto Debt Consulting, and NAFSO VLM, Inc., doing business as Vehicle Loan Mod – and their principals last year.

The FTC alleged that the defendants promised to reduce consumers’ monthly auto loan payments by 25 to 40 percent, for fees ranging from $350 to $799. The defendants offered a 100 percent money back guarantee.

According to the FTC, many consumers were told to stop making payments on their auto loans, which increased the risk that their vehicles would be repossessed. But once the up-front fees were collected, the defendants did not do anything to obtain the promised loan modifications. Consumers who tried to get refunds were denied. And some consumers’ vehicles were repossessed by their finance companies.

The settlement bans the defendants from providing any type of debt relief service; prohibits them from making misrepresentations about any other product or service they market; and requires them to support claims with competent and reliable evidence. In addition, the defendants are required to destroy customer information obtained by the loan modification scheme within 30 days after the settlement order takes effect.

The settlement also imposes a $279,728 judgment against the defendants, which represents the total amount of consumer injury they allegedly caused by deceptively marketing auto loan relief to cash-strapped consumers. The companies’ available assets will be turned over to the FTC. The judgment against Michael Kamfiroozie and Naythem Nafso will be suspended due to their inability to pay. If it is later determined that the financial information the individual defendants provided to the FTC was false, the full amount of the judgment will become due.

This case is part of the FTC’s ongoing effort to protect consumers in financial distress and to halt unfair or deceptive practices in the auto marketplace.

Recognizing that a car is second only to a home as the most expensive purchase many consumers make, the FTC has been highly engaged in auto-related consumer issues. The agency recently held a recent series of roundtable workshops to gather information on possible consumer protection issues that may arise in the sale, financing or lease of motor vehicles.

For FTC consumer information about managing their auto loans, see the video Paying Your Car Loan, and Ads for Auto Loan Modifications: You May Be Able to Drive a Better Deal with Your Lender.

The Commission vote approving the proposed consent decree was 4-0-1, with Commissioner Joshua D. Wright not participating. It is subject to court approval. The FTC filed the proposed consent decree in the U.S. District Court for the Eastern District of California on January 14, 2013.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendants that the law has been violated. Consent decrees have the force of law when approved and signed by the District Court judge.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

Contact Information

Betsy Lordan
Office of Public Affairs


Malini Mithal
Division of Financial Practices