WASHINGTON, D.C. — Under a settlement reached 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 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 commission alleged 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 of their vehicles being repossessed. But once the upfront 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. 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.

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