Q: Can I keep progressive from cutting a total loss check to the but here pay here lender who has now sold the contract?

A: YOU can't do anything about this unless you have a power of attorney from your sister. Your sister needs to demand written proof from the third party finance company who claims they hold the contract, by getting their name, mailing address and loan number and mailing them a letter asking for the proof. She needs to send written notice to Progressive that another lender is claiming they were assigned the lien and request they hold payment until the true owner of the lien can be ascertained. She needs to give copies of both of those letters to the car dealer in question. If Progressive cuts the check payable to your sister and the car lot as lienholder they should mail it to her and she should hold the check pending resolution of the dispute. If it is true that the car dealer sold the note, the check needs to be returned and reissued to the correct lienholder and your sister needs to work things out with the new owner to pay the note off. I'm assuming the dealer "verbally" agreed to take $4,000.00. This agreement will be denied by the shady dealer and is likely unenforceable. Your sister should look elsewhere for a replacement vehicle, regardless if the dealer ends up holding the loan or not. She needs to be prepared to make any regular monthly payments that were due or are coming due to whoever it is that proves they hold the note in order to avoid further damage to what is probably already poor credit. She should refrain from financing vehicles through buy here pay here lots if at all possible in the future. This is not insurance fraud per se but if you have an issue with it report it to the North Carolina Attorney General's office and the North Carolina Department of Insurance.