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Better Business Bureau ®
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Utah
Watch Out for Deceptive Auto-Warranty Solicitations
February 19, 2009

Deceptive Auto-Warranty Solicitations Plague Consumers Nationwide

The Better Business Bureau is warning consumers to be extremely wary of telemarketing calls and mailers which claim their auto warranty has expired. These deceptive solicitations could persuade car owners to purchase an extended auto service contract of questionable value.

The scam is as follows: consumers are notified that their car warranty is about to expire, when such is not the case, and that they need to take immediate action in order to avoid a lapse in coverage. BBB research shows that the consumer is actually being sold an extended service contract and despite the impression given, the offer is not associated with the car manufacturer’s warranty.

“Consumers nationwide are being bombarded by telemarketers and mailers trying to scare them into thinking their auto warranty is about to expire,” said Jane Driggs, President of the BBB in Utah. “Not only are these telemarketers lying about the consumer’s coverage, they are potentially ignoring federal laws such as the Do-Not-Call registry.”

The value of the various extended service contracts being sold also has been called into question, as many consumers complained that the contract had numerous conditions that were difficult to meet. For instance, pre-existing conditions often are not covered, proof of maintenance records may be required and restrictions on authorized repair facilities and repair charges must receive prior approval making many of these contracts virtually worthless. Others report difficulty in obtaining refunds.

Complaints against Auto Warranty Processing Services rose by more than 40% over the prior year. In 2008, more than 140,000 consumers across the country contacted the BBB to confirm the legitimacy of companies claiming to sell auto warranties.

BBB offers the following advice for dealing with telemarketers selling extended auto service contracts:

  • Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer.

  • When considering an extended service contract or any other type of telephone solicitation, insist on getting a contract in which all terms and conditions are clearly explained before signing up or providing credit card or other payment information.

  • Read your auto manufacturer’s warranty and contact your dealer or manufacturer so that you are not purchasing duplicate coverage.

  • Before purchasing extended warranty coverage, consumers should always check the company out first with BBB at www.bbb.org.

  • Consumers can place their phone number on the federal do not call list by visiting www.donotcall.gov. If the consumer is already on the list but continues to receive telemarketing calls, he or she can use the same Web site to report the incident to the FTC.

For more information you can trust on avoiding fraud and identity theft, go to www.bbb.org.