BBB Warns Deceptive Auto-Warranty Solicitations Plague Consumers Nationwide

February 02, 2009



News Release #020109
Issued: 02/02/2009
Contact: Ken Vander Meeden
616-774-8236 or Email:

BBB Warns Deceptive Auto-Warranty
Solicitations Plague Consumers Nationwide

Better Business Bureaus are warning consumers to be extremely wary of telemarketing calls and mailers which claim their auto warranty had or is about to expire. The BBB advises that the deceptive solicitations could persuade car owners to purchase an extended auto service contract of questionable value.

The BBB has seen a considerable spike in both complaints and inquiries from consumers who state that they received misleading mailers or high-pressure telemarketing calls claiming their auto warranty was about to expire. Complaints against Auto Warranty Processing Services rose by more than 40 percent over the prior year. In 2008, more than 140,000 consumers across the country contacted their BBB to confirm the legitimacy of companies claiming to sell auto warranties.

“As an outgrowth of our country’s economic troubles, and to some extent problems in the auto industry, the BBB is hearing from consumers nationwide who are being bombarded by telemarketers and mailers trying to scare them into thinking their auto warranty is about to expire and if they don’t sign-up now the offer expires,” said Ken Vander Meeden, BBB-WMI President. “Not only are these telemarketers lying about the consumer’s coverage, they are potentially ignoring federal laws such as the Do-Not-Call registry.”

BBB’s have received complaints from consumers across North America who were informed that their car warranty was about to expire, when such was not the case, and that they needed 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.

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 might be 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.

The BBB offers the following advice for dealing with a firm 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 the BBB at

• Consumers can place their phone number on the federal do not call list by visiting 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.

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