Beware of Automobile Extended Warranty Scams
They use phone calls to your cell or home phone, postcards and official looking letters to sell outrageously overpriced extended warranties for your car, SUV or truck. The mailings come on brown paper and look like an important notice from your car dealer or automaker. There is always an eye-catching warning on the front of the card, like: 'Final Notice: Expiring Auto Warranty.
The FCC Consumer Center has noticed an increase in complaints and inquiries from consumers who have received unsolicited calls from rude callers telling them they need to renew their automobile warranties. During the calls, which may be live or automated or pre-recorded, the consumer is told that the warranty on his or her automobile is about to expire and is instructed to press a number to renew it. The callers often pose as representatives of a car dealer or manufacturer, and may even have specific information about the consumer's particular make, year and model car, truck or SUV. They may claim to be from "the Auto Processing Department" or Auto Processing Center".
Many of these calls may violate FCC Do-Not-Call rules. And many may actually be fraudulent if you press a certain number or stay on the line, you may be asked to provide several types of personal information, including your credit card number, which can be used to defraud unwary consumers. The Federal Trade Commission recently filed suit in federal court against companies suspected of making these calls. The FCC also investigates potential violations of FCC rules, and some states and telephone companies have sued companies that make these types of calls.
The FCC's Rules
If you have placed your residential wired telephone number or your personal wireless phone number on the National Do-Not-Call list and you receive one of these calls, from anyone other than a business that sold you the car or repaired it, that call may violate the FCC's Do-Not-Call rules. In addition, if you receive one of these calls on a wireless device, and the call is pre-recorded or placed using an autodialer, it may also violate the FCC's rules unless you have given your prior consent to be called. In addition, anyone making a telephone solicitation call to your home number must provide his or her name, the name of the person or entity on whose behalf the call is being made, and a telephone number or address at which that person or entity can be contacted. If the call is a pre-recorded message, it must include a contact telephone number. Without these disclosures, the call violates FCC rules.
If you have caller ID, a telemarketer is required to transmit or display its phone number and, if available, its name or the name and phone number of the company for which it is selling products. The display must include a phone number that you can call during regular business hours to ask that the company no longer call you. This rule applies even if you have a previously-established business relationship with the company, and even if you have not registered your home phone number(s) on the national Do-Not-Call list.
For complete information on all the FCC's rules regarding telephone solicitations, see this page.
What to Do If You receive an Auto Warranty Call
First, do not provide any personal information, such as social security numbers, credit card information, driver's license numbers, or bank account information to the caller. Telephone scammers are good at what they do and may imply that they work for a company you trust.
Second, if you have certain information about the call or caller, you can file a complaint with the FCC. In some cases, the FCC can issue warning citations and impose fines against companies violating or suspected of violating the do-not-call rules, but the FCC does not award individual damages. The FCC needs to know certain details about the call and as much information about the caller, including name and telephone number, as you can provide. Therefore, be sure to fill out the online complaint form fully, or see the list of information to include with your complaint on the FCC consumer fact sheet. There is no charge for filing a complaint. The easiest method is to use the FCC's online complaint form. A series of questions will take you to the correct form and section of the form for providing the information the FCC needs to process a complaint. You can also file your complaint with the FCC's Consumer Center by using the contact information provided in the For More Information section below.
Some states permit you to file law suits in state court against persons or entities violating the do-not-call rules. You may be awarded $500 in damages or actual monetary loss, whichever is greater. The amount may be tripled if you are able to show that the caller violated the rules willfully and knowingly. Filing a complaint with the FCC does not prevent you from also bringing a suit in state court. If you think you have received a call involving fraud, you may also want to complain to the Federal Trade Commission. Visit the Federal Trade Commission's website for information about their efforts to stop auto warranty scams. You can file a complaint with the FTC online. You can also submit a complaint by calling the FTC toll-free at 1-877-382-4357 (voice) or 1-866-653-4261 (TTY), or writing to:
Federal Trade Commission
600 Pennsylvania Ave., NW
Washington, DC 20580.
How to Avoid a Scam Warranty
If you considering getting an extended car warranty for
- a used vehicle you just purchased and the dealer offered you an extended auto warranty.
- An existing car you own, or
- A vehicle you just purchased new;
take care! An extended warranty could save you hundreds, even thousands of dollars on future repairs, but you need to take care, the auto warranty business has been plagued with scam artists, fly-by-night businesses and companies with poor reputations. This does not mean that all auto warranty providers are bad; it just means you need to be careful. Here are some things that you can do to avoid car warranty scams.
- Check the warranty company's credentials.
Check with BBB
Look for a company in business for more than five years.
Google the name of the company
- Don't give in to high pressure sales.
A salesman that talks over you or won't allow you to ask and him answer questions is a sure sign of a conman.
There is NO deadline to buy!
And an offer sounds too good to be true, always is.
- Never buy over the phone.
Never provide your credit card number over the phone, especially if you have never met the person on the phone.
You never need to provide a social security number to receive a quote.
- Always get any offer in writing!
Never agree to any extended warranty without seeing the paperwork.
Any legitimate company will be willing to send you the contract to review.
Any company that says it never sends contracts until the customer has paid is definitely a scam.
For More Information
For more information about unwanted telephone marketing calls or the do-not-call rules, visit the FCC's telemarketing website or www.fcc.gov/encyclopedia/do-not-call-list.
For information about other communications issues, visit the FCC's Consumer website, or contact the FCC's Consumer Center by calling 1-888-CALL-FCC (1-888-225-5322) voice or 1-888-TELL-FCC (1-888-835-5322) TTY; faxing 1-866-418-0232; or writing to:
Federal Communications Commission
Consumer and Governmental Affairs Bureau
Consumer Inquiries and Complaints Division
445 12th Street, SW
Washington, DC 20554
And please let us know about any suspicious calls or emails you receive. We look for patterns so that we can alert the authorities and victims to new scams, before it is too late!