Spot Auto Warranty Scams

If you have an automobile warranty, you may start receiving calls about extending it. What these people are actually trying to sell you are “service contracts” which don’t provide as many benefits as warranties. Most likely, the deal is a scam, with most repairs excluded by the fine print on the service contract. To protect yourself from an auto warranty scam, avoid doing business with someone who contacts you. Never share personal information, such as your Social Security Number, and file a complaint with appropriate government agencies if you’ve been swindled.

Steps

Identifying the Scam

1. Use caution when someone contacts you. A scammer might call you, send you a letter, or write an email. The scam is always the same: they claim that your warranty is about to expire and they offer to sell you an extension.
   • Don’t be impressed by the details the scammer knows. For example, they might know the make, model, and year of your car. However, scammers can buy this information from websites. You might have provided this information when you shopped for auto insurance online.
   • Ideally, you shouldn’t do business with someone who contacts you. Instead, research companies thoroughly and then reach out to the ones you find are reputable.
2. Check your warranty. Is your warranty about to expire? Check to make sure. Go through your paperwork and find it. If you can’t find the warranty, contact the manufacturer.
   • Check the manufacturer’s number online or in the phone book. Don’t call the number provided on the letter, email, or postcard, since this might be a number created by the scammer.
3. Identify high pressure sales techniques. If you do talk to a scammer on the phone, they will try to pressure you into buying an extended warranty policy. For example, they might use the following techniques:
   • They tell you the deal is good for only one day. At the same time they claim you can cancel at any time. This type of technique is a huge red flag. Legitimate businesses do not try to pressure people into purchasing something by creating a sense of urgency.
   • They call day after day. This type of behavior, which borders on harassment, is a high-pressure sales technique.
   • They avoid showing you a sample contract. There’s no reason for a reputable company to hide this information.
4. Research the company. Scammers develop a reputation, and you can quickly find customer complaints by searching online. Look at the Better Business Bureau or do a general Google search. Look for complaints that the extended warranty didn’t cover what consumers thought it would.
5. Hang up on the caller. You might find it stressful to be hounded by someone employing high-pressure sales techniques. If so, remember that you can hang up on them. You aren’t obligated to do business with anyone, and it isn’t rude to say, “I’m sorry, I’m going to hang up.”
   • As a reminder, never share personal information with someone who has called you over the phone. For example, avoid sharing your credit card information, driver’s license number, or Social Security Number.
   • If they call back, ask for the number to request that they stop calling you. Legitimate telemarketers are required to give you a number.

Filing a Complaint

1. Complain to the Federal Communications Commission. Visit the FCC’s Consumer Complaint Center here: https://consumercomplaints.fcc.gov/hc/en-us. Click on “Phone” or “Internet,” depending on how the scammer contacted you. Then provide basic information about your complaint.
   • The FCC can’t sue and get money on your behalf. However, they can investigate and, if necessary, fine the scammer.
2. File a complaint with the FTC. The Federal Trade Commission also investigates suspected fraud. You can use their Complaint Assistant at their website to report the scammer.
   • Like the FCC, the FTC won’t bring a lawsuit on your behalf. However, they can investigate and ultimately prosecute the company.
3. Call your state’s Attorney General’s office. Your state’s Attorney Generally can also investigate the business and prosecute them if necessary. Find the Attorney General’s phone number online and provide the following information:
   • name of the scammer
   • their contact information
   • how they contacted you
   • why you believe you have been scammed
   • a copy of the service contract
4. Speak to an attorney. Many scam victims have found it difficult to cancel their coverage and get a refund. To protect your rights, you should meet with a consumer rights attorney and consider your options. You may be able to sue to recover the money you spent.
   • Find an attorney by contacting your nearest bar association and asking for a referral.
   • When you have a name, call the lawyer and ask to schedule a consultation. Check the price and ask what you need to bring with you.

Tips

• If you want an extended warranty, then get one through the auto manufacturer, not from an independent business. Make sure to read the policy closely so that you know what will be covered and what won’t be.
• Many experts recommend not buying service contracts. Instead, you can just save up money in case your car ever needs repairs. If your car doesn’t break down, then you’ve managed to save a nice little nest egg.

References

See also

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