The sense of urgency is as intense as rush hour traffic on the way to work.
A woman who says her name is Shasta calls and says your warranty is up for renewal. “I’d like to congratulate you on your $1,000 instant rebate and free maintenance and oil change package for being a loyal customer,” according to the recorded robocall.
Or the robocall from Vanessa claims to be from the dealer service center and says she’s making “one final courtesy call” before your extended warranty expires.
Some even offer discounts to get the deal done. Mention this letter, according to a recent mailing, and you’ll get $200 off. It’s your final notice.
But you’ve got to act now. Right now. Or else.
Many drivers dread the day they’re looking at a four-figure repair bill when their car or truck is no longer under warranty — and the scammers know it.
The top consumer complaint to the Federal Communications Commission for each of the last two years involved “auto warranty” scam robocalls.
Maybe they aren’t connected to your car dealer after all
Some fraudsters pretend to represent the auto manufacturer or car dealer. But they don’t really. And they may claim to provide extensive “bumper-to-bumper” coverage but coverage could turn out to be far more limited than they’re implying.
We’ve gotten dozens of these calls over the years. Some consumers who complained to the Better Business Bureau in 2022 about one company say they received calls almost daily pitching an “extended auto warranty.”
Sometimes, callers can sound legitimate because they know the age or make and model of your car. Other times, they shoot themselves in the foot because they’re saying your warranty has expired when it hasn’t.
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Amy Nofziger, director of victim support for the AARP Fraud Watch Network, said one of the biggest problems with an auto warranty scam is consumers don’t know they’ve been scammed until very little or even nothing is covered when the car breaks down.
“They don’t realize they bought something that wasn’t worth anything until they’re at the car dealership saying ‘I have an extended warranty. Here it is.’ And the car dealership says this is nothing of value; you can’t use it here.”
Thad Szott, a partner of the family-owned Szott Automotive Group, said all of the group’s five dealerships in metro Detroit face this issue at least once a month.
Many times, he said, the customer who thought they bought a good extended warranty on the phone is an older adult age 60 and up.
Often, he said, the driver might have limited coverage but nothing close to what they think they bought after a robocall or getting a notice in the mail.
“They actually do have ‘some’ repair coverage but it’s never to the level of the consumers’ expectations, ‘meaning it covers way less components than they had previously thought,” Szott said.
The robocalls, he said, are a huge problem.
Many robocalls for auto warranties are illegal without the consumer’s consent unless, according to the Federal Trade Commission, the company trying to sell you something got written permission, directly from you, to call you with robocalls.
The robocalls that are allowed under FTC rules without your include political calls about candidates running for office or charities asking for donations.
The FTC took action in federal court February against third-party marketer American Vehicle Protection Corp. and charged that the defendants allegedly blasted consumers will illegal calls, made bogus claims on the extent of coverage, misrepresented their affiliations and “bilked consumers out of more than $6 million over the last four years.”
Telemarketers, according to the complaint, told a Ford owner he was calling from “Dealer Services” about his Ford Focus. Another AVP telemarketer told a Jeep owner that he was with “Chrysler/Jeep Dealer Services.” But the noted complaint: “In truth, defendants are not affiliated in any way with any automobile manufacturers or dealers.”
Many consumers were on the National Do Not Call Registry.
“The truth is that the warranties didn’t come from the manufacturer, didn’t cover the repairs people needed, and weren’t sold legally. We are holding AVP accountable,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
Consumers filed dozens of complaints against American Vehicle Protection with the Better Business Bureau in recent years. One consumer stated “false sales tactics (were used) to get credit card (numbers) and then you can never contact them to cancel.” The company resolved the issue and responded at the BBB, saying a refund was issued and the policy was canceled. The customer responded favorably after the action was taken.
Mitchell Roth, an attorney for American Vehicle Protection and other defendants in the case, told the media in February that AVP shut down operations after learning of the FTC’s complaints.
AVP extensive implemented changes, he said, to sales practices to ensure compliance with the law. Roth’s clients filed suit against the FTC claiming that, under a recent Supreme Court decision, the FTC has no power to seek financial relief from the company.
“AVP is committed to complying with all laws and finds it unfortunate that the commission chose to pursue its lawsuit notwithstanding the changes that it implemented and notwithstanding the limits imposed on its powers by Congress as described in AVP’s lawsuit,” Roth said then in a statement .
Another auto warranty robocall marketing program was targeted in July when the Federal Communications Commission’s enforcement bureau ordered phone companies to stop carrying the auto warranty related robocall traffic from this group.
The FCC stated that more than 8 billion calls wrong since 2018 came from Roy Cox Jr., Aron Michael Jones, their Sumco Panama companies and international associates.
Regulators are looking to hold the telecommunications industry accountable. Most scam robocall traffic originates overseas and taps into so-called gateway companies, who profit by enabling such illegal robocalls to be made. Many small voice-over-Internet Protocol service providers, according to regulators, are “honest businesses, but a few are complicit in facilitating the fraudulent calls.”
How to complain
Consumer watchdogs warn that scammers at the very least are trying to get personal or financial information from you, possibly hoping to trigger a payment.
Even just returning a call can confirm a live number — and you could end up receiving a text about some other scam pitch, say that your Amazon account has been locked due to “unusual activity.”
Verizon, which says it has blocked delivery of more than 11 billion spam texts to wireless customers from senders misusing its platform, recommends that consumers report a spam text by forwarding the message to 7726 (SPAM) from your mobile phone.
“Never respond to or click on a link in a message you are not expecting.”
Or you can report the spam text message or auto warranty scam to the FTC at ReportFraud.ftc.gov.
The Michigan Attorney General is taking complaints about robocalls through an online complaint form. See www.michigan.gov/ag and click on “Robocall Crackdown” at the bottom of the page.
If you have an audio recording of the robocall you’d like to provide, you can send it by email to AG-Robocalls@mi.gov.
Michigan joined a nationwide Anti-Robocall Litigation Task Force of 50 attorneys general to investigate and take legal action against telecommunications companies that enable bad actors to make illegal robocalls in the United States.
When it comes to all sorts of robocalls, it’s estimated that almost 60 million Americans lost more than $29 billion to scam callers last year, according to the National Consumer Law Center and Electronic Privacy Information Center.
Consumers can lose to thousands of dollars
Some consumers reported paying around $3,000 to $3,500 on some car warranties that didn’t amount to much. Some warranties offer a low down payment of $100 or so to “lock in” the offer.
Or you might be told you can pay $120 a month and can cancel at any time but consumers report difficulty getting a phone call through and getting their money back.
One trick in the scam is not to make the purchase price so high that no one would buy it.
Sometimes, the pitch includes discounts to veterans or people in the area, or Nofziger said she even heard of a case of the person selling the warranty offering a discount because they claimed they liked the kind of car the consumer drives.
“We are a society that is dependent on cars,” Nofziger said.
Criminals play on our fear of high repair costs, including the supply chain issues that lead to delays and higher costs for parts.
“They’re selling ‘peace of mind,’ obviously, it’s a fake peace of mind,” she said.
In general, consumers who want an extended auto warranty to shop on their own and not simply react to the latest robocall or letter in the mail.
Some experts suggest reconsidering any warranty that would only apply for work done at a specific dealership. What happens if you need a repair somewhere else? Will you be reimbursed?
Read the fine print of any offer. Many extended warranties won’t cover all repairs. Get a copy of the contract before sending any money and read it for disclaimers.
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A warranty might not do you any good if it only pays for the water pump when you ultimately need a costly new engine that isn’t covered.
Szott, who is also president of the Detroit Auto Dealers Association, said extended warranties on vehicles are often a good choice. But he recommends talking with a trustworthy dealer and talking to their extended warranty specialist.
“There are many options to customize warranties, which eliminates wasted mileage or wasted years and that saves cost,” Szott said.
Understand what is going to be covered and what isn’t. Do not just sign up for an extended auto warranty because you got a call or something in the mail.
“Have a good dose of skepticism,” Nofziger said. “I just got one (in the mail) yesterday for a car. I don’t even have any more. That certainly hit the shredder.”
ContactSusan Tompor via email@example.com. Follow her on Twitter@tompor. To subscribe, please go to freep.com/specialoffer. Read more on business and sign up for our business newsletter.