Attorney General: Attorney General Warns Of Extended Warranty Scam; Says Investigation Is Pending

Connecticut Attorney General's Office

Press Release

Attorney General Warns Of Extended Warranty Scam; Says Investigation Is Pending

March 6, 2008

Attorney General Richard Blumenthal today warned consumers about a massive deceptive marketing campaign attempting to sell extended auto warranties that has targeted countless citizens nationwide on their cellular phones and landlines, as well as through postcards, letters and emails.

The marketers offer to sell outrageously priced extended warranties, and often "phish" for personal information about the consumer.

Blumenthal's office has received complaints against numerous companies involved in the scam, including National Auto Warranty Services of Missouri, Consumer Protection Services of Missouri, Auto One Warranty of California, Great Atlantic Warranty of Florida, Warranty Activation Headquarters of Missouri and Automotive Warranty Advisors of Florida.

"My office is helping to lead a nationwide investigation, involving 20 states, in seeking to stop this scam," Blumenthal said. "This pitch is particularly egregious when it targets consumer cell phones, costing them time as well as money for their phone minutes. Consumers should immediately hang up if they receive such calls, and beware of any offers of extended warranties.

"We will relentlessly investigate this campaign to identify the culprits, stop the calls and pursue any possible penalties and other remedies."

The marketing mailings may appear to be an important notice from the consumer's car dealer or automaker. There is always an eye-catching warning on the front of the card, such as: "Final Notice: Expiring Auto Warranty."

Whether by phone or mail, the marketers warn that the consumer's car warrant is about to expire, and urge the consumer to call a toll-free number or push a button to be connected to a representative in order to renew their warranty.

In reality, these pitches are scams to lure consumers into unnecessary and questionable warranties, and possibly to provide personal confidential information.

Blumenthal's office has received countless calls from consumers who have received pitches, and his office has also received direct repeated calls from the scam marketers making their pitches.

Blumenthal provided consumers the following tips and warning signs:

  • Beware of any mailings that appear to come from your automobile manufacturer offering extended warranty coverage.

  • Never give out personal financial information such as bank account numbers or Social Security Numbers over the phone.

  • When considering an extended warranty, or any other telephone or mail solicitation, always insist on getting the complete terms and conditions of your agreement in the form of a written contract before you agree to sign up, pay any money or provide your credit card information.

  • Never give out personal financial information such as bank account numbers, credit card numbers of Social Security Numbers over the phone, unless you are absolutely positive that you know the party with whom you are dealing.

  • The Federal Trade Commission says consumers, before signing any extended coverage contract, should fully understand its terms and coverage. The agency also stresses that what consumers are actually buying is not an extended warranty but a "service contract." "A service contract is a promise to perform, or pay for, certain repairs or services. Although a service contract is sometimes called an extended warranty,' under federal law, it is not a warranty," the FTC said. "A warranty comes with the original price of the car, whereas a service contract costs extra. It is mainly this separate and additional cost that distinguishes a service contract from a warranty."

  • There are many things to consider when you're offered an "extended warranty" or service contract." Consumers should beware that certain "extended warranties" do not always provide the peace of mind and financial protection that consumers expected. Many of these contracts, when closely scrutinized, exclude so many items that they really provide very little coverage for outrageous prices.

  • Check out a business with your state Attorney General's Office and your local Better Business Bureau before you agree to do business with them.



Content Last Modified on 4/7/2008 12:54:07 PM