FTC Hits “Extended Vehicle Warranty” Scammers

By Michael B. Cohen

Vice President of Global Operations

The Federal Trade Commission (FTC) has announced a settlement with a group of scammers who used robocalls and deceptive mailers to trick consumers into buying fake “extended vehicle warranty” plans. The FTC alleged that the defendants violated the Telemarketing Sales Rule and the FTC Act by making false and misleading claims about their plans, which were actually worthless service contracts that did not cover any repairs or maintenance. The defendants also failed to disclose the material terms and conditions of their plans, such as the fees, exclusions, and cancellation policies.

As part of the settlement, the defendants are banned from telemarketing, selling vehicle service contracts, and using robocalls for any purpose. They are also prohibited from misrepresenting any goods or services and from profiting from or sharing their customers’ personal information. The FTC has imposed a judgment of more than $18 million against the defendants, which will be partially suspended due to their inability to pay. The FTC will use the remaining funds to provide refunds to affected consumers.

The FTC advises consumers to be wary of any unsolicited calls or mailers that claim to offer extended vehicle warranty plans. Consumers should research the company and the plan before signing up and should never give out their personal or financial information to unknown callers. Consumers can also report unwanted calls to the FTC’s Do Not Call Registry at donotcall.gov or 1-888-382-1222.

If consumers have already paid for a fake extended vehicle warranty plan, they may be able to recover their money by contacting MyChargeBack.com, a global fund recovery consultation service that specializes in helping victims of online scams. MyChargeBack.com can assist consumers in filing a chargeback request with their bank or credit card company and can provide expert guidance and support throughout the process.