Car Warranty Scam ¶
By: WhosBeenCalling.com on Feb. 16, 2021, 5:18 p.m.
If you get a call or letter saying that your new car warranty is about to expire and it offers you an "extended warranty," use caution. Car warranty scams, which attempt to trick consumers into buying vehicle service contracts, continue to plague consumers despite government efforts to crack down on the caper.
The Federal Trade Commission announced earlier this week that it was mailing more than $4 million in refunds to nearly 6,000 consumers who the agency said were conned by a company that used robocalls to hawk service contracts costing from $1,300 to nearly $2,900.
The FTC says the Miami-based company tricked consumers into believing that the calls were from their vehicle manufacturer or car dealer, a common tactic in car warranty scams.
Those who purchased the service contracts found that the coverage was far less than represented, the agency says. For instance, it says, the policies didn't provide bumper-to-bumper protection or cover the entire vehicle engine, as customers were led to believe. Those who tried to obtain refunds found it virtually impossible.
This is not the first case of its kind. In 2011, the agency announced it was returning nearly $3.2 million to 4,450 victims of two other telemarketing companies that it accused of using deceptive practices to sell auto warranties.
Although the refunds announced this week are from a 2011 settlement between the FTC, the company and its principle executive, the car warranty scam is alive and well, say the Better Business Bureaus based in West Palm Beach and St. Louis, where many warranty marketers are located.
"We have many, many complaints. We continue to get them," says Bill Smith, investigator for the St. Louis BBB.
Along with phone calls, some warranty marketers mail bogus warranty expiration notices disguised to look as though they're from manufacturers, dealers or state motor vehicle departments, says Smith. They advise recipients to call for details about extending their coverage.
Do you suspect you were targeted for a car warranty scam?
Tell us what happened in the comments section below.
"These people get you on a phone, and they will not let you go until they have sold you on a deal," he says.
Who is behind the scam and what is being done about it?
June 16, 2009: Fox News is reporting that there there are three companies; Transcontinental Warranty, Voice Touch and Network Foundations behind the scam. The scammers behind this deplorable act are alleged to be:
James Allen Dunne (36, of Daytona Beach, Florida owns Florida-based Voice Touch). Fox News reports he has a criminal history including charges of trespassing, battery, filing a false report of a bomb and firearm violations,
his wife Maureen Dunne, and
Kamian Kohlfeld (35, of Valparaiso, Indiana,owns Chicago-based of Network Foundations)
Christopher Cowart, (47, of Fort Lauderdale, Florida owns Delaware-based Transcontinental Warranty). Cowart claims to be misled by James Dunne into using the robodialing services)
May 18, 2009: Here's the latest: the federal government, lead by Senator Charles Schumer, are suing one of the major companies behind this despicable scam! Meanwhile, the FTC has sued the scum behind these calls. These bozos made the mistake of harassing the senator and other congressmen with the same annoying calls that the rest of us receive!.
May 14, 2009: The FTC has filed an injunction in the United States District Court for the Northern District of Illinois, Eastern Division against a major robo-calling company:
Voice Touch, Inc., a Florida corporation, doing business as Voice Touch; Network Foundations, LLC, a Delaware corporation;
James A. Dunne; Maureen E. Dunne; and Damian Kohlfeld, Defendants
The FTC's complaint alleges violations under the FTC's Telemarketing Sales Rule by calling consumers who were listed on the national "Do Not Call" registry. It also claims other deceptive practices, including concealing their phone number, failing to identify themselves to consumers and failing to disclose the call was a sales pitch.
"Scum" is too kind a word to describe the actions and behaviors that these companies and individuals are accused of. Some of the defendants used offshore shell corporations to try to avoid scrutiny, and a top officer in the telemarketing company bragged to prospective clients that he could operate outside the law without any chance of being caught by the FTC, the papers filed in court stated. According to the FTC, this defendant also claimed that he makes 1.8 million dials per day and that he had done more than $40 million worth of dialing for extended warranty companies, including one billion dials on behalf of his largest client.