Beware Extended Car Warranty Scams

By on July 7, 2017

Letters and calls from automobile manufacturers may not be from them.

A common extended warranty scam victimizes auto owners by selling them insurance they don’t need with false claims that their manufacturer warranty expired or is about to. Often, consumers will receive letters that convincingly pretend to be sent by either the dealer or manufacturer, warning that a warrant is about to expire and pitching an extended warranty.

In July 2016, the Federal Trade Commission began distributing restitution to consumers victimized by such a scam by Dolce Group Worldwide, which sold bad insurance to consumers by using robo-calls and pretending to be affiliated with the manufacturer.

 

Often, letters will include vehicle identification numbers, use language implying a pre-existing relationship, and urge quick action. The letters may:

  • Claim to be from the “Vehicle Services Department,” to get consumers to believe it’s an official manufacturer or dealer letter.
  • Include personal and vehicle information to show familiarity and to falsely indicate past business.
  • Misrepresent the expiration date of the consumer’s vehicle warranty or service contract.
  • Suggest a past relationship by claiming that that the customer has not contacted the insurer to have their service contract “updated” or their repair coverage “extended,” implying this should have been done.

Better Business Bureaus say the scam is a common one, and suggest that consumers not sign up on the phone, never agree to a contract without seeing reading it first, and call the manufacturer to check if a letter or call is legitimate (do not call the number on the letter, find the right number online).