Auto Warranty Scams Abound

April 20, 2009
Special Feature

Thousands of consumers across the country are getting automated scam phone calls claiming that their automobile warranty is about to expire and that they are being offered a "last chance" to renew.

They call at all hours. They ignore the Do Not Call registry. And what they’re peddling are mostly bogus extended service contracts. Thousands of consumers across the country are getting automated phone calls claiming that their automobile warranty is about to expire and that they are being offered a “last chance” to renew. Auto warranty scammers also use direct mail, newspaper ads, and TV commercials to lure auto owners into high-priced contracts that often turn out to be worthless.

If you respond to the phone call, you’ll be connected to a representative, who will probably hang up on you if you ask questions like whether the warranty covers the 10-year-old clunker in your driveway. If you follow the rep’s script, you are likely to be asked for personal information like credit card and bank account numbers or your Social Security number. Ask for a copy of the policy to review before you buy and the rep will probably tell you that the company won’t do that without an upfront down payment. The Better Business Bureau, which has reported a spike in complaints against auto warranty companies, advises against doing that and suggests that you check out the company with the BBB.

Doing that may not be easy. The phone scammers will often refuse to tell you the company name, and the phone number that shows on your Caller ID is probably faked, or “spoofed.” For the same reasons, filing a complaint with the Federal Trade Commission may be difficult, since the FTC’s complaint form asks for the name and phone number of the offending company. For now, the best advice seems to be to ignore auto warranty phone calls.