The Federal Trade Commission announced a settlement Friday in its case against American Vehicle Protection – who it charged last year with running a telemarketing extended auto warranty scheme that cheated people out of more than $6 million.
“AVP misled consumers about who they were and what they were selling and called a large number of consumers who were on the FTC’s Do Not Call List,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “Today’s order banning five defendants from the industry and imposing a monetary judgment of $6.6 million continues the Commission’s aggressive crackdown on telemarketing fraud.”
American Vehicle Protection cold-called people, lied about being affiliated with car manufacturers or authorized dealers, and misrepresented the terms of the extended auto warranties they were selling, according to the FTC.
They claimed to offer “full vehicle” protection and reimbursements within 30 days if people weren’t satisfied. But the written contract – which they’d only send after you paid a down payment – listed many exceptions. And the option for a refund within 30 days, was really hard to get.
Thinking about getting an extended auto warranty? The FTC offers these tips to consider before you sign up:
- Get the coverage in writing before you pay. Make sure what the seller has told you matches what’s written in the contract. Few auto service contracts cover all repairs and maintenance.
- Think twice before buying an extended auto warranty from a telemarketer. They may have no connection to your car’s manufacturer or an authorized dealer, even if they claim to.
- Check if the company has a good reputation. Search for their name and words such as “review” or “complaint” to see if people have had issues in the past.
So, if a telemarketer offers you a great “deal” for bumper-to-bumper coverage, beware. It’s likely a scam.