Tips & Advice Regarding Auto Warranty Solicitations
[June 3, 2009 – Nashville, TN] Because major auto manufacturers such as Chrysler and GM are either contending with bankruptcy or fighting off the threat of bankruptcy, there is currently a lot of confusion surrounding the status of auto warranties. BBB is concerned that consumers are particularly susceptible right now to deceptive telemarketing phone calls and other solicitations that seem to be coming from their manufacturer regarding the status of their warranty.
What is going on?
People across the country are getting solicitations by phone, mail and e-mail claiming that their auto warranty is about to expire and they needed to act immediately to avoid a lapse in coverage. They are often led to believe it’s their manufacturer contacting them when, in fact, these companies have nothing to do their manufacturer.
What are they selling?
- Complaints and reports to BBB against companies selling extended auto warranties rose by more than 40 percent in 2008.
- More than 140,000 people contacted their BBB in 2008 to confirm the legitimacy of companies soliciting extended auto warranties.
- BBB staff also report receiving these calls in Spanish.
Who’s doing something about it?
- These companies are actually selling extended service contracts, essentially health insurance for your car if something should break.
- However, some people are complaining to BBB because they actually bought a service contract and found that there were many caveats and exemptions and it didn’t cover the work they needed on their car.
- BBB has issued several warnings about these solicitations.
- New York Senator Charles Schumer and Virginia Senator Mark Warner have called on the FTC (Federal Trade Commission) to crack down on these calls.
- The FTC has announced that they will be filing lawsuits shortly on several companies.
- There are estimates that 30 to 40 state regulators—typically Attorneys General—are currently investigating
- Verizon Wireless sued two companies in 2008 which settled out of court in April 2009, and announced a new lawsuit against three more companies saying the companies were responsible for 2 million calls to Verizon customers.
- Make sure your home and cell phone numbers are on the Federal Do Not Call list: www.donotcall.gov
- By FCC (Federal Communications Commission) regulation, the use of auto-dialers and recorded messages to cell phones is illegal and cell phone users should file complaints if they receive such calls—even if their cell number is not on the Do Not Call List.
- File a complaint with your state Attorney General, your BBB at www.bbb.org and the FTC at www.donotcall.gov.
- Not all companies selling extended service contracts are misleading consumers or violating Do Not Call lists; before buying an extended service contract for your car, check the company’s reliability report for free at www.bbb.org.
The BBB of Middle Tennessee, Inc. was founded in 1961 as a non-profit Tennessee organization serving 38 counties in Middle Tennessee and 7 counties in Southern Kentucky. The first BBB was founded in 1912. Today, BBBs serve communities across the U.S. and Canada.
Serving as the 'ethical gatepost' of our communities, BBB fosters and promotes ethical business practices and self-regulation standards that build consumer trust in the marketplace. BBB services include business reliability information, complaint resolution services and consumer and business educational information. In 2008 BBB Nashville handled over 4.0 million services requests via our web site www.Nashville.BBB.org.
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