Due to the fact 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 Serving Western Virginia 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.
Consumers across the country are receiving solicitations by phone, mail and e-mail claiming that their auto warranty is about to expire and they need 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 with the manufacturer.
- Nationally, complaints and reports to BBBs 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.
What are they selling?
- 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.
Who’s doing something about it?
- 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.
BBB offers the following tips:
- Make sure your home and cell phone numbers are on the Federal Do Not Call list: www.donotcall.gov or 888-382-1222.
- By FCC (Federal Communications Commission) regulation, the use of auto-dialers and recorded messages to cell phones is illegal. 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 the Attorney General (804-786-2071), 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.
If you have questions or concerns, contact your BBB at (540)342-3455 or on the web at www.vawest.bbb.org.