Auto Warranty Scams
Atlanta, GA - Deceptive solicitations for extended vehicle warranties are rampant. They may take the form of telemarketing calls or postcards that appear to come from the vehicle manufacturer warning that your warranty is on the verge of expiring. In many cases, these solicitations are NOT from the manufacturer, nor are they actually offers to extend your existing warranty. Rather, they are solicitations for vehicle service contracts from warranty companies or their marketing partners. Many of these companies use high pressure tactics to try to convince consumers to buy an overpriced warranty.
The Governor’s Office of Consumer Affairs offers the following tips to consumers on avoiding unscrupulous extended warranty companies:
- If you are notified that your vehicle’s warranty is expiring, check to see if your own records substantiate that. If a company has misrepresented your warranty expiration date, beware of dealing with that company.
- Only the manufacturer can extend its original warranty. A separate company can provide you with a vehicle service contract or what they may call an “extended warranty,” but you should understand that it is not a continuation of the warranty you had under the vehicle manufacturer. If a company tells you otherwise, walk away.
- Understand who you are dealing with. Is it the vehicle manufacturer? Is it a separate service contract provider? Or is it a third party who is only responsible for selling the warranty, but not administering it? If it is a marketing company, ask for the name of the company that will be administering the contract. If they won’t provide you with that information, don’t give them your money.
- Check out the company with the Better Business Bureau (www.bbb.org) and the Office of the Insurance Commissioner at 800-869-1123 to see if there have been any complaints lodged against it.
- Make sure you understand what issues would and would not be covered under the contract, clarify any vague or confusing statements, and always ask to see the contract in writing (and read it in full!). If a company says it cannot provide you with anything in writing until the deal is finalized, walk away.
- Evaluate whether the price being offered is really a good deal for you. Consider your vehicle’s age, mileage, the reliability of the make/model, your own track record with the vehicle, and how much you expect to pay on repairs and maintenance in a year. Also, consider any deductibles you would have to pay. Many extended warranties have deductibles on each claim, as opposed to an annual deductible.
- Beware of high pressure sales tactics, such as stating that if you don’t act immediately, the “special” rate you’re being quoted will no longer be available.
- Do not give out your bank account information or social security number over the phone.
If you have been the victim of a deceptive vehicle service contract or solicitation, contact the Office of the Insurance Commissioner at 800-656-2298 or the Governor’s Office of Consumer Affairs at 404-651-8600 or 800-869-1123.
For more information, contact Bill Cloud, Governor’s Office of Consumer Affairs, at 404-656-3790.