Auto Warranty Phone Calls Raise Attention

The cell phone chirps and numbers appear on the screen. With reluctance, it is answered and what follows appears to be a possible scam. “Your auto warranty is now up”, the pre-recorded message says. Ironic… since the person answering the cell phone does not even own a car.

What are these scams? Are they scams? How do they get your number? And who offers a legitimate auto warranty?

These are questions prompting forty state governments and one U. S. Senator to look for answers.

For several years people tell the Better Business Bureau, the office of Consumer Affairs, and the Federal Trade Commission, that the calls keep coming (seemingly non stop) daily. There appears to be a random call pattern, reaching all ages, sex, race, in all states, and even non car owners.

With the trend in the economy and the closure of chains like Circuit City, which offered (and honors) extended warranties added to the current concern over U.S. auto makers, it’s no wonder people are attuned to the warranty issue. Con artists- as well as legitimate warranty companies- are taking advantage of the confusion.

So let’s break it down. Are they scams? Some are. Some aren’t. Even the legitimate companies certainly have limits on what is covered and may even charge for some claims. The cons use the mail and the internet and the phone. A quick call may make people believe they are simply renewing an existing warranty or your car has a recall and you must act fast (renew right now on the phone) to stay covered. Later, the remorse sets in after giving the card number and paying when the victim actually tries to use the warranty and learns it doesn’t really exist. In other cases, the quick purchase may make the consumer believe they are covered, when, in fact, fine print talking about mileage, wear and tear, and non covered items paints a useless picture.

How do they get the number to call in the first place? Some are the result of auto-dialers that call (like a fisherman) waiting for a bite. Others, use lists sold by credit reporting agencies, sweepstakes or prize entry forms or companies you gave (by not checking out the privacy clause) permission to share your number.

The attention is starting to mount and South Carolina Department of Consumer Affairs issued a release on the subject on May 7, 2009. The release warns that consumers “shouldn’t be alarmed or pressured into a warranty they may not need or want”. U. S. Senator Charles Schumer (Democrat New York) says, “Unsolicited calls to home and cell phones warning of a final notice and an expiring vehicle warranty are a nuisance and harassment and should be the subject of a federal investigation”. Yet the Federal Trade Commission, keeper of the do not call list, has not posted such a warning so far.

Consumers tell the Better Business Bureau, Southeast Atlantic, they want the calls and mail stopped but even when they ask some callers to stop… it does no good.

So what steps can be taken?

1. Tell them take you off the list and stop harassing you and that you will keep a record of future calls.
2. Ask for a name and street address for the company calling so you can report them to the proper authorities. Write down the time called and name of individual who called you.
3. Don’t give out debit or credit card numbers. Instead, ask the caller to send information in writing for you to review.
4. Subscribe to the FTC Do Not call list at 888-382-1222.

If you are interested, consider the following:

1. Your dealership may offer a third party warranty. It may or may not be right for you, but you will know you are dealing with a real company.
2. The internet may give you options for cheaper coverage but use caution and check the company out.
3. Use the BBB and BBB online as well as A. M. Best to get a report on the company.
4. Contact your ASE certified mechanic and see if there is a recommendation from “your” mechanic.
5. Review the paperwork, coverage, limitations, the contract, added charges, cancellation policy and the costs.
6. Compare the costs of the most expensive repair to the price (over length of contract) of the warranty to see if it is worth it.
7. Consider peace of mind with loved ones in a reliable car but be realistic and recognize when it’s time to buy a new car too.

If you have a 10+ year old car with 200+thousand miles, don’t waste the money on the warranty; use it instead for a down payment on a new car. Remember, you can always hang up the phone and don’t fall prey to the warranty come on!