Consumer Law

Scam Alert: "Robocalls" to Extend Your Warranty

A federal judge put a halt to operations by a telemarketer that pitched deceptive extended auto warranties to consumers nationwide through prerecorded phone messages, or robocalls. A Federal Trade Commission (FTC) lawsuit alleged the telemarketer blasted robocalls that falsely warned consumers their car warranties were about to expire.

According to the FTC, the telemarketer lied about being affiliated with consumers' car companies and sold extended car warranty services that did not live up to promises of "bumper-to-bumper" coverage. The judge in the case granted the FTC a temporary restraining order that froze the telemarketer's assets and appointed a receiver to take over the company.

Under FTC rules, it's illegal for most businesses to call you with prerecorded telemarketing messages— robocalls, without your written permission. If you receive unwanted prerecorded telemarketing calls, file a complain with the FTC at or by phone at 1-888-382-1222.

Origianal Article

"This is a limited time offer! Act now! Your warranty is about to expire! It's important that you contact us immediately!" The street hawkers of yesterday are the automated auto warranty callers of today. Their tone is still urgent, their warnings compelling. You may be tempted to dutifully answer their call by pressing the number on the telephone. But beware, if you do so, you've entered into the telemarketers' realm.

The FTC vs. the Predators

The Federal Trade Commission (FTC) has filed a lawsuit against three telemarketing companies. The FTC is claiming the companies used deceptive practices by using automated calls urging consumers to extend their automobile warranties. The FTC warns that these calls are disregarding the federal "Do Not Call" Registry, which was started in 2003. The FTC says the Registry is still a valuable tool to protect consumers against scams and unwanted hawkers. The FTC has declared it will continue to prosecute any telemarketing firms which disobey the Registry.

If you have answered these calls, which are termed "robocalls," you've been urged to purchase "extended warranty" coverage for $2,000 to $3,000. The "coverage" is deceptively portrayed as an extension of the original vehicle warranty. You are often subjected to abusive behavior by the telemarketing companies, especially when you ask that the calls stop.

Tracking the FTC Action

Check the FTC Web site to learn how to make a claim if you've been a victim of these robocalls. You'll likely never have to appear in court or in the court action, but you'll have to keep in contact with the FTC litigation department. They'll ask you for details about the calls, the money you lost, and your name and address.

The FTC hopes to get money back for people who have lost money in these scams. The FTC estimates that there have been over 1 billion "robocalls" since they were first detected by the FTC in 2007. The FTC estimates that the telemarketing companies using these methods have raked in more than $10 million on the sale of the deceptively marketed sales contracts.

Safeguard Your Private Information

You may be fooled by the official-sounding messages which are meant to sound as if they are coming from the car manufacturers. In reality, car makers use more reliable means to contact you if your warranty coverage is expiring or is somehow in jeopardy. Such an urgent matter wouldn't be left to chance phone calls by the car makers.

If you're in doubt as to the validity of such a call, contact your car dealer or the car maker about it. Save the literature and receipts from your car and car warranty purchases. Research the issue of whether it is economically feasible - or even possible - to extend your warranty coverage, especially through a company other than the issuer of the original coverage.

Never give your personal information, such as bank account numbers and credit card numbers, to anyone you don't know, especially over the phone or to an automated call. Once you've released that information, you can't be sure how it'll be used. Additionally, you'll likely have difficulty tracing the identity and location of the "robocaller" and may be left with no legal options to get your money back.

If you have released your financial information to a "robocaller," contact your bank immediately and take whatever steps you can to halt the payment. You also might attempt to contact the local police or the local prosecutor's office, but it'll be difficult to press charges given the ease with which such telemarketers can disappear without a trace.

Questions for Your Attorney

  • Can authorities track down the robocall scammers? Are there any lawsuits, criminal or by consumers against these scammers?
  • I get calls from the car warranty "robocall" scammers on a regular basis, and I filed an FTC complaint. What can I expect to happen after filing an online FTC complaint?
  • Can telemarketers just say that a consumer agreed to something, such as an extended warranty? What if the consumer just hangs up the phone without saying "no"? Could a telemarketer say that lack of a negative response means acceptance?
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