Right before dinner you receive a phone call. According to the caller ID, it seems legitimate. So you pick up. You’re immediately assaulted by a fast-talking sales representative who claims your car warranty is about to expire. He’s offering a low-cost extended warranty and service contract. The guy even knows your name. You need to decide right now. Otherwise, the offer will expire.
Is the call legitimate?
Probably not. Thousands of consumers have been bilked by telemarketers claiming to represent auto manufacturers, dealers or state motor vehicle departments. Several years ago, the Federal Trade Commission (FTC) filed a complaint in a Florida district court on behalf of consumers bombarded with illegal robocalls and tricked into paying thousands of dollars for bogus “extended auto warranties.” In the end, the FTC refunded over $4.2 million to nearly 6,000 people.
If you receive a phone call, email or postcard urging you to extend your car warranty or buy a service contract, take these steps:
- Contact the manufacturer. Call and find out what’s covered with a legitimate factory warranty, as credible, trained mechanics will attend to needed repairs. Don’t expect such assurance from third-party warranty providers.
- Check out the company. Start with the Better Business Bureau, then dig a little deeper. If people have been scammed by this particular business, they won’t keep quiet. Don’t fret over a few bad reviews, but if the internet’s brimming with grievances, be wary.
- Get the details. Never send money or provide personal information without taking time to review the terms and conditions of any service contract or warranty. If the caller won’t send a copy, hang up.
- Consider other options. Make a plan. Buy a reliable car and maintain it according to the manufacturer’s instructions. Set aside money each month to cover repairs and maintenance so you’ll have cash to service your vehicle — without a contract.