What to know if you’re getting unwanted calls about extended auto warranties

After announcing a settlement in a case against American Vehicle Protection, the Federal Trade Commission offered consumers some important advice if they’re receiving unwanted calls about extended auto warranties.

The FTC charged American Vehicle Protection last year with running a telemarketing extended auto warranty scheme that cheated people out of more than $6 million.

According to the FTC, the company cold-called people, lied about being affiliated with car manufacturers or authorized dealers, and misrepresented the terms of the extended auto warranties it was selling.

The company claimed to offer “full vehicle” protection and reimbursements within 30 days if people were unsatisfied. But the written contract — which it would only send after you paid a down payment — listed lots of exceptions. And the option for a refund within 30 days was really hard to get.

So if you are thinking about getting an extended auto warranty?

• Get the coverage in writing before you pay. Make sure what the seller has told you matches what’s written in the contract. Few auto service contracts cover all repairs and maintenance.
• Think twice before buying an extended auto warranty from a telemarketer. They may have no connection to your car’s manufacturer or an authorized dealer, even if they claim to.
• Check if the company has a good reputation. Search for their name and words like “review” or “complaint” to see if people have had issues in the past.

Getting unwanted calls about extended auto warranties? Tell the FTC: ReportFraud.ftc.gov.