Auto Warranty Scams Prey on Consumer Fears
The Better Business Bureau of Eastern North Carolina warns consumers about fraudulent attempts to get them to purchase extended auto warranties.

RALEIGH, NC, June 18, 2009 /24-7PressRelease/ -- The Better Business Bureau of Eastern North Carolina (www.bbb.org) warns that consumers across the country are getting solicitations by phone, mail and e-mail claiming that their auto warranty is about to expire and they needed to act immediately to avoid a lapse in coverage. Consumers are often led to believe it is the manufacturer contacting them when, in fact, these companies are not associated with the manufacturers.

These warranty solicitation companies actually sell extended service contracts. Some of the complaints to BBB are because a consumer purchased the service contract and found that it contained many exclusions and exemptions, and it didn't cover work needed on their vehicle.

"At a time when most consumers are cautious with every cent they spend, it is a shame that businesses are convincing car owners to spend hundreds of dollars unnecessarily," says Beverly Baskin, president and CEO of the Better Business Bureau of Eastern North Carolina. "Even worse, these warranties often do not cover repairs that consumers need to keep their cars running."

In 2008, complaints and reports to BBB against companies selling extended auto warranties rose by more than 40 percent. More than 140,000 people, English and Spanish speaking, contacted the BBB to confirm that they received calls soliciting extended auto warranties.

Not all companies selling extended service contracts are misleading consumers. Before buying an extended service contract for a vehicle, consumers should check the company's reliability report for free at www.bbb.org.

BBB recommends consumers make sure both home and cell phone numbers are on the Federal Do Not Call list: www.donotcall.gov. Even if a cell phone number is not on the list, Federal Communications Commission regulations prohibit the use of auto-dialers and recorded messages to cell phones. Cell phone users should file complaints if they receive such calls. To file a complaint, contact BBB at www.bbb.org, the FTC at www.donotcall.gov and your state Attorney General.

There is encouraging news on the horizon. New York Senator Charles Schumer and Virginia Senator Mark Warner have called on the Federal Trade Commission to crack down on these misleading calls. The FTC has announced that it will be filing lawsuits shortly against several companies. In addition, there are estimates that 30 to 40 state regulators, typically Attorneys General, who are also investigating complaints.

About BBB of Eastern North Carolina:
The Better Business Bureau of Eastern North Carolina is a 501 (c)(6) not-for-profit corporation serving 33 counties in eastern North Carolina. The organization is funded primarily by BBB Accredited Business fees from more than 3,200 local business and professional firms. The BBB promotes integrity, consumer confidence and business ethics through business self-regulation in the local marketplace. Services provided by the BBB include, reports on companies and charitable organizations, general monitoring of advertising in the marketplace, dispute resolution services, and consumer/business education programs. All services are provided at no cost to the public, with the occasional exception of mediation and arbitration. Visit www.bbb.org.

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