Chicago, IL-February 12, 2009 - As people purchase fewer new vehicles and keep their current ones longer, the Better Business Bureau is warning vehicle owners of a new scam selling extended service warranties of questionable value.
“Consumers are being bombarded by phony telemarketers and mailers using scare tactics to sell extended vehicle service warranties,” said Steve J. Bernas, president & CEO of the Better Business Bureau of Chicago and Northern Illinois. “These scam callers frighten people into thinking their vehicle warranty is about to expire, when that is not the case, and then offer immediate sign-up for warranty contracts that are packed with conditions that must be met before any reimbursement or coverage occurs.”
Bernas said that not only are these phony telemarketers and mailers deceptive about the consumer’s coverage, they are potentially ignoring federal laws.
According to Bernas, the BBB has seen a considerable spike in both complaints and inquiries from consumers who state that they received misleading mailers or high-pressure telemarketing calls claiming their auto warranty was about to expire.
BBB offers the following advice for dealing with a firm selling extended auto service contracts:
- Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer, or anybody else without a specific need to know.
- When considering an extended service contract or any other type of telephone solicitation, insist on getting a contract in which all terms and conditions are clearly explained before signing up or providing credit card or other payment information.
- When considering the purchase of a service contract, it is important to weigh the costs of the contract against the cost of possible repairs of the product. Be aware of vaguely worded exclusions or limitations in coverage or maintenance requirements which, if not followed, would allow the company to deny coverage. Find out how repairs are paid for and if you must obtain prior authorization.
- Read your auto manufacturer’s warranty and contact your dealer or manufacturer so that you are not purchasing duplicate coverage. Verify the company and individual with whom you are speaking.
- Before purchasing extended warranty coverage, consumers should always check the company out first with BBB at www.bbb.org.
For more information you can trust on avoiding fraud and identity theft, go to www.bbb.org.