Extended Car Warranty Scam

I have a 1997 ford explorer with about 122K miles on it. Late last year I started getting automated calls about an extended car warranty that I can use for my vehicle repairs. I ignored these calls until January this year when I spoke with an associate. The associate tried to sweet talk me into buying a warranty with $299 dollar down and 12 monthly payments of about $199. He gave me a scanty review of the types of repairs covered by the warranty.

I was very suspicious and requested for the policy. I promised to call back after reviewing the terms of the warranty. The guy told me that I had to make a decision one way or the other during the call because they did not want people to call them after their car develops a fault. He also offered another warranty with a $195 down-payment and 18 monthly payments of $150.

I refused to commit myself because I didn’t know the terms of the policy and as a compromise, I agreed to make the $195 down-payment (with my card) on the condition that it will be refunded if I didn’t find the policy useful. I also expressly forbade the company from deducting any money from my account until I have read the policy and notifed them by email that I was willing to buy it.

The company sent a package to me after about a week. Unfortunately, the package and all the contents of my bag was stolen when my car was vandalized the next day. I sent an email to this company informing them that I did not have a chance to read the policy and requested for another copy. I reiterated my earlier directive for them to wait till I inform them that I am willing to buy this warranty.

I never received the second policy but when I checked my account about 3 months later, I found out they have been deducting money from my account. All this while, I have been repairing the vehicle out of pocket because my understanding is that I did not have a contract with them.

All my efforts to get my money back since then have been fruitless. The customer service manager informed me that they operate by verbal contract. I have since changed my card and I’m pursuing other options to retrieve my money.

I later found out that a lot of people have been receiving similar calls and I am concerned that a lot of innocent people will fall victim to this company.

My question: Does anybody know the contacts of a journalist who investigates this type of case?

Sorry to hear this- these companies (the cold call ones) are uniformly scammers, to be avoided at all costs. I would pursue legal relief, talk to your state’s and the company’s state’s consumer affairs department. Have you notified your credit card company and protested the charges?

You need to do a couple of things:

  1. Notify your credit card company that these charges were not authorized and should be removed from your account. You can check your state’s case law, but verbal contracts generally don’t count in most states. That is true, for sure, in Kansas. If you told them to cease charging your credit card once, until you received the new policy package, that is all you are obligated to do. Hopefully you have a copy of that letter. Even if you did not send a letter, you may still have the law on your side.
  2. Contact your state Attorney Generals’s Consumer Affairs Division, or equivalent. They may already have started a case file and their pressure may yield results. If not, then they may start a case file. File an official complaint. They can also verify your best approach to getting your money back.

These companies have come under increased scrutiny, so there is a good chance of success, if you take these actions.

If this company happens to be one of the companies based in St Louis, call or email one of the St Louis investigative reporters. Turns out Missouri has become a haven for the establishment of these companies.

I’m sure that if you would have gotten to read the scam…er warranty papers, you wouldn’t have wanted to buy it anyways.
$195 +($150*18) = $2895 Doesn’t seem like a good deal now, does it?

I recently read in the paper that he gov’mint shut down a big operation that was doing phone sales for extended warranties. They were calling people that had no cars. My wife got calls. I had more than a couple of calls myself and when I listened to end of the recorded message there was an option to get off the list so I punched that button and had no more calls. It could have been due to the government action, though.

That guy reports on stuff like this.

With a price of only $2,700, who would even bother to read the terms. You can buy another old car for that price.

It is a known scam (acturally several of them) and the governement is starting to close them down, but likely will never be able to get them all.

Note: any “extended warranty” is really an insurance policy not a warranty, and will always cost more, on the average than the repairs it may cover.

This is a total scam…

I feel for you…I still don’t know HOW anyone can fall for these scams…ANY AND EVERY COLD CALL IS A SCAM…I don’t car what they’re selling…IT’S A SCAM…

Call your credit card company and have them STOP payments…and stop any future attempts of them trying to take money out of you account.

And the next time someone calls trying to sell you something…HANG UP ON THEM…IT’S A SCAM…let me repeat…IT’S A SCAM.

I think that you are doing all that you can.

In general, if you REALLY feel better with the peace of mind that comes with having an extended warranty, you should either get a factory certified car that is backed up by the manufacturer and dealer network, or buy mechanical repair insurance from your auto insurance company. In both cases, this is still fairly expensive insurance for what you are likely to collect, but at least you are dealing with reputable companies and if it helps you sleep at night…

Thanks so much. I’ll follow up with this guy

Thank you all for your comments and useful suggestions.

This company is actually based in Las Vegas. Does anybody know a good investigative reporter in that state?

The problem with the extended warranty business is that half are outright scams i.e. they have no intention or ability to cover repairs. The other half will cover repairs but they will be very restrictive on what they will cover. Denials based on “preexisting condition”; “not covered on this vehicle”; “ordinary wear item”; etc.; etc. will appear. They usually work on a repayment basis i.e. you get the car repaired and they will refund you the money (if they agree with the mechanic). So you have to fight the insurance company. They are very good at dragging their feet until you give up or settle for less.

I guess word of mouth would be the best way to select a company. So far I have not heard “good” word of mouth about any of the nonmanufacturer extended warranties.


This has already been investigated…In fact the US government is doing it’s own investigation…

The United States Attorney General’s office has been investigating these operations and is filing a massive action against the companies doing this. The action includes a list of criminal charges as well as reimbursement. I don’t have the details handy, but look under “robo calls legal actions” or something of that nature and you should get tons of information.

Sincere best.

I’ve also had a few calls to my cell phone from these guys. They never left a message, but I always had a “missed call” from their number(s)
267-298-2093 is one of them, based out of Philly PA according to msn’s white page phone lookup