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Don't Fall for the "Extended Warranty" Auto Scam

June 6, 2019

Extended Warranty Auto scams have been around for decades, but each year they are increasing in number. Chances are that you, or someone in your family will be targeted. These scam, like so many others are meant to lure you into giving your personal information or financial details.

 

The Extended Warranty scam comes in two forms, the first is through the mail. You receive an official looking envelope, one that appears to be from your car manufacturer, insurance company or car dealer. The letter will claim that your automobile extended warranty is about to expire and that to renew it you must call the number provided. If you follow this request the very convincing person on the other end of the phone will explain that your warranty is expiring and to extend you must provide them with your credit card number or bank account information. They may claim its a one time offer or that you won't find coverage for this cheap again.

 

In the same way as the mail scam, you may also receive phone calls claiming much the same thing. These scam artists can be very convincing, often knowing details about what type of car you drive or what dealer you purchased it from. They add in a sense of urgency claiming that you have to buy today to get the deal but that you can cancel if you are not satisfied, though if you were to try to get a hold of them again it would be near impossible. Since 2011 these types of scams have cost Americans millions of dollars. Hundreds of lawsuits have been filled, with nearly 4 million dollars awarded to those affected by the scam, with nearly double that lost.

 

What makes this scam so successful is it preys on people's uncertainty and confusion, they catch you unexpectedly and off guard. If you buy a car from a dealership an extended warranty is often part of the purchase, but how many of us actually know the details of those warranties? That's what these scam artists are counting on.

 

To protect yourself make sure you know if you car has an extended warranty. If you purchased it independently or it has been more than five years since you purchased it from a dealer, chances are you do not have an extended warranty, unless you specifically sought out extended coverage through a third party. Knowing this information can help you recognize scams for what they are. If you do have an extended warranty on your vehicle, directly call or visit the dealership/company to discuss the terms or a possible extension. If you receive a letter about your warranty do not use the number provided, instead find the phone number for the dealership and call directly.

 

The bottom line is, if you receive any phone calls or mail about an automobile extended warranty do not give out any information, do not give your credit card or bank account information. If you're unsure if a call or letter is authentic, directly contact the supplier of your vehicle or warranty to better protect yourself from scams.

 

To learn more about authentic Extended Warranties and Auto Contracts visit the FTC consumer report article: https://www.consumer.ftc.gov/articles/0054-auto-service-contracts-and-warranties

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