×
Cornerstone
Official App
Free – Google Play
Get it

When the Chips are Down, Some Car Warranty Frauds May Rip You Off

When the Chips are Down, Some Car Warranty Frauds May Rip You Off

When the Chips are Down, Some Car Warranty Frauds May Rip You Off

January 18, 2022

Rockford, IL – January 18, 2022 – Production of new cars is down, and prices are up. That situation has prompted many consumers who are in the market for a new vehicle to keep what they have. There are many highly rated and legitimate car warranty companies that provide valuable services. Consumers count on these safeguards to help cover repairs of major components, engines, transmissions, etc. Not all warranties are bogus, however these conditions have created the perfect opening for auto warranty scammers.

“Car warranty scammers try to take advantage of vehicle owners’ fears that, someday, they’ll have to pay a lot of money to replace a broken or worn-out part,” says Dennis Horton, director of the Rockford Regional Office of the Better Business Bureau.  If you own a vehicle and a phone, you may receive calls from scammers posing as representatives of a car dealer, manufacturer or insurer telling you that your auto warranty or insurance is about to expire.

According to the call-blocking service RoboKiller at the end of 2021 crooks could have placed nearly 13 billion scam auto warranty calls, more than triple the 2020 total. Horton notes, “Looking at that number by the end of last year it’s statistically possible that every smartphone owner in the United States could have received more than one car warranty scam call.".Typically, the calls include a recorded voice claiming to represent an automaker or dealer and warning that the coverage you got when you bought the vehicle is about to expire. The call isn’t really from your vehicle’s manufacturer or the dealership where you purchased it, and the “extended warranty” being offered isn’t a warranty at all. It’s a service contract that may cost thousands of dollars but provides only limited coverage (for example, for only part of the engine). Restrictions are frequently buried in the fine print.

“That’s the rub,” says Horton. “Complaints filed with the BBB often allege vehicle repairs they believed would be covered under these warranties are sometimes later denied by policy administrators. As a result, consumers may spend hundreds or thousands of dollars on repair costs they thought were covered under their new warranty.”

As frequent as they are, scam calls aren’t the only way con artists try to get vehicle owners to pay up or provide personal information. Some mail out fake warranty expiration notices, designed to look as if they were sent by manufacturers or state motor vehicle bureaus, with a toll-free number for auto owners to call.

Red flags for this scam are:
  • A call or mailing says it’s urgent for you take immediate action to continue your car’s warranty coverage.
  • An outside company offers to extend the factory warranty, something only the vehicle’s manufacturer can do.

Here are some Do’s and Don’ts:
  • Do research a company offering extended coverage — check BBB.org for complaints —and carefully read the fine print on any contract to see exactly what it covers and how long it lasts.
  • Do consider installing a call-blocking app on your smartphone and if you still have one your landline as well. These devices can block numbers of known scammers and weed out robocalls by prompting callers to press a number to continue.
  • Do check on anyone who claims to be calling from the dealership where you bought your vehicle. Hang up and call the number listed on the dealer’s website or the purchase paperwork.
  • Do check the expiration date for the manufacturer’s warranty and the terms for extending that coverage before you consider buying coverage from an outside provider.
  • Do put your phone numbers on the FTC's National Do Not Call Registry. Legit companies won't call you if you're on the registry, so you'll know an unsolicited car-warranty call is almost certainly a scam.
  • Don’t answer a call if you don’t recognize the number. Let it go to voicemail.
  • Don’t assume a call is on the level because caller ID shows the name of your vehicle’s manufacturer or something like “auto warranty department.” Scammers can use spoofing tools to display whatever name or number they choose as the caller ID.
  • Don’t follow instructions to press a number on your phone to avoid future unwanted calls. Scammers do this to confirm they’ve reached a working number they can call again.
  • Don’t provide personal information such as a credit card or driver’s license number unless you’ve verified that you’re talking to someone from a legitimate company that you already have a business relationship with.
BBB urges anyone encountering a scam, whether they lose money or not, to report it to the BBB Scamtracker. When you alert others, you help protect your community. To find businesses you can trust, visit our free database of business ratings and reviews at BBB.ORG. # # #

About BBB: BBB of Chicago and Northern Illinois is a nonprofit organization that has served both consumers and trustworthy businesses for over 95 years and is a part of the IABBB. We help protect consumers from scams and provide a free database for consumers to see business ratings and reviews to find businesses they can trust. We connect consumers with businesses they can trust. The International Association of Better Business Bureaus (IABBB) is the network hub for BBBs in the US, Canada and Mexico. Like BBBs, IABBB is dedicated to fostering honest and responsive relationships between businesses and consumers -- instilling consumer confidence and advancing a trustworthy marketplace for all.
Cornerstone Credit Union
1-800-711-3277  •  Routing: 271184425  •  NMLS #743907
 

facebook logo Cornerstone Credit Union YouTube Channel   download adobe reader

Co-op logoTrustage logoESI logoEHL logoNCUA logo
Your deposits are federally insured up to $250,000 by the National Credit Union Administration (NCUA), with an added safety net of private insurance (Excess Share Insurance/ESI) for an additional $250,000. This is the highest combination of federal and private insurance available to consumers.