

If your vehicle warranty has expired or is about to, don't purchase a service contract. Don't call the number that's on any letter or postcard you receive, even if it looks like the communication is from the automaker. If you receive a letter, postcard or telephone call advising you that your car's express warranty is about to expire, check with the manufacturer. Many of the contracts simply duplicate coverage available under any existing manufacturer's warranty. Instead, they're service contracts that promise to pay for repairs. Legally, the policies aren't warranties, which typically are provided by manufacturers or retailers at no additional cost.

Instead, they're selling the policies on behalf of companies that do. Typically, the marketers aren't providing the actual coverage. Even the bureau's new CEO has received bogus warranty expiration notices, she says. She says some complain that they're harassed daily by callers pushing the coverage. Michele Mason, senior vice president of the West Palm Beach bureau, says the BBB has received consumer complaints about the scam as recently as last week. But canceling and obtaining a refund often is difficult or impossible, he says. They promise customers that they have ample time to cancel if they're unhappy after receiving the contract terms. Smith says the salespeople often try to pressure car owners into an immediate purchase by claiming the offer is good only for that day. "These people get you on a phone, and they will not let you go until they have sold you on a deal," he says. Those who tried to obtain refunds found it virtually impossible. For instance, it says, the policies didn't provide bumper-to-bumper protection or cover the entire vehicle engine, as customers were led to believe.

Those who purchased the service contracts found that the coverage was far less than represented, the agency says. The FTC says the Miami-based company tricked consumers into believing that the calls were from their vehicle manufacturer or car dealer, a common tactic in car warranty scams. The Federal Trade Commission announced earlier this week that it was mailing more than $4 million in refunds to nearly 6,000 consumers who the agency said were conned by a company that used robocalls to hawk service contracts costing from $1,300 to nearly $2,900.
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If you get a call or letter saying that your new car warranty is about to expire and it offers you an "extended warranty," use caution. Car warranty scams, which attempt to trick consumers into buying vehicle service contracts, continue to plague consumers despite government efforts to crack down on the caper.
