Auto Warranty Scams – What You Need to Know

If you are buying a new vehicle, it often makes sense to buy an extended warranty. Most warranties only cover the vehicle for the first three years or the first 36,000 miles. An extended warranty helps you to avoid the financial stress of issues that occur outside of that limited window.

However, it can be difficult to distinguish a good warranty from an auto warranty scam. To help you tell the difference, our team at PaydayLoansCashAdvance has compiled a few tips for your perusal.

Be Wary of Letters or Phone Calls with “Urgent” Messages

Many consumers receive letters in the mail warning them that their car warranty needs to be renewed “urgently”. In most cases, these letters are not from the car dealership or from the warranty underwriter. Rather, they are from third party salespeople who are trying to get you interested in their product using trickery.

Typically, these letters pretend like they are from your dealership. They often contain phrases like “Final Notice” or “Declaration of Interruption” or “Car Warranty Notification”. They tell you that your current car warranty is expiring, and they urge you to “Act Now” to protect yourself.

The end goal of these aggressive phrases is to get you to call a toll-free phone number. Once you call that number, you will be put in contact with a salesperson whose only goal is to get you to sign up for their auto warranty scam. These skilled salespeople often sign up unsuspecting consumers before they even realize what is actually happening. They may sell you their contract for hundreds or thousands of dollars before they even give you information on the warranty itself. By the time you contact these companies to make a claim on your warranty you will likely discover that they have gone out of business and that your money has mysteriously disappeared.

Luckily, there are ways to insulate yourself and your finances from auto warranty scams like these. If you register with the “National Do Not Call Registry”, salespeople like these are not legally allowed to contact you. However, there are exceptions to this rule. For instance, if you have done business with a company during the last year and a half, they are allowed to call you. If a company is repeatedly calling you when you have asked them not to, you can also report violations like that to your state’s attorney general.

Protecting Yourself and Your Finances

It can be hard to avoid an auto warranty scam. Many of the scammers that call you will be ‘fast talkers’. They know exactly how to get personal financial information from the person on the other end of the phone line. If you are talking with a fast talker, you don’t need to worry about being polite. It can be almost impossible to say no to these people, and you should simply hang up the phone. In most cases, that is the safest option.

If you are stuck on the phone, you should ensure that you never give out your personal information. Unless you truly understand and desire the car warranty that is being offered to you, do not give out details about your credit cards, bank accounts, or social security number. Don’t even give out information about your license plate number or your VIN (Vehicle Identification Number) unless you really trust the company with whom you are talking.

Unfortunately, this information can be disastrous in the wrong hands, and you need to safeguard your personal details. Many scam artists will also pretend to know about your current policy. However, you should never talk to these people about your current policy. If you have questions about your car warranty, you need to call the dealership or the vehicle’s manufacturer. They can answer your questions or direct you to a reputable agent who can help you.

Research is Your Friend

Before making any rash decisions, you should always research the company who is offering you the warranty. A little bit of online research can help you to distinguish an auto warranty scam from a legitimate offer. Ideally, you should look at the website for the contract administrator or provider who is offering the warranty, but that should not be your last step. You should also check with the Better Business Bureau and your local consumer protection agency to see if the warranty company has any complaints lodged against them.

You Are Not Powerless

If you become the victim of an auto warranty scam, you are not alone. Rather than feeling foolish or thinking that your money is simply gone, you can take action. There are consumer protection groups and laws that have been set up just for cases like this.

You can file a complaint with the FTC (Federal Trade Commission). Unfortunately, they cannot get involved with helping you to reclaim any lost money, but they can collect complaints. Once they have enough complaints to indicate serious fraud, they can take action and start the process of eliminating those companies or unearthing the culprits behind them. Of course, you may also pursue legal action on your own. An attorney can help you to determine whether or not you have a case that is worth following through.

The right car warranty can be invaluable. It can save you countless amounts of money on car repairs and replacement parts. However, an auto warranty scam can cause you to lose hundreds if not thousands of dollars. By following the tips outlined above, you can easily safeguard yourself and your wallet.

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