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Beware Of Fake Extended Auto Warranty Pitches

Beware Of Fake Extended Auto Warranty Pitches

CREATED May 21, 2008

Getting one's car fixed can cost hundreds, if not thousands of dollars unless the repairs are covered under warranty.

Several companies sell what they call extended warranties.

And some send out notices with messages urging consumers to call now to get special rates.

Mary Blackburn told NewsChannel 5 consumer investigator Jennifer Kraus that she received a notice for a warranty advertised with a special rate that she had to get now.

For $2,000, Blackburn thought it sounded like a good deal.

"It was supposed to cover bumper to bumper like a new warranty and cover the entire car for everything," she said.

Anything that happened to her car, according to the advertisement, the warranty was "supposed to cover it."

"That's what it said," she said.

But when her car broke down, she found the extended warranty she'd purchased was useless.

She said it didn't pay for anything.

NewsChannel 5's investigative team found that Blackburn wasn't the only warranty purchaser left paying for their own repairs.

"It's kind of frustrating," said George Perkins.

He fixes cars for a living. When he got an offer that he thought looked official, he thought it was something he could trust.

"'Due to the extreme nature of this program, we can make this offer available for 72 hours only,'" Perkins said, reading from the offer.

He paid about $1,800 for his extended warranty. Then he needed transmission work.

"They authorized it on the phone to do the repair and gave us an authorization number to get a reimbursement," he said.

But when the job was done, he said, the company claimed it didn't have any money.

So it didn't pay for his repairs.

National Auto Warranty Services is one of more than half a dozen companies being sued by the attorney general of Missouri, who says the companies use "misrepresentation" and "deception" to sell extended warranties to people who often don't even need them.

In Connecticut, the attorney general issued a consumer warning after receiving what he calls too many complaints about the companies. He also launched a nationwide investigation hoping to "stop this scam."

"I'm glad that someone is trying to do something to take care of this situation because there's too many people like me without money putting money into it and getting nothing out of it," Blackburn said.

"About $2,100 I'm out, I guess, at this point," Perkins said.

"I personally have gotten them," said Mary Clement, director of the division of consumer affairs for the Tennessee Department of Commerce and Insurance.

Yet, Tennessee's Attorney General Bob Cooper won't say whether his office considers them a problem or whether he's doing anything to stop them.

But Clement recommends staying away from them.

"I think consumers in today's climate need to be very careful about anything coming from out of state from a company through the Internet, through the mail, through the telephone that they absolutely know nothing about," she said.

Something Blackburn wishes she'd known sooner.

"I'll never buy another one," she said.

Some of the companies are now trying to sell their extended warranties over the phone. But experts say if anyone gets a call from someone who claims a car's warranty is about to expire, chances are it's part of the same scam and it's best to simply hang up.

Complaints about extended warranty companies can be filed online through the consumer affairs office of the Tennessee Department of Commerce and Insurance. To file consumer complaints, click here.

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