Phone Scam: Your Auto Warranty Is About to Expire
Like many scams, the ultimate aim of this scam is to gain access to your valuable personal information. The scammers can then use this information to gain access to your precious financial accounts and set up fraudulent new accounts in your name.
How it Works
If you’ve ever received a phone call, email, text message or letter in the mail informing you that the warranty on your vehicle is getting ready to expire, you may already have been a target of this scam.
However you’re contacted, the objective is to get you to call a toll-free telephone number to discuss purchasing a new extended warranty, more correctly described as a service contract.
While many perpetrators of this scam claim to be your vehicle’s manufacturer, the best they can really offer is a service contract, as only vehicle manufacturers can legally offer warranties.
If you call the number provided in the initial correspondence (or, if you’ve been cold-called, let the caller continue speaking instead of you hanging up) the marketer you speak with will typically barrage you with a host of high-pressure selling tactics.
He or she may even demand that you provide a downpayment and personal financial data before giving you any information about the proposed service contract.
If you fall prey to such tactics and purchase the offered service contract, you may find, like so many before you, that it’s rarely worth the paper it’s printed on.
Sure, some of the services offered may be legitimate on the surface, but they can be next-to-impossible to redeem.
Many, for example, carry exclusions for any item the provider considers related to a pre-existing condition. Moreover, the contract may not even offer many of the more common maintenance and repair protections, like full engine coverage, bumper-to-bumper protection and coverage for normal wear and tear.
If you try to cancel such a contract and request a refund, you’ll find that, too, is nearly impossible.
Red Flags to Look Out For
One of the indications a letter or message may not actually be from your car manufacturer or dealer as it claims but from a scammer instead is that it contains certain hot buzzwords, such as:
- Motor Vehicle Notification
- Notice of Interruption
- Final Warranty Notice
The purpose of using such inflamed language in these communications is to create in you a false sense of urgency. Don’t let it. Instead, remain calm and investigate the source of the message thoroughly.
Another common characteristic of someone trying to pull this scam on you is fast talking. When someone talks fast at you, rather than engaging you in mutual conversation, it is usually because they want to confuse you and cause you to make snap decisions.
Note: “spoofing,” or disguising one’s identity as a trusted individual or organization, is common among purveyors of this scam.
If you receive a call with a caller ID claiming to be your vehicle’s manufacturer or your current auto insurance provider, be aware that the caller still may be a scammer merely spoofing the trusted identity.
Therefore, instead of accepting such a call, look up the direct number for that manufacturer, dealer or provider in your phone book or Google and call them back yourself.
Likewise, if you receive mail purporting to be from your vehicle’s manufacturer, dealer or insurer, rather than reply to the provided contact information, look it up in a trusted source and contact the mailer that way.
Similarly, don’t reply to any email sent from an unknown address, even if it purports to be from a trusted contact. Rather, seek that contact’s email address elsewhere and use that to send a message inquiring about the veracity of the offer.
Tips to Protect Your Information
If you have any questions or concerns about your vehicle’s warranty, check your owner’s manual first. If you can’t find the information you’re looking for there, contact the manufacturer of the vehicle or the dealer who sold it to you to inquire.
If you believe you are talking with someone who may be attempting to scam you, ask for information about their supposed offer in writing. Avoid giving out any personal information until you know for certain that you are dealing with a legitimate representative of a legitimate agency.
Information to avoid giving out without such certainty includes (but is not limited to):
- Your bank account number
- Your Social Security number
- Your driver’s license number
- Your vehicles Vehicle Identification Number (VIN)
Rather than buying a service contract when you have a vehicle warranty that has expired or will soon, plan ahead. Start by purchasing a reliable vehicle to begin with.
Then, maintain it according to the manufacturer’s recommendations. Meanwhile, save the funds you would otherwise be spending on a service contract in an account earmarked for emergency maintenance costs or repairs.
If you feel a service contract is worthwhile given your circumstances, at least purchase it from your vehicle’s manufacturer and not a third party.
It may cost more than the third-party offers you may receive for similar services, but at least you know a service contract from your vehicle’s manufacturer is not a scam.
And always read a service contract thoroughly, including all the fine print, before you sign on the dotted line, even when you buy it from a known and trusted provider.
Make sure you know what is and, perhaps more importantly, isn’t covered by any contract before you sign and pay for it.
Summary and Resources
To avoid getting these types of scam calls over the phone, you can sign up for the Do Not Call Registry by calling 1-888-382-1222 or going online to DoNotCall.gov.
If you believe you have already fallen victim to this type of scam, you can file a consumer complaint with the Federal Trade Commission at FTCComplaintAssistant.gov.
You can also look up a company to find out its legitimacy by contacting the Better Business Bureau at BBB.org.
Learn more from the FTC about vehicle warranties and service contracts here:
