BBB Scam Alert: EXTENDED WARRANTY SCAM HITS BC

For Immediate Release
BBB SCAM ALERT

EXTENDED WARRANTY SCAM HITS BC

Victoria, BC – Better Business Bureau (BBB) has received inquiries from consumers regarding a live or automated telephone call informing them that the warranty on their vehicles may be expiring soon.

"Consumers are confused by these phone calls because in many cases they have older vehicles that are not eligible for warranties," says Rosalind Scott, BBB Executive Director. "Callers have also used pressure tactics to urge people to reveal personal information and credit card numbers."

This latest phone solicitation scam to hit British Columbia has led to a cease and desist order from the province’s Financial Institutions Commission.

The order concerns automated messages that are trying to sell after-market vehicle warranties. The companies named in the order are as follows:

• Canadian Auto Warranty Services
• National Dealers Warranty
• The Choice - Gold Key C/O Canadian Auto Warranty Services
• World Wide Warranties Inc.

Consumers are being contacted by a company representative advising that their vehicle warranty will expire in two days. The representative claims the information was provided by the manufacturer that provided the original warranty.

Consumers are then offered a five-year extended warranty for $175 to $400 and asked to provide a credit card number. The representative tells consumers they can contact Warranty Center at 1-877-914-7776.

The telephone prefixes that have been appearing on customers’ phone are from across the US and even Canada, but police suspect that the numbers are being spoofed to hide the identity of the origin of the calls.

The companies listed on the FICOM order are purported to be based in Missouri. BBB of Saint Louis reports that National Dealers Warranty has had 186 complaints over the past three years, and an F rating, the lowest grade given by the BBB.

In addition, the Attorney General of Missouri filed suit against National Dealers Warranty in March 2008 for sending consumers postcards and letters informing them that they had limited time to purchase renewed, extended warranties for their vehicles. The company settled and agreed to pay $4,955 in restitution to four customers and $25,000 to the Attorney General's Office for costs in bringing the lawsuit.

BBB would like to offer consumers the following advice when confronted by these calls:

Refer to your original vehicle documents. Read over your original documentation to see how and where an extended vehicle warranty can be purchased.

Start with your car dealer. Consumers interested in extended warranties should contact the dealer where they purchased the vehicle if they want to buy an extended warranty.

Check with the BBB. Do a search at bbb.org to check the company’s reliability report.

Be suspicious of low prices. Purchasing an extended warranty can cost anywhere from $2000 to $3000. It is a red flag when a five-year warranty is sold for only $175.

Check to see if the warranty provider is licensed. Extended Warranty contracts on vehicles are considered to be insurance and are regulated under the Insurance Act. To confirm that the product you are considering is being offered by a licensed insurance company and a properly authorized insurance agent please contact the Financial Institutions Commission at 1-866-206-3030.

People who have purchased warranties from any of the entities named in the Cease and Desist Order are encouraged to immediately contact FICOM at 604 953-5300.

For more consumer tips visit our website at vi.bbb.org

To schedule an interview, please contact:

Rosalind Scott, Executive Director
Tel: (250) 386-6348 ext 106
Email: rosalindscott@vi.bbb.org