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Car Warranty Calls -- How to Protect Yourself

By Melissa Spicer | March 1, 2022

The number of vehicle warranty scam calls that went out to American households in 2021 is alarming: figures indicate that Americans received a collective 12 billion vehicle warranty scam calls in 2021 alone, which amounts to at least three scam calls a month for every American during the year.

Unfortunately, this trend is nothing new. Last year, the top complaint from callers to the Federal Communications Commission (FCC) was regarding auto warranty robocalls. Even worse, this trend shows no signs of stopping.

The issue with these calls is not only are they deceptive, they're also illegal. The good news is that you can protect yourself by detecting vehicle warranty scams—and, by extension, avoid getting stung by these scamming fraudsters.

How to Protect Yourself from Auto Warranty Scams:

Protecting yourself from these scams is easy once you know how they work.

Help protect yourself from these ruthless fraudsters with the following tips:

  • Use caller ID to screen phone calls. Companies are required by law to display a genuine number to contact so that you can request that they stop calling.

  • Similarly, cell phone providers sometimes offer apps to help you screen telemarketers and avoid unwanted calls, and you can also find such apps online.
    If you answer a call and realize it is a robocall, hang up immediately.

  • Head scammers off at the pass with an app like Robokiller. A Webby Award winner, this app blocks spam calls and texts.

  • If instructed to press a button in order to continue the call, do not do it. This proves to the robocall system that your number works—a human answered and responded by pushing a button—so they will double down on their efforts to fleece you of your hard-earned cash.

  • Ask to call them back. If someone claims to be from your dealership or from the automaker, tell them you will call them. Look their number up (don’t trust them to give you the number, as a fake number is part of the scam, and spoofing of numbers in the call recipient's local area code is rampant among scammers) and call to confirm that it is your dealership or automaker calling you.

  • Unless you have proof that the company calling you is authentic, never give them sensitive information, such as your credit card or bank account details.

  • If you receive verbal or written correspondence regarding your car's warranty, check the manufacturer's contact information online to see if it matches. A service contract may not always be the best idea because you might be able to save more money by putting aside a repair and maintenance fund once you buy a vehicle.

  • Do not agree to any contract without reading the terms and conditions, including the fine print, and comparing these against the Federal Trade Commission's Auto Service Contracts and Warranties guide.

  • On your cellular device, use the Silence Unknown Callers setting (on iPhone) or the Block Numbers option (on Android) to prevent calls from unknown origins. Always file a complaint with the Federal Communications Commission if scammers harass you. The FCC can fine companies that violate the Telephone Consumer Protection Act.

Occasionally, the FCC returns the money conned from consumers right back to them. In 2011, the FCC gave $3.2 million in refunds to 4,450 people who bought fake warranty coverage. In 2019, they awarded $4 million to about 6,000 people for the same reason. Making a consumer complaint to the Better Business Bureau is another good way to pressure scammers to give you a refund. Also, the BBB has records of previous complaints, which you can check for help in detecting scams.

  • For extra peace of mind, log your phone number on the FTC's National Do Not Call Registry, also known as the Do Not Call List.

What Else To Watch Out For:

Scammers tend to follow a similar playbook when they call. Their knowledge of cars tends to be superficial, so it is easy to catch them, making blatant mistakes about your vehicle or your personal information.

When rattling off a list of parts that their warranties supposedly cover, they may mention parts unrelated to your vehicle.

Scammers also tend to backtrack when pressed on specifics about their company, such as the location of their offices. They tend to speak fast and offer a significant discount during the hard-sell process, and they frequently sell their coverage as a monthly payment plan.

They may also claim that their warranty has no sales tax, which is most likely false.

The hallmarks of a scam call for an extended vehicle warranty may include one or more of the following elements:

  • Vagueness. The caller usually has vague information about you, your car, your car’s history, and your warranty.

  • Requests for personal info. Nearly all calls will ask for some sort of payment, whether credit or debit card or ACH withdrawal. This is how scammers get a fast payday.

  • Urgency. The caller on this sort of scam call will invariably say that it is urgent that you take action immediately. Creating a sense of urgency and rushing the call’s recipient to buy a warranty is seen in nearly every scam call.

  • Threats. Threats to the call recipient might include cancellation of the existing warranty if payment is not made, among others.

When shopping for car insurance online, keep in mind that any data you input, such as your car's make and model, can fall into the hands of scammers. Do not be afraid to hang up on telemarketers. Real manufacturers do not call consumers day after day or use high-pressure sales techniques.

When in doubt, check your manufacturer's warranty for an expiration date or search Google for their warranty extension policies. In contrast to third-party warranty companies, auto manufacturers tend to offer robust extended warranties with thorough coverage.

Finally, if you have already been scammed and want restitution, you can always call your state Attorney General and ask to sue the scammer.

How Do Car Warranty Scams Work?

Most car warranty scams are straightforward. A scammer masquerading as a legitimate company, such as a car dealer or insurer, calls you to let you know your car warranty is due to expire.

The scammer then offers you an extended car warranty and asks for your personal information to draw up a vehicle service contract. Many such calls are robocalls—that is, automated calls that churn through many people quickly and that usually feature pre-recorded voices—and are therefore easy to detect.

But, be aware because even robocalls are getting more difficult to detect with technology constantly improving.

Others involve real people who may know a lot about your vehicle and warranty. They may know your name, the make and model of your vehicle, your vehicle's mileage, and the terms of your insurance or warranty agreements. Most of this information can be purchased online from data collection companies.

The service contracts that these scammers offer typically range from $1,000 to $3,000 and tend to include woefully incomplete coverage, such as coverage of part of the engine rather than the whole. Getting a refund from the scammer rarely, if ever, works, leaving consumers with limited recourse other than filing a chargeback with their banks or credit cards. Vehicle warranty scammers tend to target vulnerable consumers, with senior citizens being their most coveted customers.

Other car warranty scams include fake warranty expiration slips sent by mail and featuring a toll-free phone number for the recipient to call. These notices typically have the return address of a motor vehicle department or vehicle manufacturer for a touch of credibility, and they may have bold-text warnings that read "Final Notice" or "Priority Level: High."

Car warranty scammers often use high-pressure sales tactics to push owners to buy their service contracts. These promises include saying their offers are one-time-only or that it's easy to cancel if you change your mind. The scammer may even threaten to delete your warranty or insurance files if you do not sign up for the contract.

If pressed to provide a copy of the terms and conditions of the agreement, the scammer may request a down payment before sending it. Although some scammers practice straight fraud, others rely on legal loopholes to get away with unfair practices, such as by including carefully worded fine print in their contracts. Some scammers do not explicitly state that their offers are warranties and instead claim they're just offering "repairs."

Alternatively, some scammers duplicate the coverage of consumers' actual warranties. Scammers may ask for your bank account information, Social Security number, driver's license number, or credit card information over the phone. They may then sell this information to fraudsters or use it to steal your money.

Car warranty scammers may also send you emails with addresses that look like they belong to real dealerships. Although caller ID can give scammers away, such as by displaying a 1-800 number, the more advanced car warranty scam calls have legitimate-looking numbers. The scammers may even use the telemarketing trick of calling you from a number that appears to be local. To seem authentic, callers may "transfer" you to other scammers and then ask for details about your vehicle, such as whether you get it serviced often or whether your check engine light is on.

Growing Trend for 2022: Auto Warranty Scam Texts

Numbers show that auto warranty scammers are getting more creative in their attempts to fleece the populace. In 2021, scammers sent 87.8 billion spam texts, up from the 55.4 billion texts sent in 2020.

Experts say this is because more people prefer texts over voice calls than ever before, and the FCC’s mandates regarding texts are less stringent than those governing calls.

The Bottom Line

Car warranty phone scams and car warranty robocalls may eventually play themselves out, but it isn’t looking like that’s going to happen anytime soon.

Stay abreast of the latest scam trends to stay ahead of these ruthless scammers and use due diligence to avoid falling for their tricks and losing your hard-earned cash in the process.