Consumer Alert: Be Wary of Offers for Automobile
Extended Warranties

BALTIMORE, MD (July 14, 2008) – Attorney General Douglas F. Gansler is urging consumers to be wary of a marketing campaign attempting to sell extended auto warranties that is targeting countless citizens nationwide on their cellular phones and landlines, as well as through postcards, letters and emails. The marketers offer to sell expensive extended warranties, and often “phish” for personal information about the consumer.

The Attorney General is encouraging consumers to hang up if they receive unwanted telemarketing calls, and beware of any offers of extended warranties. If consumers receive calls on a phone that has been registered with the national “Do Not Call” database, they should provide information on the callers, including the identity of the caller and the number from which the call was placed, to the Consumer Protection Division. Consumers who wish to add a phone to the “Do Not Call” database can do so by calling 1-888-382-1222 (TTY 1-866-290-4236).

The marketing mailings may appear to be an important notice from the consumer’s car dealer or auto manufacturer. There is always an eye-catching warning on the front of the card, such as: “Final Notice: Expiring Auto Warranty.”

Whether by phone or mail, the marketers warn that the consumer’s car warranty is about to expire, and urge the consumer to call a toll-free number or push a button to be connected to a representative in order to renew their warranty.

Maryland consumers should also be aware that the Maryland Telephone Solicitation Act generally prohibits a telemarketer from charging the consumer’s charge card before receiving a written contract signed by the consumer. Therefore, there is usually no legitimate reason for the telemarketer to ask the consumer to provide account information.

To avoid becoming a victim of this scam, Attorney General Gansler offers the following tips:

• Never give out personal financial information such as bank account numbers, credit card numbers or Social Security Numbers over the phone to someone who has called you;
  
• Beware of any mailings that appear to offer extended warranty coverage;
  
• When considering an extended warranty, or any other telephone or mail solicitation, always insist on getting the complete terms and conditions of your agreement in the form of a written contract before you agree to sign up, pay any money or provide your credit card information.
  
• Before entering into any contract, make sure you fully understand its terms and coverage.

There are many things to consider when you’re offered an “extended warranty” or “service contract.” Consumers should beware that certain “extended warranties” do not always provide the peace of mind and financial protection that consumers expected. Many of these contracts, when closely scrutinized, exclude so many items that they really provide very little coverage for outrageous prices.

Make sure that you are dealing with a reputable, stable company. Some consumers have found when they sought to take advantage of the extended warranty or service contract that the company from which they purchased the extended warranty or service contract had gone out of business.

Check out a business with your state Attorney General’s Office and your local Better Business Bureau before you agree to do business with them.