Do you own a car or a truck? Do you have a phone number? A mail address ? How about a mailing address or some other way for someone to contact you?
If you answered yes to any of the above possibilities, you are probably one of the 7 in 10 American adults who have faced an extended car warranty scam in the past year. Call blocking service, RoboKiller, estimates that fraudsters made almost 13 billion such calls in 2021, or 18% of all fraudulent calls.
We’ve often said that scammers follow the news and take advantage of the latest crises, so the recent spike in inflation is ripe for exploitation. They know consumers are looking for ways to preserve and protect their hard-earned money.
With a simple oil change typically approaching the $100 mark, it stands to reason that a serious repair could easily run into the thousands of dollars, which makes car warranties more attractive.
While car warranty scams have been around for years, at the BBB we have recently seen an alarming increase in calls and walk-ins from consumers contacted about purchasing or extending their car warranty.
Be aware that there is a difference between a manufacturer’s extended warranty and what legitimate third-party companies offer. A warranty is a manufacturer’s warranty that accompanies a new car and covers a specific period or mileage limit. Used cars may also be covered by some type of dealer warranty.
What third-party scammers offer are not warranties, but service contracts which are essentially a form of insurance. Legit car dealerships can also sell service contracts, and industry experts agree that a factory-guaranteed service contract is best.
There are honest and legitimate service contract providers out there. However, most of the notifications or phone calls you receive are from scammers, wanting to sell you a high, non-existent or lower priced product, or even worse, to get your credit card and personal information.
Here are some tips to protect yourself from these scams:
• Do not answer a call if you do not recognize the number. Let it go to voicemail.
• Scammers often use spoofing tools to display the name or number they choose for their caller ID. So don’t assume the call is legitimate because it says the name of your vehicle’s manufacturer or something like “Vehicle Warranty Department.”
• If you receive a robocall, it is almost certainly a scam. Just hang up.
• Do not follow the instructions for dialing a number on your phone to avoid future unwanted calls. Scammers do this to confirm that they have reached a working number that they can call again.
• If you’re talking to someone, don’t be swayed by a “time-limited” scheme. Scammers want you to act first and think about the offer later.
• If you’re told your vehicle’s warranty is about to expire, check with your dealer or owner’s manual to find out when your factory warranty expires. Do not trust unsolicited phone calls or mailings.
• Before signing an extended warranty service contract, research the contract seller and the company administrator responsible for paying claims. Check complaints against the company with us at the BBB at 419-223-7010 or the Ohio Attorney General’s Office.
• If possible, honor the manufacturer’s extended warranty. At least you know you’re dealing with someone you can trust.
• Before signing anything, read carefully and know exactly what is and is not covered by the service contract.
• Finally, it goes without saying, never provide personal or credit card information unless you have verified and are absolutely sure that you are dealing with a legitimate company with which you have had a prior relationship. ‘business.
Reghan Winkler is executive director of the Better Business Bureau serving West Central Ohio. The BBB is available on the Internet at bbb.org/us/oh/lima.