Auto Warranty Solicitations Stall Phone Lines Nationwide
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With Americans holding on to their cars longer in the recession, the Better Business Bureau is warning motorists to be "extremely wary" of bogus telemarketers who say their auto warranties are on the verge of expiring.
The deceptive solicitations — which include misleading mailers and high-pressure telemarketing calls — led to more than 140,000 consumer complaints nationwide last year, a 40 percent increase from 2007. And the pestering pitches have continued despite a pending lawsuit.
"We're still getting calls on this all the time," Better Business Bureau spokeswoman Alison Southwick told FOXNews.com. "Personally, I receive these calls all the time, and I don't even own a car."
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Southwick said local BBB offices have reported a "spike" in complaints since the national office warned consumers of the scam earlier this month. In many cases, duped consumers have bought extended service contracts that are not associated with the car manufacturer's warranty.
The value of those extended service contracts is often worthless, Southwick said, since pre-existing conditions are often not covered, proof of maintenance records may be required and restrictions on authorized repair facilities must receive prior approval.
To avoid being scammed, Southwick urged consumers never to give unknown telemarketers personal information over the phone, including Social Security, bank or credit card numbers. She also advised reviewing a contract with all terms and conditions before submitting any payment, as refunds are often difficult to acquire.
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Consumers also can add their phone number to the federal Do Not Call list by visiting www.donotcall.gov. More than 168 million numbers are already registered, according to Federal Trade Commission officials.
Southwick said the auto warranty scam is the latest — and perhaps most pervasive — attempt by telemarketers to trick consumers nationwide. In November, Better Business Bureaus across the country received complaints about offers of slashed interest rates due to President Obama's election victory.
"Scammers are very good at reading the news and learning what the top stories are," Southwick said. "We also hear from consumers quite a lot that they get telemarketers soliciting information around tax time."
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Verizon Wireless filed a lawsuit in March against unidentified telemarketers using autodialers to mask their origin, alleging that more than three million of its customers and employees received calls offering extended car warranties.
The pending lawsuit, originally filed in New Jersey Superior Court, was later moved to federal court and named Explicit Media, of Missouri, and National Auto Warranty Services Inc., of Florida, as defendants. Calls to Explicit Media and National Auto Warranty Services were not returned.
"We're still working toward a resolution," Verizon spokeswoman Debbie Lewis told FOXNews.com. "Our legal teams think this is one of the more widespread telemarketing scams. It's been going on for a long time and seems to be one of the largest, if not the largest, we've seen."
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Verizon alleges the calls were made from myriad numbers with 281, 614, 801 and 562 area codes. A pre-recorded voice message then indicates that the recipient's car warranty is about to expire and encourages them to press "1" for more information. If the recipient asks for information about the company, the lawsuit alleges, the telemarketer simply hangs up.
The lawsuit claims the telemarketers are violating the Federal Telephone Consumer Protection Act, which makes it illegal to use an autodialer to solicit wireless phone users, as well as state fraud and privacy laws.
Representatives in the finance divisions at Detroit's automakers — Ford, GMC and Chrysler — say they have no role in the telemarketing scams.
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"We do not sell or provide customer information to outside marketing firms," GMAC spokeswoman Sarah Comstock said. "We're not involved in it at all."