Do you own a car or truck? Do you have a phone number? An email address? How about a postal address or any other way for someone to contact you?
If you answered yes to any of the possibilities above, you’re probably one of the 7 in 10 U.S. adults that have encountered an extended car warranty scam within the last year. Call-blocking service, RoboKiller, estimates fraudsters placed nearly 13 billion such calls in 2021, accounting for 18% of all scam calls.
We’ve often said scammers follow the news and take advantage of the latest crises, so the recent spike in inflation is fertile for exploitation. They know consumers are searching for ways to preserve and protect their hard-earned money.
With a simple oil change commonly approaching the $100 mark, it stands to reason a serious repair could easily climb into thousands of dollars, making car warranties more attractive.
While car warranty scams have been around for years, at the BBB we have seen an alarming uptick in calls and walk-ins recently from consumers that have been contacted regarding purchasing or extending their car’s warranty.
Be aware there is a difference between a manufacturer’s extended warranty and what legitimate third-party companies are offering. A warranty is a manufacturer’s guarantee that comes with a new car and covers a specific time frame or mileage limit. Used cars may also come with some type of warranty coverage from the dealer.
What third-party scammers offer are not warranties, but service contracts that are basically a form of insurance. Legitimate car dealers can also sell service contracts and industry experts agree that a factory-backed service contract is best.
There are honest, legitimate service contract providers. However, most of the notifications or phone calls you get are from scammers, either wanting to sell you a high price, nonexistent or inferior product, or even worse, get your credit card and personal information.
Here are some tips to protect yourself from these scams:
• Don’t answer a call if you don’t recognize the number. Let it go to voicemail.
• Scammers often use spoofing tools to display any name or number they choose for their caller ID, so don’t assume the call is legit because it shows your vehicle’s manufacturer’s name or something like “Vehicle Warranty Department.”
• If you get a robocall, it is almost certainly a scam. Simply hang up.
• Don’t follow instructions to press a number on your phone to avoid future unwanted calls. Scammers do this to confirm they’ve reached a working number they can call again.
• If you do talk to someone, don’t be pressured by a “limited time only” ploy. Scammers want you to act first and think about the offer later.
• If you are told your vehicle’s warranty is about to expire, check with your dealer or your owner’s manual to see when your factory warranty expires. Don’t trust unsolicited phone calls or mailings.
• Before you sign an extended warranty service contract, research the contract seller and the company’s administrator responsible for paying claims. Check for complaints against the company with us at the BBB at 419-223-7010 or the Ohio Attorney General’s office.
• If at all possible, stick with the manufacturer’s extended warranty coverage. At least you know you’re dealing with someone you can trust.
• Before you sign anything, carefully read and know exactly what is and isn’t covered in the service contract.
• Lastly — it goes without saying — never, ever provide personal or credit card information unless you have verified and absolutely know you’re dealing with a legitimate company you’ve already had a business relationship with.