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Car warranty scams

On Behalf of | Jan 20, 2019 | Consumer Protection

Drivers in Pennsylvania and throughout the nation should be wary about phone calls or letters about their car’s warranty. A company in Miami used robocalls to make victims believe that they were being contacted by a manufacturer or car dealer about extended warranty offers. The Federal Trade Commission says that it is refunding roughly $4 million to about 6,000 people who fell for the scam.

The products that were sold did not provide the level of coverage that customers were promised. Those who bought service contracts said that they could not get refunds for the $1,300 to $2,900 that they had spent. Companies that sell these service contracts often use pressure tactics to get people to buy. They may claim that an offer is only good for the day, or they promise that the customer has time to cancel the contract after it has been purchased.

Ideally, a car owner will not purchase an extended warranty or service contract. Instead, it is usually better to purchase a reliable vehicle and maintain it properly. Car owners are generally better off putting money that would have gone to a service contract into a vehicle repair fund. Those who do buy a service contract should buy one directly from the manufacturer and not do so until reading the terms of the deal ahead of time.

If a company makes a misrepresentation about the products or services that it offers, it could incur financial or other penalties. Victims of fraud could be entitled to a refund or punitive damages in a settlement or after a trial. A victim may use a service contract or statements from a company representative as proof that fraud occurred. An attorney may help to gather evidence or otherwise assist a fraud victim in other ways throughout the legal process.

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