An extended car warranty is a strange product if you think about it. It’s similar to insurance because if everything goes right, you’ll spend the money and never get anything in return other than peace of mind. However, an extended warranty can be invaluable if something goes wrong with your car, with one caveat: the promises it makes must be legitimate.
Unfortunately, warranties are a tempting target for scammers. A warranty doesn’t require anything upfront, making it hard for consumers to spot when an extended guarantee is worthwhile. Unscrupulous companies can take advantage of this to sell people extended warranties that don’t actually cover what they’ve claimed.
That’s exactly what the Federal Trade Commission (FTC) has accused the company American Vehicle Protection Corp (AVPC) of doing. The FTC alleges that the company and its associates called hundreds of thousands of consumers and misled them about the warranties they sold. Keep reading to learn more about the FTC’s lawsuit and what it may mean for you.
Why the FTC Is Suing American Vehicle Protection Corp
The FTC’s allegations against AVPC are a laundry list of deceptive marketing practices. According to the FTC, American Vehicle Protection Corp falsely claimed that:
- It sold “bumper-to-bumper” warranties when it actually excluded a significant number of basic vehicle systems from its coverage. Consumers didn’t find out about those exclusions until they had already purchased the warranties.
- It was associated with car manufacturers or retailers when it was not. AVPC is completely unaffiliated with any manufacturer or dealership but often misrepresented itself as being associated with the location from which consumers had bought their cars.
- Consumers could get a full refund for their purchase in the first 30 days when they could not. AVPC frequently refused to grant refunds to customers that discovered the deceptions AVPC performed.
AVPC sold these warranties for $2800 to $3400 per customer, often through remotely created checks which the FTC specifically bans telemarketers from accepting. According to the FTC, the company brought in more than $6 million from these fraudulent warranties over the past four years.
The Impact of False Warranty Claims
If you’ve bought a warranty from AVPC, you could face several problems. First and foremost, if you make a purchase expecting bumper-to-bumper coverage and don’t receive it, your car is at risk. The entire purpose of a guarantee is to cover repairs for damage or manufacturing flaws.
Bumper-to-bumper extended warranties are intended to cover every system within a car, so they’re often expensive. If your warranty doesn’t actually cover everything you expect, you could wind up paying for both the contract and the repairs. The company has scammed you out of the money without providing the services you expect.
These fraudulent warranties can also cause you to lose out on coverage from other providers. If you’re scammed into buying an extended guarantee from a provider like AVPC, you most likely won’t purchase a genuine warranty from the manufacturer or dealership. These warranties and providers are regulated by California’s lemon laws. A dealership or manufacturer guarantee can help you get your car replaced or refunded if there’s a fundamental flaw. Falling for a fraudulent warranty scam could prevent you from getting that coverage and force you to keep driving a dangerous car.
What to Do If You’ve Bought a Warranty Based on False Claims
If you’ve bought a car from AVPC, you’re not out of luck. You may be able to either have the claims that convinced you to buy the warranty enforced, or receive a refund. Here’s how you can take action against false warranty claims by AVPC or any other provider.
1. Collect Your Documentation
Before doing anything else, collect as much documentation as you can. You should gather items like the original claims made by your provider, any communications you’ve received, and receipts for your purchase of the warranty. These items are essential to prove that you have grounds to make a warranty claim in the first place. They will also help you confirm that the warranty provider made false claims later.
2. Talk to the Provider
Depending on why you believe false warranty claims have been made, you may be able to resolve the situation just by talking to the provider. It’s best to perform this communication by email or certified letter to ensure that you have records of their responses. Explain your complaints and ask them to resolve the situation. If they don’t live up to their original claims, though, it’s time to take action.
3. Get Help
Once a provider has made it clear they won’t be honoring their promises, it’s time to get help. Reach out to a qualified lemon law lawyer to discuss your situation. They can help you structure your communications more professionally and show the guarantee provider that you’re serious. An experienced lawyer can also help you determine exactly how the provider violates state and federal law and what you should do next.
4. Take Legal Action
If the provider still refuses to cooperate with you, you can take legal action. Your lawyer may recommend that you file an FTC complaint or a lawsuit against the car warranty seller. Either way, your lawyer will help you navigate the legal environment and ensure your claim has the best chance of success. Most importantly, you’ll be able to hold your warranty provider accountable for misleading you and anyone else in your situation.
Stand Up Against False Car Warranties
Unscrupulous companies put a lot of work into convincing people to buy their offerings without backing up their claims. Warranty companies have the additional benefit of not providing any services upfront. If you’ve been taken in by a company making false claims about their warranties, you can and should stand up to them.
The expert lemon law attorneys at Johnson & Buxton can help you do just that. Schedule your consultation to learn more about your options. The sooner you take action, the more likely it is that you’ll be able to fight for the coverage you’re owed.