North Carolina Department of Justice

North Carolina Department of Justice

North Carolina Department of Justice
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Beware of auto warranty pitches

Friday, July 17, 2009

North Carolina consumers are getting phone calls and post cards in the mail warning that their car’s warranty is about to expire and needs to be renewed immediately.  Some of these companies also advertise on national television.   These messages are designed to look and sound like they come from your car dealer or auto company.  If you respond by calling the number listed, you’ll get a high-pressure sales pitch for what’s called an extended warranty but is actually a service contract.

Consumers should avoid doing business with any “extended warranty” companies that contact them by phone or by direct mail.  True warranties can only be issued by the car’s manufacturer.  Companies that pitch these “extended warranties” rarely pay claims.  When consumers sign up and then cancel, the companies make excuses about why the promised refund checks are delayed.  Even if the consumer receives a refund, the company will often take out a “cancellation processing fee.”

If you’re interested in purchasing a service contract for your car, check with a reputable car dealer for recommendations on service contract companies.  Then check out the company with our office and the local Better Business Bureau.

If you’ve been the victim of a similar scam or want to check out a company, please contact Attorney General Roy Cooper’s Consumer Protection Division for assistance at 1-877-5-NO-SCAM.