How to Spot Extended Warranty Scams

It seems like scams and rip-offs are everywhere nowadays. As a consumer, you’re always on high alert for fraudulent sales and practices. An industry these scams are prominent in is the auto warranty industry. Here are things to help you recognize a legitimate warranty offer, how to identify when a warranty company is a scam, and what to do if you’ve been burned.

How to Spot Extended Warranty Scams

Know the Facts

Due to the history of warranty scams that have occurred, it’s understandable to be wary of third-party warranty companies. However, there are several trustworthy companies that offer great, reliable service; you just have to do the research to find them. Look into the company’s website to find testimonials of customers to learn about people’s experiences with the company. Also, look into the company’s affiliation and partnerships with companies that are reliable, like the Better Business Bureau and the Vehicle Protection Association. US Fidelis is a company that ended up going bankrupt due to their fraudulent schemes. They received 1,100 customer complaints in 36 months, which led to the investigation and deterioration of their seemingly trustworthy company. They made their customers believe they were affiliated with their auto dealers and would contact people from their “do not call” list. They ultimately plead guilty to felony stealing, insurance fraud, and more. Be knowledgeable about the company’s history and reputation, and you should be able to spot the scammers.

Red Flags

There are some tactics scammers use to get people to fall for their sales. A main tool they utilize is robo-dialing. This is when a machine calls a list of phone numbers who then hear a recorded message with information on the product they’re trying to sell. If this happens to you, don’t fall for it. It is best to talk to a real person about purchasing warranty coverage. Also, be wary of telemarketers who offer “limited-time offers.” This is a tactic to try and hook customers with seemingly discounted deals. Ask for a fax or email of the contract to ensure their credibility because an established company would allow you to see the contract before buying. Don’t give in to the sense of urgency robo-dialers or telemarketers instill in their messages.

If You’ve Been Burned

If you’ve fallen victim to an auto warranty scam and you found out after the fact, try to resolve it with the company itself if they are reachable. If for any reason you can’t solve the problem with them, file a complaint with either the Federal Trade Commission or the Better Business Bureau. Their direct involvement may not be guaranteed, but by filing complaints with these companies, you can possibly expose the company or patterns of scams so others don’t get sucked into the scam.

Be wary of potential warranty scams. Know the signs of fraud, know what a reliable warranty company offers, and know what to do in case you do fall for a scam. One company you can trust with vehicle coverage is Warranty Direct. With helpful customer service representatives, several coverage plans to choose from, and an A+ rating by the BBB, your car’s coverage contract will be in good care.

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