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FTC to crack down on deceptive car warranty 'robocalls'

If you’ve been getting unsolicited calls to extend your car warranty, the FTC promises help.

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If you’ve been getting unsolicited calls to extend your car warranty, the FTC promises help.

WASHINGTON — Federal regulators are close to filing lawsuits against companies behind a national wave of spam "robocalls" that warn people their auto warranties are about to expire and offer new service plans, two senators said Tuesday.

The Federal Trade Commission has started investigations into several companies involved in the deceptive calls, and the agency expects to bring cases against them within days, said Sens. Charles Schumer, D-N.Y., and Mark Warner, D-Va., who both have received the car warranty robocalls.

The message "Your Car Warranty Has Expired," offering a deal on an extended warranty, already has brought about 300,000 inquiries and 4,000 complaints to the Better Business Bureau from consumers who received the calls over the past two years. The calls come even if the consumer has signed up for the national "Do Not Call" registry, which is maintained by the FTC.

"Law enforcement action in this area can be expected imminently," FTC Chairman Jon Leibowitz said Monday in a letter to Schumer. A spokeswoman for the agency declined further comment Tuesday.

The calls target people regardless of whether they have warranties or even own cars. They have become such a nuisance that officials in 40 states are investigating the companies behind them.

About three dozen companies offer contracts similar to insurance policies, pledging to pay for car repairs in exchange for fees paid up front, according to the Better Business Bureau. They call numbers randomly and leave messages with a computerized voice telling people, falsely, that their auto warranties are about to expire.

"Out of warranty? You are still eligible to reactivate warranty coverage. This is the final call before we close the file," the messages say. The recording typically gives the caller an option to stop receiving calls, but they continue to come even if consumers opt out, officials say.

If people call back and agree to buy policies, the companies often don't let them see the contracts until they agree to pay, the Better Business Bureau says.

And some people don't learn until they've spent thousands of dollars that the deals don't cover many types of repairs.

"It's about time these robocalls were terminated," Schumer said. "This prompt, aggressive action by the FTC should provide a bit of relief to the Americans besieged by these fraudulent calls."

Been called?

If you have received a pre-recorded call about extending your vehicle's warranty even though you are on the national "Do Not Call" registry, you can file a complaint though the FTC.

FTC to crack down on deceptive car warranty 'robocalls' 05/12/09 [Last modified: Wednesday, May 13, 2009 11:03am]
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