Auto Warranty Scams on the Rise

They come at every time imaginable -- morning, noon and night. They come to your home phone, cell phone, your office, even to numbers listed on the Do Not Call registry.

Deann Jaffe knows all too well about these phone calls. DJ as her friends call her, says she is sick of them, yet fears for others who might not know what to do.

When she picks up the phone she hears -- your car warranty is expired, would you like to extend it?

At first, DJ thought it was legit, but when the callers started asking for her personal information, that's when she knew something wasn't right. She began asking the telemarketer questions, and when she did -- some of them hung up, others wouldn't give her a straight answer.

Luckily, for DJ she never gave out any information and didn't pay out any money. But what about those who might have or don't know about this scheme?

Nationwide, the Better Business Bureau received more than 27,000 complaints against extended warranty companies in 2007. Last year, that number jumped up 40%, to a whopping 140,000 complaints.

The numbers called by the telemarketers seem to be picked at random, and without any previous knowledge about the consumer's actual car or warranty information. To make matters worse, people that have registered their number on the Do Not Call List are still receiving these calls.

Attorney Generals in several states are investigating where the calls are coming from and are looking at violations of the federal law.

In 2007, New Jersey's attorney general, Anne Milgran order a company from Howell, NJ, to pay $120,000 in fines to resolve complaints of unfair and deceptive marketing in the sale of auto warranties and violated Do Not Call regulations.

The BBB says EVERYONE should be wary of any telemarketing calls and mailers claiming your auto warranty has or is about to expire.

The Better Business Bureau offers the following advice:

* Never give personal information over the phone to an unknown telemarketer, including social security numbers, bank or credit card numbers over the phone.

* When considering an extended contract or any other type of telephone solicitation, insist on getting a contract in which all terms are clearly explained, and read your auto manufacturer's warranty and contact your dealer so you are not purchasing duplicate coverage.

* Before purchasing extended warranty coverage, consumers should always check the company out first with the BBB.

Know Your Rights:

* Consumers can place their phone numbers on the federal "Do Not Call List" by visiting www.donotcall.gov.

The Federal Trade Commission website gives these tips if you are still receiving unwanted calls from telemarketers.

Report Violations of the National Do Not Call Registry

If your number is on the National Do Not Call Registry, you should get calls only from those companies with which you do business — or those that have your permission to call. If you get calls from a company you don’t have a relationship with — or from a company you have told not to call you — report it. Jot down the name and number of the caller, and the date and time of the call. To report violations of the National Do Not Call Registry, call toll-free 1-888-382-1222 (TTY: 1-866-290-4236).

Report a Scam

Fight telephone fraud. Report telephone scam artists to the Federal Trade Commission and your state Attorney General. The Telemarketing Sales Rule gives these local law enforcement officers the power to prosecute fraudulent telemarketers who operate across state lines.

To learn more about how to recognize and report phone fraud, go to
www.ftc.gov/phonefraud.