We’ve all seen and heard the auto extended warranties. Many of us have been bothered with robocalls and texts. You may have missed this news, no shocker actually. If you purchased extended car warranty insurance - this is important.

The Federal Trade Commission (FTC) has charged CarShield with deceptive advertising charges. Car Shield will be required to pay a $10 million fine to the Federal Trade Commission over a case involving deceptive advertisements. This is not going back to customers. Defendants are also barred from misrepresentations by its celebrity endorsers, including Ice-T.

CarShield, along with American Auto Shield, LLC, which is the administrator of its vehicle service contracts, will pay $10 million to settle FTC charges that its advertisements and telemarketing for auto extended warranties are deceptive and misleading, and that many purchasers found that many repairs were not “covered,” despite making payments of up to $120 per month. The FTC also alleges CarShield’s celebrity and consumer endorsers made false statements in its ads.

The charges ordered also bars CarShield and AAS from making deceptive and misleading statements in the future and requires them to ensure their endorsers’ testimonials are truthful, accurate, and not deceptive. Other brands are doing the same thing, buyers beware.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection said that “Instead of delivering the 'peace of mind' promised by its advertisements, CarShield left many consumers with a financial headache. Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers' financial anxieties."

The complaint alleges many ads claim that all repairs or repairs to “covered” systems, such as the engine and transmission, will be covered and use language that makes consumers believe CarShield will pay for all necessary repairs. For example, one ad that ran 18,000 times on television stated, “With CarShield’s administrators, they make sure you don’t get stuck with expensive car repair bills like this.” It also touts CarShield auto extended warranties as “your best line of defense against expensive breakdowns.”

The company sells its plans using telemarketers who answer inbound calls and make outbound calls responding to consumers, including those who made web inquiries. Using scripted statements written by CarShield and cleared by AAS, the telemarketers pitch the auto extended warranties and tell consumers that, whether they use a dealer or local mechanic for the repair work, “there is just a $100 deductible for any covered repair.”

However, consumers do not always get what they think they bought when signing up for the auto extended warranties. Instead, the complaint alleges that CarShield’s ads deceptively represent that: 1) all repairs or repairs to “covered” vehicle systems will be paid for under the plans; 2) consumers will receive a rental car at no cost when their car breaks down; and 3) consumers can use the repair facility of their choice for repairs.

Specifically, many consumers could not use the repair facility of their choice, as many do not accept the auto extended warranties. Many consumers also find that repairs they thought were covered are not. In fact, none of CarShield’s auto extended warranties covers all repairs or even repairs to “covered” vehicle systems. Instead, the plans contain myriad exclusions. Consumers with denied claims receive no rental car, while many consumers with “approved” claims must pay a portion of their rental car costs.

In addition, while CarShield’s celebrity endorsers said they had signed up and used the company’s auto extended warranties, in many cases this was not true. They were not “real” customers and had never saved money by using an auto extended warranties. Finally, many CarShield ads deceptively feature consumer endorsers who claim to have saved a specific amount of money using their plans but have not in fact saved that amount.

The order imposes a $10 million monetary judgment against CarShield and AAS, which will be used to provide refunds to defrauded consumers. The full amount of the judgment must be paid to the FTC within seven days of when the court enters the order.

Buyer beware when it comes to extended auto warranties, they are not always what they claim to be.

Video Link: https://youtu.be/zJWaNxmuoXs

You can support me by buying me a cup of coffee. Thanks for subscribing and your support! https://www.buymeacoffee.com/laurenfix

We will be reviewing all of the newest cars on our YouTube channel https://www.youtube.com/@car-smarts

Looking for more automotive news? https://youtube.com/@car-smarts

Additional articles on our website https://www.CarCoachReports.com

"LAUREN FIX'S GUIDE TO LOVING YOUR CAR” Book - https://amzn.to/3ifDi3j

Total Car Score Podcast ► Hosts: Lauren Fix, Karl Brauer and Javier Mota. https://www.revolverpodcasts.com/shows/total-car-score/

Follow our team:

Al Vazquez - <a href="https://www.youtube.com/user/famaus">https://www.youtube.com/user/famaus</a>

Javier Mota - <a href="https://www.youtube.com/user/autosjaviermota">https://www.youtube.com/user/autosjaviermota</a>

> Paul Fix III - @paulfix3 on all social media

_______________

Lauren Fix, The Car Coach is a nationally recognized automotive expert, media guest, journalist, author, keynote speaker and television host. A trusted car expert, Lauren provides an insider’s perspective on a wide range of automotive topics and safety issues for both the auto industry and consumers. Her analysis is honest and straightforward.