Postcards, letters, and phone calls all warn about expiring car warranties
Read more: Local, Consumer Reports
Example of postcard selling extended service contracts
JEFFERSON CITY -- They are designed to look official...and to create a sense of urgency.
You've probably received a post card or letter and more recently a phone call warning you that your car's warranty is about to expire.
How do they know so much about your personal business? Is it a scam or just clever advertising?
With glossy pictures and bold print saying "final notice" and "warning: your warranty has expired,” people naturally pay attention.
Tom Stegeman, Mike Kehoe Auto Group: "If you have a car that's 2, 3 or 4 years old, you’re very likely to be getting a lot of those types of solicitations from companies all over the county, potentially all over the world."
They're designed to show up in your mailbox looking like official correspondence from your dealer or your vehicle's manufacturer. Instead they're from companies you've probably never heard of trying to sell you an extended service contract.
Travis Ford, Missouri Attorney General's Office: "One concern is just that the mailing looks very misleading. The second concern is we have a lot of consumers who sign up for them, pay the up-front fee and then the company does not follow through on the promises."
Making the offers seem even more legitimate is the personal information they contain about you. Along with your name, the ads mention the make and model of your car; some even show stock photos of your type of car.
“It's very easy to do,” Ford explains. “They simply do a records search with the Department of Revenue, see what kind of vehicle you own and when it was purchased, figure out how many miles are offered under warranty from the factory and try to time their mailings so it looks like it's arriving as your factory warranty is expiring."
So is it a scam or just clever advertising?
“A scam is anything where you are basically fooled into paying for something that you don't end up getting,” Ford answers. “So if a company is intentionally deceiving consumers and collecting money and not delivering that would be very illegal and a scam and we'd be very interested in looking into that company."
Ford says there are many legitimate companies out there selling extended service contracts, he says consumers just need to do their homework and make sure a company is reputable before purchasing anything.
Tom Stegeman, Mike Kehoe Auto Group: “If you buy a warranty that's good for five or six years, is the company going to be around in five or six years?”
Bottom line, don't take the information contained in the mailings at face value, your car may still be under warranty, or the warranty may have expired long ago. Also you may have already purchased an extended warranty when you bought your vehicle.
To find out about your warranty, check your vehicle's manufacturers website or check in with the dealer where you bought the car.
All companies selling extended service contracts for motor vehicles must register with the Missouri Department of Insurance.
Consumers who receive offers can check to make sure the company is registered by calling (800) 726-7390.
