Maryland Warns Of Extended Warranty Scheme

Beware of telemarketers selling extended auto warranties

July 17, 2008

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Consumers around the country are being targeted in a a marketing campaign attempting to sell extended auto warranties, calling them on their cell phones and landlines, as well as through postcards, letters and emails.

The marketers offer to sell expensive extended warranties, and often "phish" for personal information about the consumer.

In Maryland, Attorney General Douglas F. Gansler says consumers should simply hang up if they receive unwanted telemarketing calls, and beware of any offers of extended warranties.

The marketing mailings may appear to be an important notice from the consumer's car dealer or auto manufacturer. There is always an eye-catching warning on the front of the card, such as: "Final Notice: Expiring Auto Warranty."

Whether by phone or mail, the marketers warn that the consumer's car warranty is about to expire, and urge the consumer to call a toll-free number or push a button to be connected to a representative in order to renew their warranty.

While state laws vary, Gansler says Maryland consumers should also be aware that the Maryland Telephone Solicitation Act generally prohibits a telemarketer from charging the consumer's charge card before receiving a written contract signed by the consumer. Therefore, there is usually no legitimate reason for the telemarketer to ask the consumer to provide account information.

To avoid becoming a victim of this scam, Gansler offers the following tips:

• Never give out personal financial information such as bank account numbers, credit card numbers or Social Security Numbers over the phone to someone who has called you;

• Beware of any mailings that appear to offer extended warranty coverage;

• When considering an extended warranty, or any other telephone or mail solicitation, always insist on getting the complete terms and conditions of your agreement in the form of a written contract before you agree to sign up, pay any money or provide your credit card information.

• Before entering into any contract, make sure you fully understand its terms and coverage.

There are many things to consider when you're offered an "extended warranty" or "service contract."

Gansler says consumers should beware that certain "extended warranties" do not always provide the peace of mind and financial protection that they might expected. Many of these contracts, when closely scrutinized, exclude so many items that they really provide very little coverage for outrageous prices, he said.

Make sure that you are dealing with a reputable, stable company. Some consumers have found when they sought to take advantage of the extended warranty or service contract that the company from which they purchased the extended warranty or service contract had gone out of business.

Check out a business with your state Attorney General's Office, your local Better Business Bureau and online consumer sites before you agree to do business with them.

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