FTC Sues Shady Warranty Companies

By Staff Writer February 10, 2022

A Florida-based group of defendants has been accused by the Federal Trade Commission of calling hundreds of thousands of consumers nationwide to pitch them expensive “extended automobile warranties” using deceptive telemarketing tactics.

According to a complaint filed in federal district court, American Vehicle Protection Corp. (AVP) and related defendants bilked consumers out of more than $6 million over the last four years, pretending to represent their dealer or car manufacturer, and providing coverage much more limited than represented.

“AVP blasted consumers with illegal calls and made bogus claims about bumper-to-bumper warranties,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The truth is that the warranties didn’t come from the manufacturer, didn’t cover the repairs people needed, and weren’t sold legally. We are holding AVP accountable.”

According to the complaint, AVP and several related corporate and individual defendants headquartered in Pompano Beach, Fla., violated both the FTC Act and the commission’s Telemarketing Sales Rule (TSR) by calling consumers, many of whom were on the Do Not Call Registry, and attempting to sell them the warranties.

In addition to misrepresenting that they either are, or are associated with, the consumers’ vehicle manufacturer or dealer, the defendants’ telemarketers have made false promises that they can provide “bumper to bumper” or “full vehicle” coverage for prices ranging between $2,800 and $3,400. They also falsely claimed that consumers can get a full refund of their down payment or full payment within 30 days of buying the warranty if they are not happy with it.

In filing the complaint, the commission is seeking an order barring the defendants from such illegal conduct, from violating the TSR through their illegal and deceptive telemarketing, from remotely creating and depositing remote checks, from violating the DNC Registry rules by calling consumers whose phone numbers are on the Registry, and from failing to pay the fees required to access the numbers on the Registry and scrub them from their call lists.

The commission filed the complaint in U.S. District Court for Southern District of Florida.

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Last modified on Friday, 18 February 2022 15:33