Coruscation

The New York Times

Automobiles
States Investigate Warranty Sales Calls
By CHRISTOPHER JENSEN
Published: November 9, 2008
Attorneys general in several states are investigating what they suspect are telephone sales scams promoting extended car warranties.

ATTORNEYS GENERAL in several states are investigating what they suspect are telephone sales scams promoting extended car warranties, often by calling cellphones or numbers that are listed on do-not-call registries.

The Connecticut attorney general, Richard Blumenthal, said his office had received "a huge number of complaints -- hundreds of complaints." Connecticut is part of a large, multistate investigation into such calls, he said.

Another of those states is Iowa. "They are trying to trick you into believing that the communication is coming from the auto manufacturer and that your warranty is about to expire and you need to do something to extend that warranty," said William L. Brauch, a special assistant attorney general and director of the consumer protection division in Iowa.

But automakers are not behind the policies, Mr. Brauch said, and after purchasing such a policy it may be difficult if not impossible to get reimbursed for a repair.

"A number of these companies tend to routinely deny paying, they come up with various interpretations, shall we say, of the agreements, which they say justify them not covering whatever the problem might be," he said.

Mr. Blumenthal said the investigation was looking at whether the policies were legitimate as well as the use of misleading and deceptive sales practices. That includes telling people that their warranties have expired and that urgent action is needed.

Investigators are also looking at violations of the federal do-not-call registry, Mr. Brauch said.

In many cases the callers are hiding the telephone number from which they are calling.

"They are using what are called ghost, or spoof, telephone numbers," Mr. Blumenthal said. "They use technology that masks the source of their calls, which is troubling because consumers can't call them back."

The originating phone number that showed up in recent calls to some New Yorkers was traced to a disconnected phone in Nebraska. It belonged to an illegal immigrant who was arrested in a raid on a meat-packing plant and was deported, said Leah Bucco-White, a spokeswoman for the Nebraska attorney general's office. Last year, a company from Howell, N.J., agreed to pay $120,000 in fines to resolve complaints filed by the New Jersey attorney general, Anne Milgram, that it had engaged in unfair and deceptive marketing in the sale of automotive warranties and that it had violated do-not-call regulations.

The company, Corfacts Inc. (also known as Metro Marketing, National Warranty Division and Warranty Warehouse.com) did not acknowledge wrongdoing. But Corfacts signed a consent order and agreed not to violate the state's consumer protection or do-not-call laws.

For consumers on the receiving end of these calls there is not just the potential to make a bad purchase, but inconvenience and aggravation.

Lon Weston, owner of the Sherman Inn in Bethlehem, N.H, received a phone call recently telling him that his vehicle's warranty had expired, but he could extend it. Mr. Weston was aware that the warranty on his truck had expired. It was, after all, 10 years old. What bothered him was yet another violation of his telephone number's do-not-call status.

"I get a lot of these automated calls," he said. "They are almost impossible to trace."

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