AG wants public's input on car warranty scam

Have you received a phone call recently regarding buying an after-market warranty for your car? If you have, you're not alone. This week, Attorney General Dustin McDaniel issued this consumer alert to notify consumers about these calls and about efforts to stop them.

In many cases, the sales pitch call for the car warranties is done by a computer. Numbers appear to be chosen at random by a computer and numerous automated calls are made simultaneously. The entity responsible for the calls appears to have made no effort to exclude phone numbers that are registered on the National "Do Not Call" list. Also, even if a consumer chooses the opt-out option in the call's message, it is typically ignored. In addition to violating telemarketing laws, the price of the warranties offered is inflated above and beyond the limited value, if any, of the warranty coverage offered.

"Any way you look at it, this operation is a bad deal," said McDaniel. "Many of the calls are not only annoying but in direct violation of consumer protection laws. My office is actively investigating these practices and will work to put a stop to them."

The Public Protection Department of the Attorney General's Office has received hundreds of complaints about these car warranty calls. As a result, investigations are underway. The entities responsible for the calls have made the investigation more difficult by using fake numbers for the purpose of caller identification systems, a practice called, "Caller ID Spoofing." That practice also violates the law and is an indication that the underlying offer is questionable. Investigations are ongoing in Arkansas and across the country.

If you are interested in an after-market warranty for your car, the Attorney General advises that you shop around for the best coverage and price and not respond to unsolicited telemarketing offers.

If you receive an unsolicited car warranty sales call, hang up immediately but try to capture the number from which the call originated. Report the call and that number to the Public Protection Department of the Attorney General's Office at (501) 682-2341 or 800-482-8982 and to the Federal Trade Commission (FTC) through its Web site, www.ftc.gov, or by calling (877) FTC-HELP.

Following up on this Consumer Alert, McDaniel asked Arkansans to contact the Attorney General's office with information they may have gathered after being called by telemarketers selling auto warranties.

"The Attorney General's office is investigating numerous potential legal violations by the people making the calls," McDaniel said. "We need your help to provide us with any information you can gather such as the name of the company or the phone number they called from."

Currently, 40 Attorneys General are involved in a Multi-State investigation of this situation. While Multi-State groups often act as a group when suing companies, the Arkansas Attorney General's office is considering separate action and is asking Arkansans to help.

Arkansans can call the Public Protection Department of the Attorney General's Office at 501-682-2341 or 800-482-8982 or send an e-mail to oag@arkansasag.gov.