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Places in Iowa Experiencing Surge in Auto Warranty Scams

There are so many scams these days that people must be vigilant when they receive a phone call from telemarketers or anyone seeking their personal information. These scams have become more prevalent during the pandemic, when most people were home and able to answer their phones. The Federal Communications Commission says auto warranty robocalls were the top call complaint filed by consumers in 2020, and the trend is continuing this year. In fact, according to Iowa Information, recently there has been a surge of auto warranty scams, particularly in northwest Iowa, the news site’s area of coverage.

The way it goes, the caller on the other end of the line will remind the person to renew their vehicle warranty before they close your file. Car dealerships warn these are fraudulent calls to get your personal information, or they are usually a bad deal from unreputable companies.

Consumers can get confused between an auto warranty and a service contract, especially if they have owned their car for a long time. Drivers often are not aware of the status of their car warranty and many scammers know that and take advantage by convincing them their auto warranty will expire if they don’t extend or purchase another.

An auto warranty from the manufacturer is a contract to fix certain defects or malfunctions for a specified period after you purchase a vehicle. The warranty is typically included when you buy a new car. Used cars also might come with some type of warranty coverage.

Auto service contractsare often referred to as “extended warranties” and sold by auto manufacturers, dealers, and independent companies, and can be bought anytime. They are not for everyone. They can be expensive, and their coverage can vary widely. They can help pay for repairs on a vehicle’s major systems, such as the transmission and engine, when the manufacturer’s warranty expires. Some include benefits such as scheduled oil changes, towing services, rental car coverage, and travel insurance.

If your car is unreliable and you are unable to pay for mechanical repairs, an extended car warranty may
help, but know that they may not cover regular car maintenance or damage due to normal wear and tear. You also cannot use an extended car warranty until the original manufacturer’s warranty expires.

There are reputable extended car warranty companies around and you can also purchase warranties directly from auto manufacturers or your dealership, but they do not call you out of the blue. It is the customer that calls them.

When in doubt about the legitimacy of a phone call, call the local dealership where you purchased your car or your car’s manufacturer to verify the status of your warranty. Never give out personal information over the phone, such as your social security number or bank account information.

To learn more about auto warranties or to report a scam, visit www.consumer.ftc.gov.

