CAR WARRANTY TELEMARKETING

WOO HOO! YAY! OH BOY!

Texas, federal authorities sue auto warranty telemarketers behind 'robo-calls'
By Marcy Gordon
ASSOCIATED PRESS
Friday, May 15, 2009
WASHINGTON — Federal regulators filed suits Thursday against several companies that they say are behind a national wave of spam "robo-calls" that warn people their auto warranties are expiring and offer new service plans.
Federal Trade Commission officials asked a federal court in Chicago to halt the illegal telemarketing campaign.
The FTC named Voice Touch Inc. and Transcontinental Warranty Inc., which it called the telemarketer and promoter of the scheme, respectively, in the lawsuits. The agency is seeking injunctions requiring them to return allegedly ill-gotten gains.
In Austin, Texas Attorney General Greg Abbott filed a separate lawsuit against three other companies, saying they conducted a "campaign of deceptive and abusive telemarketing calls" to sell car service contracts.
Abbott's lawsuit says the companies used automated dialing systems to make the calls, which went through even when consumers had registered for federal or state do-not-call lists.
His lawsuit names SCM Media Inc., On Point Media Inc. and Pacific Guard Warranty LLC.

In the 512 area code alone, the lawsuit says, the companies made 4,300 calls between Feb. 4 and Feb. 6.

FTC Chairman Jon Leibowitz called the warranty calls "one of the most aggressive" telemarketing schemes the agency has ever seen.
"I'm not sure which is worse, the abusive telemarketing tactics of these companies, or the way they try to deceive people once they get them on the phone," Leibowitz said. "Either way, we intend to shut them down."

It took some sleuthing to determine what companies were responsible because they made "extraordinary" efforts to conceal their identities by masking their true phone numbers, he said. Such concealment by telemarketers is illegal, as is refusal to promptly identify themselves to consumers.
None of the companies returned calls for comment.
Attorneys general in Arkansas, Indiana and Missouri have taken similar actions over the calls that offer deals on extended warranties, which have brought about 300,000 inquiries and 4,000 complaints to the Better Business Bureau from consumers in the past two years.

The calls target people regardless of whether they have warranties or own cars. Telephone numbers are called randomly, and a computerized voice leaves messages falsely claiming that auto warranties are about to expire, regulators say.
The telemarketers are misrepresenting service contracts, which consumers have to pay for, as warranties, which are included in the price of buying a vehicle, the FTC says.
"Out of warranty? You are still eligible to reactivate warranty coverage. This is the final call before we close the file." The recording typically gives the caller an option to stop receiving calls, but the calls continue to come even if consumers opt out.
If people agree to buy policies, the companies often don't let them see the contracts until they agree to pay. And some people don't learn until they've spent thousands of dollars that the deals don't cover many types of repairs, according to regulators.