The Auto Warranty Scam

“We don’t actually send out any paperwork without receiving a down payment.”

This from an article by ConsumerMan, written in 2008, addressing the onslaught of fraudulent extended auto warranty offers by mail and by phone.

And here it is, 2016, and the tide has not turned. In the last couple of months, I have received virtually dozens of these solicitations to purchase an extended auto warranty (the companies not realizing that my Prius is already at 165,000 miles in 9 years, and hence ineligible by anyone’s standards.) Here are just 3 examples:

Auto3Auto2

Auto1

An article at Edmunds.com also addresses this ongoing plague. Granted, there’s no way of telling just from a solicitation that any given company is fraudulent or reputable, but the fact that there are so many of these things hitting my mailbox and email and even my phone is a pretty good indication to me that there is a huge and lucrative market for these things, and wherever there’s money to be made the roaches will scurry out of the woodwork.

By the time your manufacturer’s warranty has expired – many of them run up to 7 years or 110,000 miles or even more – your car’s pretty much past its day and you should think very hard about whether purchasing an insurance policy (that’s what these are) is really worth it.

Beware of high-pressure sales tactics and “limited time” offers. Research any company and/or policy carefully before sending any money to anyone. And for heaven’s sake, if a salesman tells you, “We don’t actually send out any paperwork without receiving a down payment,” run away fast.

Be careful out there.

The Old Wolf has spoken.

5 responses to “The Auto Warranty Scam

  1. I don’t believe there /is/ such a thing as an honest aftermarket warranty company – the whole model collapses if they don’t follow the game-plan to the letter. Which is to have a ton of exclusions to deny all claims for one reason or another (“It’s an Electrical failure!” Well, almost every system is tied to electrical at one point…) and a very byzantine mechanism to delay or deny coverage.

    You must wait for their adjuster to inspect the car and complete his detailed report before repairs can begin, and they can take weeks to get to you, and even longer to complete and turn in the report… If you’re on vacation or trying to run a business you can’t wait – they count on that. “You started repairs already – Claim denied.”

    Then go out of business and start a new company up when the money runs out or the insurance regulators get too close. That they had a year to get the new company all registered and licensed to go ahead of time is a clue that they plan these ‘failures’ well ahead of time…

    They select connected office suites with multiple entrances and addresses, so they can abandon “Company A” at Suite 101 and start “Company B” at Suite 103 (with the Suite 105, 107 and 109 entrances for later…) and hide the reality without actually moving.

  2. There have been corporate Sysops (google up BOFH) and security companies tracking back the Botnets to their “Command and control servers” and hopw the orders are issued, and then getting the critical server shut down (TOS and AUP violations) and effectively decapitating the Botnet from operational control.

    Same thing with Botnets giving their commands over IRC Chat, Twitter or Facebook, IM’s, or other “safer” methods that really aren’t. They can be disrupted too.

    The personnel responsible often don’t want to get any publicity or take credit for it, because that’s a shiny red flag to a raging bull. Just whistle and walk away.

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