Target 2: Extended Auto Warranties - WBAY

Target 2 Consumer Alert

Target 2: Extended Auto Warranties


It could be a letter or a phone call offering to extend your car's warranty. The schemes have affected tens of thousands of people and caused millions of dollars in losses.

A Menasha woman contacted Target 2 with this very concern.

Eloise Bangert got a call from a pushy telemarketer pitching an extended auto warranty.

"I said, 'Well, I couldn't afford to buy that,' and he said, 'Oh well, what is going to happen when something happens to the car? Who is going to pay for that?' and on and on, and, 'Do you have a credit card?'"

Bangert gave the man her credit card information for a $200 down payment.

"That's where I made the mistake."

She is not alone. Every year, thousands of consumers are bombarded by robocalls or mailings about car warranties.

Authorities say most of them are completely deceptive.

Dan Taylor, a US Postal Inspector, said, "Customers or victims thought they were buying an extension of their manufacturer's warranty, and reality they were just service contracts."

What's the difference? A service contract covers just some repairs. A warranty is underwritten by a car manufacturer.

"The victims did receive a small amount of coverage, but it was nowhere near what they were expecting based on the phone call," Taylor said.

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And if consumers try to call for a refund?

"It was frustrating. Every time you try to call, they would never answer to pick up," Bangert said.

If you are looking for an extended auto warranty, call your car's manufacturer directly or work through a local dealership.

Insist on details of the service agreement in writing:

  • What is covered?
  • What is not covered?
  • What are you responsible for (e.g., do you "void" the agreement if you can't prove regular oil changes or check-ups)?
  • Do you have to pay a deductible before the service agreement kicks in payment?
  • Are claims paid directly to the repair shop, and how soon should payment be expected?
  • When does coverage begin (i.e., does it "overlap" your manufacturer's warranty or does it begin as soon as that warranty expires)?
  • Can you cancel the agreement after a review period, say within 7 or 30 days?

Postal inspectors say any time you're dealing with a telemarketer, be careful. Ask for details on the refund policy and get it in writing.

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