Saturday, July 4, 2015

Pa., 7 other states target 'extended warranty' scheme

The states accused a Missouri company of making misleading pitches - some via illegal robo-calls to cell phones - offering automobile service contracts it claimed were "extended warranties."

Pa., 7 other states target 'extended warranty' scheme

0 comments

Pennsylvania was one of eight states that joined yesterday to sue U.S. Fidelis, a Missouri company they accused of making misleading pitches - some of them via illegal robo-calls, even to cell phones - that offered automobile service contracts it claimed were "extended warranties." You can read here about the lawsuits, which seek restitution for consumers who were allegedly defrauded.

Here are some of the "numerous unfair and deceptive business practices" by U.S. Fidelis cited in the lawsuit, according to an announcement from the Pennsylvania Attorney General's Office:

  • False statements that coverage would be the same as the original manufacturer's warranties.
  • Implying that products were associated with manufacturers or dealerships, including claims that they were authorized "factory warranties" or "extended warranties."
  • Deceptive claims about the extent of coverage, including terms such as "bumper-to-bumper," "Gold" and "Platinum" warranties.
  • Misleading statements implying that the company had official information about consumers' vehicles.
  • Bogus claims about "limited time" or "final" offers.
  • Failure to honor "100% money back guarantee" offers.
  • Repeated sales calls to consumers registered on the "Do Not Call" list.
  • Improper "robo-call" sales calls, including automated calls to cell phone numbers.

This is a big and persistent problem. I wrote last May about the Federal Trade Commission's efforts to crack down on several of these companies, including U.S. Fidelis (a.k.a. "USfidelis," "National Automotive Warranty Services Inc.," and "Dealer Services"), and the telemarketing evil geniuses that routed calls to them - hundreds of millions of calls, without restraint, to consumers, businesses, and government agencies, even to 911 emergency call centers. You can find one of my stories - about the cat-and-mouse game going after them - here. The FTC said then that U.S. Fidelis was cooperating with its inquiry.

One sleazy tactic in common use was an electronic trick called "spoofing" that displayed fake numbers on caller-ID systems. A single bogus number was used so often that it was listed in more than 11,000 complaints to the FTC - the proverbial tip of the iceberg, since most consumers just hang up and mutter or curse.

One of the telemarketers targeted by the FTC had a signs on its wall with the motto, "Hang Up. Next," which an agency lawyer said "epitomizes the utter contempt that defendants and their clients have for consumers' privacy and the law."

There's a lot to clean up here. Stay tuned, and I'll try to keep you posted.

Inquirer Business Columnist
0 comments
We encourage respectful comments but reserve the right to delete anything that doesn't contribute to an engaging dialogue.
Help us moderate this thread by flagging comments that violate our guidelines.

Comment policy:

Philly.com comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the "Report Abuse" option.

Please note that comments are monitored by Philly.com staff. We reserve the right at all times to remove any information or materials that are unlawful, threatening, abusive, libelous, defamatory, obscene, vulgar, pornographic, profane, indecent or otherwise objectionable. Personal attacks, especially on other participants, are not permitted. We reserve the right to permanently block any user who violates these terms and conditions.

Additionally comments that are long, have multiple paragraph breaks, include code, or include hyperlinks may not be posted.

Read 0 comments
 
comments powered by Disqus
About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

Jeff Gelles Inquirer Business Columnist
Also on Philly.com:
letter icon Newsletter