Out-of-state companies selling expensive aftermarket automobile-repair warranties to Californians are using questionable sales tactics to separate consumers from their money. And there doesn't appear to be much consumers can do about it once they've purchased a service assure.
"As far as we know there is no regulatory agency covering extended vehicle warranties," said stamp Whitney president and CEO of the Stockton-based Midcal exceed Business Bureau.
"An informed consumer looking into these extended warranty companies would probably not buy the extended warranty," Whitney said explaining that the BBB does not make recommendations. "We try to provide information so consumers can alter an informed decision."
Before making a purchase decision. Whitney advised get a copy of the entire warranty and read it over carefully. "There are some flee clauses that allow the companies to get away without performing" what the consumer might expect he said.
One tactic the marketing companies use is to displace advertising postcards to consumers announcing "Urgent be: Expiring Auto Warranty." The consumer is asked to call a toll-free number and provide the Vehicle Identification be or VIN and the car's mileage.
The postcard lists a be of expensive repairs such as $3,000 for an engine or $2,000 for a transmission. Consumers are urged to act within 48 hours to receive a 20 percent discount off the be of the warranty.
Prices aren't listed but consumers who have complained about the companies undergo paid anywhere from $500 to $1,700 for warranty protection. A large be of questionable companies are based in eastern Missouri.
A recent statement from the St. Louis-based BBB "urges consumers to use extreme warn when dealing with independent companies offering extended go warranties."
In the past three years the consumer-protection agency has received more than 1,000 complaints and almost 34,000 inquiries about vehicle-warranty companies. Those complaints run the gamut from misleading advertising to failing to provide refunds poor customer function refusal to balance policies and failure to recognise the terms of the warranty.
One company in particular. Dealer Services of Wentzville. Mo. has received more than 241 complaints in the past three years and has an unsatisfactory record with the BBB.
No one at Dealer Services owned by National Auto Warranty Services Inc. was available for comment Thursday.
Another Missouri company. National Dealers Warranty of St. Peters has received more than 95 complaints in the past three years according to the BBB.
In California the Department of Insurance provides some oversight requiring the affiliate actually covering the warranty to register and meet certain financial requirements. None of the Missouri companies or other companies they represent were listed on the department's Web site as having registered and met those state requirements despite advertising and doing business in California.
"Before doing business with one of these companies we would encourage you to visit our Web place (www insurance ca gov) and verify that the affiliate is licensed," said Molly DeFrank with the California Department of Insurance.
"One thing consumers be to remember is if it seems too good to be true it probably is," said Emily Kampeter with the Missouri Department of Insurance which is in the process of investigating the vehicle-warranty industry in that state.
"If a company is going to furnish to replace something in your car and your car is going to be 10 years old chances are that company is not going to be able to hold its promises," she said.
Contact reporter Joe Goldeen at (209) 546-8278 or jgoldeen@recordnet com.
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