Extended Warranty Scam Causes Dealer Blowback
We've reported that extended warranty scammers (boiler room operations taking thousands of dollars for zero actual coverage) have invaded the Internet and pissed all over the national "do not call" list (at 4am). According to Automotive News [AN, sub], the extended warranty grift is giving franchised dealers conniptions. "Paul Broome, a Cadillac dealer in Independence, Mo., hears from about 10 customers a month who complain about his dealership's high-pressure sales of service contracts. But Broome has nothing to do with the disputed contracts or their marketing. Instead, some peddlers of third-party contracts tap vehicle registration data to reach customers of dealerships such as Broome's by telephone, e-mail and direct mail." The AN article focuses on Missouri, whose Attorney General is pursuing the miscreants. But the scam is sweeping the nation. Still. Question: why haven't dealers and manufacturers sent a pro-active warning to their customers?
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A friend of mine has a 1999 Lexus LS that is just going off warranty. He got a call and offer to extend it, and he accepted. I told him about these scams, but he seems unconcerned. Time will tell.
It's only natural for dealerships to be outraged about con artists taking advantage of people who fear their car will need costly repairs. Peddling grossly overpriced service contracts is a major profit center for dealers.