By on June 16, 2009

Anecdotally, it seems like almost everyone has had one of the “your vehicle warranty is about to expire” robo-calls sometime in the last year or so. Hopefully a civil suit by the FTC will cut back on some of the annoyance. Fox News reports that the scheme, allegedly perpetrated by Christopher Cowart, James and Maureen Dunne, and Kamian Kohlfeld, netted $10 million in fraudulent income. The scheme reportedly violated the Federal Trade Commission Act by misrepresenting or omitting material facts in their sales pitches, and that they violated the Telemarketing Sales Rule by “flatly ignoring” rules that prerecorded calls disclose the identity of the seller “promptly, and in a clear and conspicuous manner.” Read the whole sordid story at Fox to hear how these charming characters are trying to pass blame off on each other. And remember, there’s a special place in hell for people like this.

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17 Comments on “Robo-Warranty Scheme Sued by FTC...”


  • avatar
    Bimmer

    My 14 y.o. cousin had several calls on her cell. from this warranty scheme and she not only does not own a car, she doesn’t even have a license!
    Lets hope FTC will serve this clowns right for fraud and bothering so many people!

  • avatar
    pariah

    Thank God! Or thank the FTC anyways. I used to get about half a dozen calls a week from these people, including when I didn’t own a car. A couple weeks ago I actually got a letter in the mail, too.

  • avatar
    50merc

    I was at a graveside memorial service. The cleric was offering a prayer when my cell phone rang. I hurriedly stepped away and fumbled for my phone to stop the ringing. Very few people have my cell number and the rare calls I get are almost always from my wife, who knew I shouldn’t be disturbed at the funeral. The call turned out to be from those warranty-extension jerks.

    I wish the FTC success in its efforts, but shouldn’t this sort of case be turned over to a prosecutor named Torquemada?

  • avatar
    ruckover

    I have a moral question.
    We all agree that these people suck.
    Yet, several of the B and B suggested dumping the Nissan with the oil burning issue–in other words, foisting the problem onto an unsuspecting buyer. I just want to know what people here think; is it morally acceptable to not disclose a problem to a potential buyer (and do we see a difference between a private buyer and a dealer)?

  • avatar

    I got one of these recorded “your vehicle warranty is about to expire” calls so I listened through the recording and pressed the button to talk to a real person. When he answered, I asked, “which of my vehicles are you calling about?” He kind of sputtered a bit, so I added, “I have four vehicles and I was wondering which warranty you were calling me about?”

    Finally he said “well, what’s the oldest vehicle you have?” I replied “I thought you knew, since you called me to tell me the warranty was expiring… unless, of course, this is just some kind of scam trying to sell me a useless warranty on my 10-year old car that you’ll never honor because the vehicle’s so old.”

    Dead silence. Click.

  • avatar
    KixStart

    Ed Niedermeyer,

    You don’t happen to have those folks’ home numbers, by any chance, do you?

    Frank Williams,

    I’ve had a few calls go like that. I just love it when they call you at home, go through the spiel and then, when asked a question they don’t like, swear at you and hang up.

  • avatar
    chuckR

    I just responded to a class action settlement against a company sending unauthorized faxes to businesses – Federal Schedules, Inc. The lead plaintiff’s lawyers mugged Federal’s insurer, State Farm, who counter-sued claiming their insurance didn’t provide coverage. It became a 3 way cat fight, but the upshot for me and the rest of the class is $150 to each for a class settlement.

    Probably doesn’t even cover the cost of supplies all the fax bombers have chewed up on my machine, but its a step in the right direction. And it only works if you can find the SOBs and they have other assets they’d like to protect.

  • avatar
    wsn

    ruckover :
    June 16th, 2009 at 3:05 pm

    I have a moral question.
    We all agree that these people suck.
    Yet, several of the B and B suggested dumping the Nissan with the oil burning issue–in other words, foisting the problem onto an unsuspecting buyer. I just want to know what people here think; is it morally acceptable to not disclose a problem to a potential buyer (and do we see a difference between a private buyer and a dealer)?

    ——————————————-

    I think it’s entirely OK not to disclose that.

    Of course the seller shouldn’t say something like “it will last forever”. But on the other hand, this is a used car with no warranty from the seller.

    There is mutual knowledge between the buyer and the seller that a used car is not as dependable and fault free as a new car. And the used car is priced accordingly.

    So, as long as you don’t pretend you are selling a new car and don’t promise anything, I think it’s morally acceptable not to disclose the problems.

    Anyone disagrees should have bought a new car. I agree with that and I still always buy new cars.

    More reliable cars generally have better resale value. Surprise?

  • avatar
    ajla

    @ruckover:

    If I had a vehicle that I thought had an imminent risk of catastrophic failure then I wouldn’t sell it to a private buyer without telling them about it upfront.

    If I had a car with some issues, but didn’t think it was going to be catastrophic, and the prospective buyer asked me anything like “Why are you selling it?” or “Have you had any engine/transmission/electrical trouble?”, I would disclose the problem. Otherwise I wouldn’t bring it up.

    I’m willing to trade anything into a dealer though. I’m already buying a car off them, so I don’t feel bad about sticking them with my potential problem.

  • avatar
    Lokkii

    Yet, several of the B and B suggested dumping the Nissan with the oil burning issue–in other words, foisting the problem onto an unsuspecting buyer. …is it morally acceptable to not disclose a problem to a potential buyer (and do we see a difference between a private buyer and a dealer)?

    Well, one big difference is that we would not be willfully and knowingly breaking any laws…. Another is that the warranty sales company promises a product that will not be provided and the price is not negotiable.

    In contrast, the car is proffered for sale and the price is negotiated based on the buyer’s determination of the vehicle’s value to him. The buyer has the ability to inspect any used vehicle before purchase….and make a counter offer. It’s customarily understood that used cars are for sale for a reason and that reason may include problems. This is often reflected in the resale price of different vehicles (Compare and contrast – the retained value as a percent of price as new after 5 years for a Toyota Avalon and a Land Rover.)

    This is nothing new. Generally, for the last 1000 or more years, our western culture has put an obligation on the buyer to determine the value of what he or she is purchasing The concept of ‘Caveat emptor’ didn’t start with sales of the Nissan Murano. Outright fraud and violation of existing law has generally not been accepted for the past 1000 years or so… so there does appear to be some culturally understood difference between the two behaviors.

    You’re trying to use moral relativism (Bush = Bin Laden). Ok, if you want to play that game:

    As the good Christian you obviously are, you’ll know that sins of omission are not as serious as sins of commission.

    Finally, do you still have a copy of the disclosure list you made when you traded in YOUR last car? It would certainly be an educational tool that we sinners could put to good use as an example of the rectitude we are so sadly lacking. Thank you.

  • avatar
    Bearadise

    [email protected]@”I’m willing to trade anything into a dealer though. I’m already buying a car off them, so I don’t feel bad about sticking them with my potential problem.”

    And to think some people believe it’s only the dealers who don’t deal honestly.

  • avatar
    Edward Niedermeyer

    KixStart: I would definitely have taken the “only one way to find out” approach to that moral dilemma. Luckily I didn’t have the opportunity to be tempted.

  • avatar
    ruckover

    Lokkii,
    I am not trying to equate the two; I really just wanted to know what “car guys” thought. I should not have yoked the two articles together as I did; it was a poor use of rhetoric.

    I have always purchased used cars: I have been satisfied because I have them checked out by mechanics since I always want some idea of what issues the car might have. And I have never been afraid to walk away from a sale. These are mass produced cars, and there will always be another one for sale that will be a better deal (I will never, unfortunately, be in the market for something as beautiful and rare as the Bentley featured on this site today).

    I agree that there is no reason to disclose everything that is an issue when selling a used car. Buyers come to the purchase with the knowledge that the car is not new, but I am not sure about the advice to fill the Murrano with heavy oil, get the engine warm, and get it to a dealer. That is why I asked about the difference between a private party sale and a dealer.

    While I did graduate from a Catholic university, I am, sorry to say, not a Christian. And no, I did not fill out a disclosure statement when I last sold a car, for my buyer was my sister and I told her what needed fixing.

    I truly hope that others were not offended by my question, and I hope that I do not come off as a moralizing boor.

  • avatar
    Jaywalker

    They had thousands of complaints. You’d think they could have been satisfied with “hundreds” and moved on these …people… sooner.

  • avatar
    LoserBoy

    Every time these people called me, I added their number to a “Telemarketer” entry in my contacts, just in case they used the same number twice. (They didn’t, that I recall.) I put all telemarketing numbers in there, but I tend not to have that problem since it’s a cell phone, and unless the law has changed recently, you aren’t allowed to solicit a cell number.

    Anyway, “Telemarketer” has nineteen phone numbers associated with it. At least fourteen of those are these guys.

  • avatar
    psarhjinian

    There’s a fascinating discussion on this over at Slashdot. It more or less boils down to the FTC dropping the ball badly on this scam and only taking action after the media dust-up.

    There were thousands, perhaps tens or hundreds of thousands of complaints across the US and Canada and the FTC more or less just sat on it’s hands. Heck, there were people in very senior positions in government who complained to the FTC. Again, nothing.

    Denying or severly limiting the ability of calling parties to mask or alter CID information would go a long way to fixing this, but the incumbent telcos are pretty complicit in this kind of stuff (it makes them money) and the regulators are gutless. That the American telecomm industry is a balkanized mess doesn’t help.

  • avatar
    puppyknuckles

    I just got something in the mail yesterday from a generic “Warranty Services” in Chicago. Somehow they knew that my factory warranty on my car just ran out last week and thought it would be nice to send me a threatening letter saying in no uncertain terms that if I intend to drive my car ever again I am obligated to call their number immediately. I thought it was funny and threw it in the trash. When they start calling my phone, though, it’s on. Screw these crooks.

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