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Auto Warranty Scammers Hammered by FTC

Feds allege billions of robo-calls generated millions on phony auto warranty deals.

by on Jun.17, 2009

James Alan Dunne ran one of three companies targeted by the FTC for allegedly scamming consumers with robo-calls for auto warranties.  Dunne, a technical wizard, has been arrested numerous times and spent time in jail on at least two occasions.

James Alan Dunne ran one of three companies targeted by the FTC for allegedly scamming consumers with robo-calls for auto warranties. Dunne, a technical wizard, has been arrested numerous times and spent time in jail on at least two occasions.

By now, it’s likely become a familiar disruption.  The phone rings and an automated message advises you that your automobile’s warranty has expired and you need to act now to ensure you aren’t charged for future repairs.

If you were one of the countless, concerned car owners who responded by pressing, “1,” you were quickly connected to a warranty “specialist,” who, in classic, boiler-room fashion, aggressively encouraged you to extend your factory warranty for anywhere from $450 to as much as $3,000.  If you didn’t respond, you likely heard back several more times with the same urgent offer.

According to a civil lawsuit filed by the Federal Trade Commission, three separate scam artists Transcontinental Warranty, Voice Touch and Network Foundations, have so far placed more than a billion of these robo-calls, ignoring the national “Do Not Call” registry, while also dialing into cellphones – which are automatically barred to telemarketers and even 911 emergency lines.

The scams have netted at least $10 million, according to the government, for automotive warranties that consumers likely didn’t need and may not even exist.

In its complaint, the FTC says the companies “flatly ignored” the most basic tenets of the federal Telemarketing Sales Rule.  Among other things, marketers are required to honor the no-call list, and to “promptly, and in a clear and conspicuous manner,” disclose their identity when calling a consumer. (more…)