Buyer Beware: Don’t Fall for Warranty Scams


Have you received a call from an unknown number reminding you that your car warranty will expire soon? If you received such a call, and ignored it, good for you. This is a cleverly devised scam designed to cheat you out of your hard-earned money.

The goal is to have you purchase an “extended warranty” – better known as a service contract – using aggressive sales tactics. A service contract is an agreement to perform or pay for vehicle repairs. These contracts may be scheduled any time and always cost extra. A warranty comes with a new car and is included in the original price, according to the Federal Trade Commission.

In order to get you to agree to the service contract, the unscrupulous caller will use phrases such as “motor vehicle notification” or “final warranty notice of interruption” to create a sense of urgency. The caller will also try to get you to give them your personal financial information – such as a bank account number or credit card number – and a down payment before you receive details about the service contract.

Victims of this scam found that once they’ve forfeited their payment information, the company is no longer in business with no additional information, and can’t complete the contract.

If you’ve received these call and aren’t sure if you’re being scammed, ask the caller if they can tell you what kind of car you own and what type of warranty coverage you have. You know you’re dealing with a fake if they can’t answer either of these questions.

Here are some additional tips from the FTC to protect you from extended warranty scams:

  • Check your owner’s manual and call your car dealer to request expiration terms of your warranty. Warranties usually will not be issued for two to six years or for a predetermined mileage.
  • Beware of fast talkers who pitch warranties. This is a forceful tactic used to intimidate you into making a decision on the spot. Most legit businesses won’t pressure you into a purchase, and will provide written information about the warranty before the purchase.
  • Never give out your banking information unless you know who you’re dealing with. Scam artists use this information during the unsolicited pitch to commit other fraud against you.
  • Be skeptical of any unsolicited sales calls if it’s a recorded message or if your phone number is on the National Do Not Call Registry. To report violators, visit or call 1-800-382-1222.

Victims of these extended warranty or service contract scams can file a complaint with the FTC.  You can visit or call 1-877-FTC-HELP.

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