Securing Our Communities: Car Warranty Scams

Each week, the NTIC Cyber Center highlights a different social engineering scam impacting individuals and communities within the National Capital Region. We encourage everyone to share this information with friends, colleagues, and loved ones to help reduce their risk of becoming a victim of financial fraud and identity theft.

Car warranty scams are profit-motivated social engineering schemes designed to trick unsuspecting car owners into purchasing an extended warranty or service contract for their vehicles. The companies behind these scams bombard vehicle owners with robocalls, emails, text messages, and physical mail such as postcards and official-looking notices that claim the vehicle’s warranty is about to expire. These messages and notices use language that creates a sense of urgency to encourage vehicle owners into purchasing the warranty and providing personal and financial information. They often use wording such as “limited time offer” or “this is the final call before we close out your file” to make victims believe they will miss an opportunity to get a good deal if they do not act quickly. Perpetrators of these scams also use other deceptive practices such as pretending to be representatives of a legitimate vehicle manufacturer or car dealer. Many include victims’ information such as the year, make, and model of their vehicles in their messages to add legitimacy to their scheme.

Consumers who are pressured into purchasing an extended warranty often learn that the actual coverage provided falls short of what was promised, leaving them on the hook for vehicle repair costs on top of the fees they already paid to the unscrupulous warranty vendor. If they try to cancel their purchase, they find that the process is either very difficult or impossible, and often never receive a refund. Unsuspecting victims can easily lose hundreds or thousands of dollars as well as risk identity theft if they provide warranty scammers with their Social Security number and financial account information.

The NTIC Cyber Center recommends reviewing the following tips to help prevent becoming victimized in an extended warranty or vehicle service contract scam:

  • If possible, avoid answering calls from numbers you do not know or recognize. If you do answer a call from a warranty scammer, end the call immediately and refrain from engaging with the caller.

  • Never respond to emails/text messages or return voicemails offering vehicle warranties or service contracts.

  • Never provide personal or sensitive information such as Social Security numbers or financial account information during an unsolicited call, no matter who the caller claims to be.

  • Check with your vehicle’s manufacturer or your dealership to find out if your vehicle is still under factory warranty. If your warranty has expired and you are looking to purchase an extended service contract, ask what options the manufacturer or dealership provides, if any. Most vehicles that have surpassed a specific mileage threshold or have reached a certain age are typically not eligible for warranty coverage from legitimate vendors. Most consumers will find that setting aside money in a “rainy day fund” for car repairs or the purchase of a new vehicle is a better option than potentially paying thousands of dollars for a warranty that does not provide full coverage.

Report car warranty scam attempts to the US Federal Trade Commission’s Consumer Complaint Center. If you believe you have been defrauded in a warranty scam, notify your local police department and the FBI’s Internet Crime Complaint Center (IC3).

The NTIC is governed by a privacy, civil rights, and civil liberties protection policy to promote conduct that complies with applicable federal, state, and local laws. The NTIC does not seek or retain any information about individuals or organizations solely on the basis of their religious, political or social views or activities; their participation in a particular noncriminal organization or lawful event; or their race, ethnicities, citizenships, places of origin, ages, disabilities, genders, or sexual orientations. No information is gathered or collected by the NTIC in violation of federal or state laws or regulations.