Attorneys general in Colorado and several other states are working in tandem to crack down on illegal telephone solicitors peddling automotive-warranty extensions, many of them fraudulent or pitched illegally.
The coordinated effort comes on the heels of a federal injunction against several firms accused of using automatic-telephone dialers to harass consumers with pitches for the warranties.
“We are certainly glad the federal government is taking this action on these cases,” said Mike Saccone, spokesman for Colorado Attorney General John Suthers. “They (phone solicitors) certainly don’t function in just one state. That’s why we’re working on a multi-state action in stopping these violations.”
A federal judge in Illinois granted the Federal Trade Commission an injunction against telemarketing company Voice Touch Inc. and several of its business partners for violating the federal Do Not Call Registry.
The companies operated a massive telemarketing scheme using random, prerecorded phone calls to dupe consumers into thinking their car warranty was expiring.
Despite the injunction, which extended to a Florida-based company that offered the warranties, Better Business Bureaus nationally are still logging consumer complaints, saying the calls have increased since financial troubles at Chrysler and General Motors were announced earlier this year.
“We expect to see a dramatic decrease in deceptive auto-warranty calls, but we are still on high alert,” FTC chairman Jon Leibowitz said following the injunction order.
Other states have filed suits, including Indiana and Missouri.
The spate of spam telephone calls pushing extended auto warranties peaked last year as federal rules loomed on curbing the meddlesome messages. Regulators said about the only thing that curbed their volume was the uncertain economy.
Nevertheless, thousands of consumers complained nationally about recorded messages on home or mobile phones for warranty extensions, some to people who told regulators they didn’t even own a vehicle.
There were 4,565 consumer complaints last year about auto-warranty solicitations and violations of Colorado’s No-Call List, Saccone said. So far this year there have been 1,797.
The companies dial every phone number within a particular area code and prefix sequentially, without regard to a consumer’s registration on a do-not-call list.
Caller IDs on consumer telephones display a phony number, an illegal practice known as “spoofing.”
“I’m not sure which is worse, the abusive telemarketing tactics of these companies, or the way they try to deceive people once they get them on the phone,” Leibowitz said.
The seller of the extended warranties allegedly took in more than $10 million in sales, the FTC said.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
