Beware of a vehicle service contract scam
Car warranties covered by the manufacturer or dealer don't last forever.
Vehicle service contracts are designed to protect car owners against unexpected or expensive repairs to their vehicle.
They are bought separately and meant to fill the gap and take over when an existing warranty expires.
Each vehicle contract is different, so it's important to read the contract clearly to see what is and isn't covered if the vehicle breaks down.
The Consumer Fraud Task Force is warning drivers to use caution when dealing with marketing companies that sell vehicle service contracts on behalf of other firms that administer the plans.
The Better Business Bureau has received more than 870 complaints in eastern Missouri and southern Illinois in the last 12 months over this issue.
To summarize, the complaints include direct mail ads that attempt to instill a false sense of urgency appearing to be from a car dealership or vehicle manufacturer telling them their warranty is going to expire.
Some of them never identify the soliciting company by name, and use high pressure sales tactics to get people to agree to an initial payment.
These fake companies seem to exhibit the inability to get repair costs paid even when the consumer strongly believes repairs were covered in the contract. Consumers cite difficulty canceling agreements or getting payment refunded.
Here are some tips to keep in mind when considering whether to buy an agreement:
-Find out if you're already insured by calling your car dealer
-Determine whether you actually need a service contract based on your needs
-Inspect any contract closely before signing
-Ask if you can receive a refund if you cancel.
-Contact BBB for a free business review.
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