CarShield Refund Checks Going Out — FTC Sends $9.6 Million to Consumers Who Were Denied Claims

In December 2025, the Federal Trade Commission mailed 168,179 refund checks totaling $9.6 million to consumers who paid for CarShield vehicle service contracts and had claims denied. Individual checks averaged about $57 — not life-changing, but symbolic of something larger.

CarShield, one of the most heavily advertised vehicle service contract companies in the country (you've heard the radio ads promising you'll "never pay for expensive car repairs again"), settled a $10 million FTC charge in 2024. The settlement led to these refund checks.

Here's what happened, what to do if you got a check, and what this case tells you about the extended warranty industry broadly.

What CarShield Was Charged With

The FTC's complaint against CarShield alleged deceptive advertising — specifically that CarShield:

• Advertised that customers would be protected from expensive car repairs, with slogans implying comprehensive coverage
• Failed to adequately disclose that the contracts contained significant exclusions that led to claim denials
• Used celebrity endorsers who claimed to have CarShield coverage without disclosing that they were paid
• Made it difficult for customers to understand what was and wasn't covered before purchasing

When customers filed claims, many found that the specific repair they needed fell under an exclusion they hadn't been clearly informed about. CarShield denied the claims. Customers were out both the repair cost and the monthly premiums they'd been paying.

The FTC called this deceptive under Section 5 of the FTC Act. CarShield settled for $10 million without admitting wrongdoing — a standard feature of FTC settlements.

How to Cash Your Check

If you received a refund check from the FTC's CarShield settlement:

1. Cash it promptly. FTC refund checks have expiration dates, typically 90 days from issuance. Don't set it aside and forget it.

2. Cash it at your bank or a check cashing service. The check will appear to come from the FTC's claims administrator. This is legitimate — do not be suspicious of a real check, but verify it came from Epiq (the FTC's refund administrator) if you're unsure.

3. Don't pay anyone to claim your refund. The FTC does not charge processing fees for refund checks. If anyone contacts you claiming you need to pay a fee to receive your refund, that's a scam.

4. Didn't get a check but think you should have? If you had a claim denied by CarShield during the relevant period and weren't contacted, visit ftc.gov/CarShield or call 1-833-399-3742 (the claims administrator's line) to inquire.

What This Tells You About Extended Warranties

CarShield is not an outlier. The vehicle service contract industry — which is distinct from manufacturer warranties and extended factory warranties — has a long history of FTC enforcement, state AG actions, and consumer complaints.

The fundamental problem is structural: a company that sells service contracts profits when it collects premiums and loses when it pays claims. That creates an incentive to advertise coverage broadly and find reasons to deny specific claims. The exclusions in a typical vehicle service contract are numerous, technical, and not prominently advertised.

Before purchasing any extended warranty or vehicle service contract:

Ask these questions:

• What specific repairs are excluded?
• What is the claims process and typical approval timeline?
• Are there mileage or age restrictions on when claims can be filed?
• Can I choose any repair shop, or am I restricted to a network?
• What happens if the company goes out of business? (Many VSC companies have folded, leaving customers with worthless contracts and no recourse)

Check these sources:

• State insurance regulators (VSCs are regulated as insurance in some states)
• Better Business Bureau — look at complaint patterns, not just the rating
• CFPB complaint database at consumerfinance.gov/data-research/consumer-complaints

Consider the math. For most vehicles, especially those with good reliability histories, extended warranties are not cost-effective. The premiums collected by VSC companies exceed the claims paid — that's how the business model works. You're paying for peace of mind, which has value, but be clear-eyed about what you're buying.

The CarShield case ended with a $10 million settlement and nearly $10 million in refund checks. For the 168,179 people who received checks, that's $57 back on a product that may have cost them hundreds of dollars annually. It's accountability, but it's not a full remedy.

For more on extended warranties and service contracts — and how to avoid getting burned — visit /avoiding-scams/.