If you've ever gotten a robocall warning that your "vehicle warranty is about to expire," you've already met this industry. The FTC has been cracking down on it — and one recent case shows just how brazen these operations get.
The Scheme
The Federal Trade Commission took action against American Vehicle Protection Corp, a Florida-based company that ran a textbook extended warranty scam.
Here's how it worked:
- They cold-called consumers across the country, often targeting elderly people
- Callers falsely claimed to be affiliated with — or even calling on behalf of — the consumer's vehicle manufacturer
- They created urgency: "Your warranty is expiring, you need to act now"
- Contracts ran $2,800 to $3,400
- The warranties were loaded with hidden restrictions that made them nearly impossible to actually use
Total consumer losses: over $6 million.
The FTC didn't just fine the company. They issued lifetime bans — the operators involved are permanently barred from selling vehicle warranties or any kind of extended service plans.
"These companies prey on the fact that car repairs are expensive and people are scared of being caught without coverage. That fear is the product they're actually selling."
How to Spot This Scam
Extended warranty fraud follows a consistent playbook. Watch for:
Unsolicited contact. Your actual manufacturer or dealership won't call you out of the blue about a warranty. If you didn't ask for the call, that's your first red flag.
Manufacturer affiliation claims. Phrases like "we're calling from [your car brand]" or "this is an authorized notice" are common lies. Real manufacturer warranty extensions come through official channels.
High-pressure urgency. Legitimate coverage doesn't expire in 24 hours. Anyone pushing you to decide on the spot is manipulating you.
Vague coverage details. Ask exactly what's covered. If the salesperson can't give you a specific list, or says "almost everything," that's not a real answer.
What Legitimate Extended Warranties Look Like
They exist — but they come from your dealership directly, or from reputable third-party companies with real reviews and a track record. You should be able to:
- Get the full contract in writing before paying
- Have a mechanic review what's actually covered
- Cancel within a reasonable window for a refund
If any of those isn't true, walk away.
The FTC has an extended resource on vehicle warranty scams at ftc.gov. And if you're ever in doubt about a mechanic or repair shop you're considering — not just warranty sellers — EthicalMechanic.org can help you find someone you can actually trust.