Car Warranty Scams 101
Chances are you’ve had a scammer contact you at one time or another. Whether it’s an email that congratulates you for winning a million dollars or a prince from a foreign country begging you for a short term loan, there are various scams that are designed to grab your attention–and your money. Car warranty scams are nothing new, but they are more rampant now than ever before. But learning how these scams work can help you protect yourself and your money.
Here’s everything you need to know about car warranty scams and how you can protect yourself.
What is a car warranty scam?
Car warranty scams are designed to pressure you into making a rash decision about purchasing a car warranty over the phone. The scammers usually pretend to be someone from either the dealership, manufacturer, or insurer, who tells you that your warranty has expired and you need to renew it. They will often pressure you by telling you how expensive repairs will be if you do not renew immediately. Scammers hope that you will feel enough pressure that you will give out your personal information so that they can “write a contract” and ultimately use that information to defraud you.
Scam callers often call you over the phone. They will have some of your vehicle information which may make them seem more legitimate or reputable. But they most likely know your name and vehicle information because they found it in public records or bought it from a data collection company.
Scammers may contact you in other ways, sometimes emailing, texting, or even sending you physical letters. But the end goal is always the same: to get your personal information.
How did a scam caller get your phone number?
Americans receive more than 50 billion robocalls every year, and that trend only seems to be increasing. You may wonder how they even got your number in the first place. There are many ways that scammers can get your personal information, both legitimate and illegitimate.
A very common legal way to obtain your information is by buying it directly from a state DMV. Many states participate in this and will sell driver's license numbers, vehicle information, and other personal information on your driver's license. Scammers can also purchase personal information from data collection companies. If you ever check “I agree” on a terms and conditions box for a contest or promotion, there is a good chance that they will sell your information to a third party.
But the most common way that scammers get your information is through data breaches. In 2022 there were reports of over 4100 publicly recorded data breaches. This resulted in about 22 billion records being exposed. While you can do your best to never give out your email, phone number, and personal information, there is little you can do to protect your information from a data breach. Some of the biggest and most secure companies in the world have breaches, and there’s little you can do to combat it.
How do you spot a scam number?
There are a number of warning signs you can look for if you are trying to determine if a call is a scam.
- They ask for personal information over the phone. If you receive a call that is asking for information such as your social security number, banking information, or credit card information, that is a major sign that it is a scam. You should never give this information out over the phone.
- The call is vague. Scam calls tend to use language that is very general and sweeping. They will have little to no information on the product or contract that they are trying to sell, and instead will push constantly to get your information.
- The call is very urgent. If the caller is trying to rush you and convey a sense of urgency, that’s a big sign that there is a problem. Again, they are trying to scare you into taking action so that you do not have time to think about it or be dissuaded.
- The caller is threatening. Sometimes scammers will use scare tactics to push you into giving information. They may tell you that they will take legal action or that you will have to pay fees if you do not extend your warranty. If this happens, hang up immediately.
What should I do to prevent scam calls?
If you are worried about scam calls (or have been a victim to one) there are ways to protect yourself and your information. One of the easiest ways to do this is to not pick up unknown numbers. If the phone call is legitimate, the caller will leave you a message. If not, they will move on to the next caller on their list.
You can also try installing a Robocall app that will detect and warn you if a scam is likely. Built-in features on iPhones and Androids are starting to label if something is likely spam, but another app may be necessary if you feel there are a lot of calls coming through.
You also want to avoid giving out your personal information as much as possible. Many companies lure you with coupons or incentives to sign you up on their email list, but try to resist the temptation. This is a very common way that people get your information.
Signing up for the do not call list is another step you can take to limit the amount you are contacted. The Do Not Call Registry is a free list designed by the Federal Trade Commission to reduce the number of telemarketing calls. Unfortunately scammers are not going to follow these guidelines, so you will need to take other measures as well.
What should you do if you get scammed?
If you fall victim to one of these scams, the best thing to do is report it to the FCC. On the consumer complaints page you can file a complaint. If you end up signing a contract you can contact the Better Business Bureau to report it.
In many cases there is no way to undo a scam. If they get your information you may be stuck with the financial repercussions. Contacting the credit bureaus to keep an eye on your credit is incredibly important. If any accounts are opened in your name be sure to report it immediately.
That’s how car warranty scams work and how you can protect yourself.
Warranties can save you a lot of headaches, but only when they are, well, real. If you refinance your loan with Auto Approve you can add on a Vehicle Protection Plan that will actually protect you. Contact Auto Approve today to find out more!