For some time, I've seen ads on TV for extended warranties on cars from companies like USfidelis . It looks like a good deal, especially for someone who has a car with 100,000 miles on it in this economy.
However, it turns out that many of these companies are engaging in disreputable tactics--including robocalling cell phones. Now Chuck Schumer wants something done (apologies for the link to Breitbart.com).
"Not only are these calls a nuisance, but they tie up land lines and can eat up a user's cell phone minutes, possibly leading to a higher cell phone bill due to overage charges," said Schumer, D-N.Y.
Meanwhile, officials in 40 states are investigating the companies behind the car-warranty calls.
Schumer also wants the FTC to work with state and local authorities to shut these companies down.
The St. Louis BBB is also on the case, since most of these extended-warranty companies are based in the St. Louis area.
Michelle Corey, president of the St. Louis BBB, says that these companies have been popping up like weeds in her metro area.
She said a group of companies began operating in Missouri in the mid-1990s that offered extended repair warranties to people whose manufacturer-issued warranties were about to expire. Within a few years, about 35 firms were offering similar services.
"It's a very lucrative industry," Corey said.
Corey also says that many of these companies send out cards that make people think their cars are on a recall list. Many of them don't let you see a contract until you agree to pay.
The story also reveals that USfidelis has been stonewalling Missouri officials about the nature of its business--to the point that state officials are taking the company to court. Small wonder that the company got an "F" from the BBB.
One step that we can probably take is to get networks such as truTV to yank their USfidelis ads. If this story is any indication, these guys don't deserve any legitimacy.