FTC hits 'extended vehicle warranty' scammers with lifetime telemarketing bans
FTC said 'extended vehicle warranty' telemarketing scam fleeced consumers out of $6.6 million
The Federal Trade Commission (FTC) announced that the operators of an "extended vehicle warranty" telemarketing scam that targeted hundreds of thousands of consumers will face lifetime bans from working in the industry.
The FTC initially charged Kole Consulting Group and its owner, Dan Kole, as some defendants involved with the American Vehicle Protection (AVP) operation in February 2022. The AVP telemarketing scam began in 2018 and fleeced consumers – including many on the FTC’s Do Not Call List – out of millions of dollars. The scam involved the use of unsolicited calls to consumers and making deceptive claims about AVP's affiliation with vehicle makers and offering "bumper-to-bumper" protection through warranties that cost thousands of dollars.
"Kole and AVP blasted consumers with illegal calls and made bogus claims about bumper-to-bumper warranties," Samuel Levine, director of the FTC’s consumer protection bureau, said in a statement. "Today’s order bans Kole and his company from the extended auto warranty industry and imposes a monetary judgment of $6.6 million, continuing the Commission’s aggressive crackdown on telemarketing fraud."
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The FTC announced that some of the defendants behind the "extended vehicle warranty" telemarketing scam will face lifetime bans from the auto warranty and telemarketing industries. (William Thomas Cain / Getty Images / File / Getty Images)
Under the FTC’s stipulated final order, which was approved unanimously by the FTC on a 3-0 vote and to which the agency stated the defendants have agreed, the defendants will be banned from working in the extended automobile warranty and telemarketing industries in the future.
It also imposed a monetary judgment of $6.5 million, which is partially suspended due to the inability of the defendants to pay. Kole will be required to surrender $500,000 under the order, and if the defendants are found to have lied to the FTC about their financial status, the full monetary judgment would be immediately payable.
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The Federal Trade Commission is cracking down on the scammers behind the "extended auto warranty" telemarketing scheme that fleeced consumers out of millions. (Ting Shen / Bloomberg via Getty Images / File / Getty Images)
The FTC’s stipulated final order will need to be approved and signed by a federal district court judge from the Southern District of Florida.
This spring, the FTC announced a settlement with AVP, CG3 Solutions Inc., Tony Gonzalez Consulting Group Inc., plus Tony and Charles Gonzalez for their roles in the extended vehicle warranty scam.
The Federal Trade Commission reached a settlement with other defendants in the case earlier this year. (Reuters / Yuri Gripas / File / Reuters Photos)
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That settlement featured a monetary judgment of $6.6 million – an amount roughly equal to what the scammers bilked out of consumers during their scam.