Scammers behind 'extended vehicle warranty' spam calls may face lifetime bans
FTC proposing court orders for scam that cost consumers over $6M
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The Federal Trade Commission (FTC) is taking action against the operators of an "extended vehicle warranty" scam that may lead to a lifetime ban from all outbound telemarketing and the extended automobile warranty industry.
A federal district court in Florida on Friday drew up proposed court orders to implement the ban following an FTC lawsuit against three companies and their owners implicated in the extended vehicle warranty telemarketing scam.
The scammers placed hundreds of thousands of unsolicited calls to American consumers – including many on the FTC’s Do Not Call List – and claimed to be affiliated with vehicle makers.
They also deceptively claimed that their extended vehicle warranty products, which cost thousands of dollars, offered "bumper to bumper" protection. Ultimately, they fleeced consumers out of millions of dollars while violating the FTC Act and the Telemarketing Sales Rule.
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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 companies – American Vehicle Protection Corp. (AVP), CG3 Solutions Inc. and Tony Gonzalez Consulting Group Inc. – plus Tony and Charles Gonzalez have agreed to the proposed orders, which include a monetary judgment of $6.6 million.
That amount is roughly equal to what the scammers bilked out of consumers since they launched the scam in 2018 until they first faced charges in February 2022.
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The proposed court orders from the FTC's lawsuit against those running the "extended vehicle warranty" scam could see the perpetrators banned from telemarketing. (William Thomas Cain / Getty Images / File / Getty Images)
"AVP misled consumers about who they were and what they were selling and called a large number of consumers who were on the FTC’s Do Not Call List," said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. "Today’s order banning five defendants from the industry and imposing a monetary judgment of $6.6 million continues the Commission’s aggressive crackdown on telemarketing fraud."
The FTC said the monetary judgment is largely suspended because of their inability to pay, but if the defendants are found to have lied to the agency about their financial status, the full judgment would be immediately payable.
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The FTC also has an ongoing case against a remaining defendant, Kole Consulting Group Inc., and its owner and manager, Daniel Kole.