Wednesday, March 16, 2011
Avoid Car Warranty Scams
While many legitimate and reliable car warranties are available online, there are also warranty scams in which low price warranties are offered to unwitting consumers who are actually paying for a useless or fraudulent warranty. Other scams include overpricing of warranties by affiliate and lead sites, and then there are car warranty sites which in reality are dreaded "phishing" sites that exist only to obtain private data that is then abused. Avoiding these scams, and finding the right online car warranty, is a matter of being alert and knowing how to recognize scams while dealing only with companies that have a proven track record in issuing car warranties.
Oftentimes, a new auto warranty company will suddenly spring up online, offering extremely low prices on a very small selection of auto warranties. This is an indication that the company is, at best, an affiliate or lead site which makes a commission only on those warranties, or, at worst, a scam site.
The scam sites offer warranty terms that seem too good to be true, and they are set up for instant payment. The warranty which you purchase from such sites is not of much value, as it is not backed by a legitimate and insured warranty provider. Usually, such warranties do not pay repair and body shops directly, but instead ask the warranty holder to pay, so that they can then escape having to reimburse you for the money you paid out. This is fraud, and almost no reliable car warranty issuer will ask you to pay for repairs - instead, they work with a network of auto repair services which accept their payments directly at no extra cost to you.
Worse yet are those online sites which contact you via E-mail, warning you that your warranty is about to expire. Chances are that not only is your warranty not expiring, but you have yet to purchase an extended warranty. The E-mail messages which they send contain links to phishing sites that do not offer any legitimate warranties whatsoever. Instead, they capture your personal data for use in subsequent scams, and they may even be able to access your secure accounts using the information that they request. Under no condition should you respond to E-mail offers for car warranties. No legitimate firm uses such methods, which are illegal under spam prevention laws.
Instead, insist on car warranties that are maintained by legitimate and known firms. These firms deposit your money into a claims reserve account, and carry re-insurance from A. M. Best A or higher rated firms to protect you in the event the warranty company fails or experiences difficulties. Such policies are well-advertised and often discussed on consumer ratings sites.