FTC to take action against operators of extended vehicle warranty scam

The Federal Trade Commission FTC is taking action against the operators of an extended vehicle warranty scam that could lead to a lifetime ban on all outbound telemarketing and extended automobile warranty industry.

A federal district court in Florida on Friday drew up a proposed court order to implement the ban after an FTC lawsuit against three companies and their owners implicated in the extended vehicle warranty scam.

The scammers put hundreds of thousands of unintentional calls on American consumers, including many on the FTC's Do Not Call List, and claimed to be affiliated with vehicle makers.

They claimed that their extended vehicle warranty products, which cost thousands of dollars, offered bumper to bumper protection. They fleeced consumers out of millions of dollars while they were in violation of the FTC Act and the Telemarketing Sales Rule.

The proposed orders, which include a monetary judgment of $6.6 million, have been agreed by American Vehicle Protection Corp. AVP CG 3 Solutions Inc. and Tony Gonzalez Consulting Group Inc.

The scammers bilked out of consumers since they launched the scam in 2018 until they faced charges in February 2022, and that amount is roughly the same as the amount they paid in February of 2022.

Samuel Levine, director of the FTC's Bureau of Consumer Protection, said FTC CONSIDERING 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. The Commission has been aggressive in its crackdown on telemarketing fraud after today sanctioning five defendants from the industry and imposing a monetary judgment of $6.6 million. The FTC said the monetary judgment was largely suspended because of their inability to pay, but if the defendants lie to the agency about their financial status, the full judgment would be immediately payable.

The FTC also has an ongoing case against a remaining defendant, Kole Consulting Group Inc., and its owner and manager, Daniel Kole.