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FTC bans scammy companies from ‘calling about your car’s extended warranty’

FTC bans scammy companies from ‘calling about your car’s extended warranty’


The FTC has proposed court orders that would permanently ban operators of a known scam from outbound telemarketing and offering extended warranty sales.

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Illustration of two smartphones sitting on a yellow background with red tape across them that reads “DANGER”
The proposed court order follows a lawsuit opened by the FTC last year that sought to charge operators of an “extended vehicle warranty” telemarketing scam.
Image: Amelia Holowaty Krales / The Verge

Regulators in the US are cracking down on operators of an “extended vehicle warranty” telemarketing scam with action that could see the responsible parties face a lifetime ban from the vehicle warranty industry. Under proposed court orders drawn up on March 23rd, three companies — American Vehicle Protection Corporation (AVP), CG3 Solutions, and Tony Gonzalez Consulting Group — and their owners would be permanently banned from both the extended automobile warranty industry and all outbound telemarketing.

In February 2022, the FTC charged AVP and the two affiliated companies with violating the FTC Act and the Telemarketing Sales Rule. In its complaint, the FTC alleged that AVP falsely claimed to represent dealers and manufacturers, offering fraudulent “bumper-to-bumper” and “full vehicle” coverage policies to customers for between $2,800 and $3,400. According to the FTC, AVP placed hundreds of thousands of unsolicited calls to American consumers (including individuals on the federal Do Not Call Registry) and didn’t honor its 30-day cancellation and refund policy. The complaint claims these scams have fleeced US consumers out of over $6 million since 2018.

AVP unsolicitedly contacted consumers on the FTC’s Do Not Call list, violating the FTC Act and the Telemarketing Sales Rule

“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 press release. “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.”

All three companies, along with individual defendants Tony Allen Gonzalez and his brother, Charles Gonzalez (who both own and / or manage the companies), have agreed to the terms of the proposed court orders. The monetary judgment of $6.6 million is largely suspended based on the defendant’s inability to pay. The FTC still has an ongoing case against another company involved in the lawsuit — Kole Consulting Group and its owner and manager, Daniel Kole — which will continue.

It can often feel impossible to completely avoid malicious spam calls, though a study from spam blocker app Robokiller indicates things are actually improving. Robocall reports have plummeted in recent years, falling from 1 billion to fewer than 7 million in the US between June and September 2022. Last year, the Federal Communications Commission (FCC) took action against another auto warranty scam robocall campaign, proposing its largest-ever fine (almost $300 million) as part of its ongoing steps to stop annoying auto warranty spam calls. The FCC has also taken similar action to prevent robotext spam, which now significantly outpaces robocalls, introducing new laws that require mobile service providers to block automated text messages that are “highly likely to be illegal.”

Correction: March 28th, 2:00PM ET: An earlier version of this article contained a typo that incorrectly listed the FCC’s largest proposed fine as $3 million instead of $300 million. We regret the error.