Phone scam hits area

In the past year, Lake County residents have fallen prey to telephone scams involving extended automobile warranties. Local dealers are concerned that the problem may spread into 2009 and are mounting a community awareness campaign.

Mission Valley Auto dealer-owner Robin Ruebel said the scam companies get owner and vehicle information from courthouses, after  consumer purchases are registered  - which Montanans must do within 40 days of a vehicle’s acquisition.

Ruebel said she was targeted by a service contract warranty company when she received a warranty-expiration letter in the mail six months after she bought a truck. Her warranty on the truck had not expired and still had 2.5 years left, or 19,000 miles, she said.

“These are ‘fly by night’ insurance companies,” she said, adding that vehicle identification numbers - which are public records - contain dealer information. She said the companies contacting consumers, and making quick contracts, are misrepresenting themselves by implying they are in some way connected to her dealership.

“Our customers are very upset because they think we did it,” she said of the empty warranties. “People are assuming it is someone from here because they say ‘Since you got your vehicle from Mission Valley Auto.’ If I don’t sell it (the warranty) I don’t have to honor it.”

She said her dealership sells only two types of service contracts, which are honored everywhere. She said before her dealership sells a service contract, the vehicle is given a thorough inspection.

Ronan Dodge dealer-owner Jim Pierce said his dealership, along with all others, operates the same way. He said warranties are similar to medical insurance in the processes undergone before the plan is established.

“Anybody that sells a warranty that’s worth anything is going to inspect the car,” he said, adding that the used cars his lots sell are preinspected before they are put on the lot, and the inspections are honored by warranty companies. He said there are only a handful of “decent” standard warranty companies in the country.

Pierce echoed Ruebel’s statements about misrepresentation, and said he’s seen this type of automobile scam a couple times before.

“Most people don’t realize it’s a scam until they go to use it (the warranty),” he said, going on to describe the hard-to-place companies. “They’ll usually hit an area for a period of time then leave. It’s a big slow wave through the community.”

Montana assistant attorney general Jesse Laslovich said his office has reviewed phone calls, and prosecuted several companies, but said finding them is difficult.

“It’s the companies we can’t find that are the problem,” he said. “This is a slow investigation because there are so many companies out there.”

Don Aadsen Ford dealer-owner Gordon Henricksen said his son was recently called by a company who misrepresented themselves as being connected to his dealership. He said his son was asked to purchase a shady extended warranty, and said that when he declined the offer he was told never to come back to Don Aadsen Ford again. He said he has also heard other complaints from customers of rude phone calls by the solicitors.

Senior citizen Pat Cousins purchased a vehicle from Don Aadsen Ford and said the company misrepresented themselves.

“They said ‘This is Ford Motor Company,’ and came on very abruptly and said, ‘I need your VIN, make and model’,” she said. When she questioned why he didn’t already have the information, she said the caller swore at her and demanded she give him the information.

“I just don’t give out my numbers,” she said. “I felt like they should have all that information there since they’re the ones who called me.”

Charlo resident Dick Hook also purchased a vehicle from one of the local dealers and said he has received the same type of calls over the last few months.

“I got to the point where I needed entertainment so I just baited them along,” he said. “I told them I thought it was just plum stupid because I already had a warranty. And usually when I asked for a number to call them back at they’d hang up.”

Hook said some of the solicitors are also misrepresenting themselves.

“That one guy said they’re endorsed by Ford,” he said. “You’d be amazed at how many people throw the receiver down when I asked for their name.”

Hook said he doesn’t buy anything over the phone, and said he doesn’t support a “no call list.”

“I don’t believe in the ‘no call list’ because I don’t want my name on another government list,” he said.

Pierce said buyers should be wary to purchase anything from such companies over the phone.

“If you can’t put your hand on it and look them in the eyeballs, you probably shouldn’t do it,” he said of telephone extended-warranty purchases. “Like any type of policy: It’s only as good as the people who stand behind the policy. You get what you pay for quite frankly.”

Laslovich said auto owners should be proactive and conduct analyses of warranty companies before any purchase is made.

“People should do their own research and they should call them,” he said. “Don’t wait to be called or you’ll be sold a scam.”

Ruebel, Pierce and Henricksen said they are more than happy to consult customers who receive such calls or mailings, and give clarification and counsel.

Laslovich said extended warranty scams are among his office’s chief concerns, and bringing justice to those involved his highest priority.

He said Montana is part of a multi-state investigation involving non-manufacturer extended warranty hoaxes. He said within the past few months, various states have pooled their resources to stop such fraudulent contracts and phone calls.

“Our problem is trying to track down these agencies that are contracting outside the country,” he said of the companies that sell extended warranties on the phone, without an automobile inspection. He said the contracts they give are riddled with loopholes, making them useless.

“There are some companies that are legitimate, but not a lot,” he said. “The consumer should be very suspicious if a company’s willing to give a warranty over the phone.”

Laslovich said many of the companies are deceptive in their representation and make empty promises, adding that by doing this they are in violation of the Consumer Protection Act. He also said many of the companies investigated call car owners who are on the “do not call” list, and said this type of solicitation is also a violation of the Act.

“If any customer gets a phone call or something in the mail,” Ruebel said. “Please feel free to bring it in and I’ll look at it. I know Gordon and Jim would do the same.”

She said people should always ask for a company name, telephone number and address before ending such calls. She said the state auditors insurance division should also be contacted after such calls.