Scamming 'Your Warranty Will Expire' Calls Lead to Lawsuits

May 11, 2009— -- Telemarketers who push shady automobile-service contracts with pestering recorded phone messages angered the wrong guy when they twice called the Indiana attorney general on his cell phone.

"By the time you start calling on the state's attorney general," Attorney General Greg Zoeller told reporters last week, "you've blasted out one too many."

LastTuesday, after receiving some 160 complaints from Indiana residents over several months, Zoeller announced a lawsuit against two companies and an individual that his office claims have blasted unsolicited recorded messages hawking automobile warranties, credit card offers and loans. The calls, he says, violate the state's Do Not Call laws and statutes that prohibit sales calls in the form of automated messages.

These so-called robocalls are not limited to Indiana. Across the country, people are complaining to state authorities, the Federal Trade Commission, which oversees the national Do Not Call registry, and the Better Business Bureau. Attorneys general in at least 30 states are investigating the calls.

On Sunday, Sen. Charles Schumer of New York said he wanted a federal investigation into the "robo-dialer harassment."

"Not only are these calls a nuisance, but they tie up land lines and can eat up a user's cell phone minutes, possibly leading to a higher cell phone bill due to overage charges," said Schumer, a Democrat.

"Thousands of people have called to complain, and more than 100,000 people have contacted the Better Business Bureau to find out if these calls are legitimate," said Alison Southwick, a spokeswoman for the bureau.

The calls, recipients say, are a nuisance. Hundreds of thousands of Americans are estimated to have received the calls, most of which offer car-service contracts by deceptively telling recipients that the warranty on their car is about to expire.

(To listen to samples of recorded calls click HERE and HERE.)

So ubiquitous are the calls that a Congressional sub-committee meeting on health care was interrupted in March with this message, overheard on a member's cell phone speaker: "This is the second notice that the factory warranty on your vehicle may have expired..."

But beyond just being annoying, the calls are sometimes a full-fledged scam. The companies often pose as car manufacturers and convince consumers to buy service contracts with so many loopholes that they are left in the lurch when their cars do break down, Southwick said.