Least Surprising News Ever?: CarShield fined $10 million for deceptive advertising charges

CarShield fined $10 million for deceptive advertising charges

CarShield will pay $10 million to settle charges that its advertisements and telemarketing for its extended auto warranty plans are deceptive and misleading, the Federal Trade Commission said.

Many customers found that repair claims were often not covered despite making payments of up to $120 per month, the FTC said Wednesday. The FTC also alleged that CarShield's celebrity and consumer endorsers made false statements in its ads, such as "you'll never pay for expensive car repairs again."

The FTC complaint states that CarShield advertises and sells vehicle service contracts in a monthly price range of about $80 to $120. Its ads have featured celebrities including sports commentator Chris Brown and actor and rapper Ice-T.

The complaint alleges many CarShield ads claim that all repairs or repairs to "covered" systems, such as the engine and transmission, will be covered and they use language that make consumers believe CarShield will pay for all necessary repairs.

But the FTC claims that consumers often didn't receive the services they thought were covered under their payments, such as using the repair facility of their choice. Many consumers also found that repairs they thought were covered were not.

"Instead of delivering the 'peace of mind' promised by its advertisements, CarShield left many consumers with a financial headache," Samuel Levine, director of the FTC's Bureau of Consumer Protection, said in a prepared statement. "Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers' financial anxieties.".....

https://www.cbsnews.com/news/carshield-settlement-deceptive-advertising-ftc/

And how much did they make by making those claims?  Sounds like 10 mil was just "the cost of doing business..."

I've wanted to try and deceive them.

What a shocker........who could have imagined that?

Who does that? Carshield does that!

I don't see how this could be true, I mean... Ice-T has an unimpeachable credibility factor, no?

And wasn't there a TV car show bimbo, errrr..... um rather car show presenter/host that was hawking it too?

bludroptop said:

I don't see how this could be true, I mean... Ice-T has an unimpeachable credibility factor, no?

And wasn't there a TV car show bimbo, errrr..... um rather car show presenter/host that was hawking it too?

 

i'm ashamed that I know this, but I think that is Courtney Hansen and thats actually Endurance which makes them totally legit...

Only $10 million?

Like that will stop them from business as usual.

Yeah $10M will hardly slow them down, at this rate they're set to be the LifeLock of the automotive world.

"... using trusted personalities..." Yes, I would totally trust all automotive warranty advice that I get from rap stars and sports commentators. They're subject matter experts - maybe not anything they know about, but whatever.

WonkoTheSane said:

And how much did they make by making those claims?  Sounds like 10 mil was just "the cost of doing business..."

According to RocketReach, CarShield had $203.9 million in revenue. 

David S. Wallens said:

WonkoTheSane said:

And how much did they make by making those claims?  Sounds like 10 mil was just "the cost of doing business..."

According to RocketReach, CarShield had $203.9 million in revenue. 

But they paid out $846 in claims!

camopaint0707 said:

I've wanted to try and deceive them.

I stopped getting "We've been trying to reach you about your car's extended warranty" calls shortly after the time I asked for a quote for my 1966 Dodge Dart. And asked them if they would cover repairs when I'm rebuilding the engine myself. With a non factory turbo. Turns out they do have to draw the line somewhere.

MadScientistMatt said:

I stopped getting "We've been trying to reach you about your car's extended warranty" calls shortly after the time I asked for a quote for my 1966 Dodge Dart. And asked them if they would cover repairs when I'm rebuilding the engine myself. With a non factory turbo. Turns out they do have to draw the line somewhere.

Oh, I can get them to hang up on me... but it hasn't stopped the calls.

bludroptop said:

I don't see how this could be true, I mean... Ice-T has an unimpeachable credibility factor, no?

And wasn't there a TV car show bimbo, errrr..... um rather car show presenter/host that was hawking it too?

 

what makes her a bimbo?  and not you?

In reply to Streetwiseguy :

That’s nearly $900!

(Okay, technically closer to $800 than $900 but I was wearing my marketing hat for a min.)

I hear similar issues regarding pet care insurance - fast to take the money, like pulling teeth to get a payout.

David S. Wallens said:

WonkoTheSane said:

And how much did they make by making those claims?  Sounds like 10 mil was just "the cost of doing business..."

According to RocketReach, CarShield had $203.9 million in revenue. 

Seems like easy math to me.  Pocket 193+ million, write off a 10 mil fine against income....