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FTC Sues 'Second Car Warranty' Robocallers

 & Chloe Albanesius Executive Editor, News

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The Federal Trade Commission on Thursday sued several companies that violated Do-Not-Call provisions by placing "robocalls" to consumers that offered bogus auto warranties.

Florida-based Voice Touch, Illinois-based Network Foundations, and Florida-based Transcontinental Warranty, Inc., along with several of their executives, were named in the complaints, which were filed Thursday in the U.S. District Court for the Northern District of Illinois.

"This is one of the most aggressive telemarketing schemes the FTC has ever encountered," said FTC Chairman Jon Leibowitz. "I'm not sure which is worse, the abusive telemarketing tactics of these companies, or the way they try to deceive people once they get them on the phone. Either way, we intend to shut them down."

The complaints accuse the companies of calling consumers – on landlines, cell phones, business lines, government offices, even at 911 call centers – and telling them that their car warranties were about to expire. Those who fell for it were often duped into handing over thousands of dollars to "renew" their plans.

The FTC alleges that the scammers took in more than $10 million.

The deceptive activity violates the FTC Act and calling people on the Do-Not-Call list violates the FTC's Telemarketing Sales Rule (TSR) the agency said. They further violated the TSR by calling consumers who previously had asked not to be called, concealing their phone numbers, and failing to identify themselves when calling.

The FTC is asking for a temporary restraining order to halt the activity as well as a freeze on all assets.

The FTC praised AT&T and Verizon Wireless for their cooperation in the investigation.

Last month, Verizon Wireless secured a $50,000 settlement from St. Louis-based National Auto Warranty Services and Florida-based Explicit Media for placing similar calls to its customers.

About Our Expert

Chloe Albanesius

Chloe Albanesius

Executive Editor, News

My Experience

I started out covering tech policy in DC for The National Journal, where my beat included state-level tech news and all the congressional hearings and FCC meetings I could handle. I later covered Wall Street trading tech before switching gears to consumer tech. I now lead PCMag's news coverage.

My Areas of Expertise

Getting my start in DC means I still have a soft spot for tech policy; Congressional hearings can sometimes be as entertaining as a Bravo reality show, for better or worse. But PCMag is all about the technology we use every day, as well as keeping an eye out for the trends that will shape the industry in the years ahead (or flop on arrival). I've covered the rise of social media, the iOS vs. Android wars, the cord-cutting revolution that's now left us with hefty streaming bills, and the effort to stuff artificial intelligence into every product you could imagine. This job has taken me to CES in Vegas (one too many times), IFA in Berlin, and MWC in Barcelona. I also drove a Tesla 1,000 miles out west as part of our Best Mobile Networks project. Of late, my focus is on our hard-working team of reporters at PCMag, guiding and editing their robust coverage.

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