Comparison Shopping Reveals Illegal Auto Warranty Tactics Which Harm Consumers
It's no secret that the vehicle service contract industry has had its share of controversy over the years. In spite of widespread crackdowns on illegal and unethical business practices, it is once again rearing its ugly head. In many cases, consumers are purchasing worthless contracts and find themselves unable to go after the companies who rob them of their money. After a months-long investigation, we are releasing the findings along with a corresponding infographic of questions consumers should ask before purchasing a contract.
While many states have taken significant action to eliminate the worst offenders, new companies are cropping up utilizing deceptive and in some cases, illegal practices. Unless a prospective new customer is given specific guidance, they are most likely not aware of underhanded tactics to look out for and as a result, often find out too late the policy they purchased isn't worth the paper it's printed on.
The most glaring offenders are companies which sell service contracts that are not backed by an
Some companies give the appearance of legitimacy by providing nothing more than "sample" contracts on their website. In other cases, insured plans are presented to prospective customers up front, then are switched to an uninsured contract upon signup. Unfortunately, an uninformed consumer is likely to make such a purchase – especially since uninsured contracts are generally sold at a much lower price.
Another problem is the aggressive sales tactics used by some companies to get customers to sign up. Price drops for immediate purchases seem to be the most common tactic. While not illegal, fabricating reasons for lowering the price simply to secure sales raises questions about a company's ethics and guiding principles. High pressure tactics often result in consumers making decisions they would not otherwise make if given the time and necessary information.
Customers are also being taken advantage of by some sales representatives who state that all repairs will be paid for - when in fact the contracts contain multiple exclusions, forcing consumers to pay for the majority of repairs themselves. It is vital that the policy holder read the contract and have a clear understanding of what is covered.
Because of a few unethical companies, reputable businesses within the industry have had to fight along with legislators to maintain the industry's integrity. Unchecked predatory selling practices make it harder for consumers to know who to trust when searching for a way to insure themselves against expensive vehicle repair bills.
The VPA (
Legitimate consumer protection agencies as well as local, state, and federal lawmakers must find a way to work with reputable businesses in the industry to prevent history from repeating itself.
Infographic: Five Questions Consumers Should Ask Before Buying An Extended Service Contract
Read the full story at http://www.prweb.com/releases/2016/09/prweb13693417.htm
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