FTC Refunds $449K to Victims of Extended Warranty Scam

The FTC is refunding $449,000 to victims of a telemarketing scam involving extended automobile warranties.

According to a Thursday (Oct. 10) news release from the Federal Trade Commission (FTC), the scam was carried out by a company known as American Vehicle Protection Corp.

The regulator said the scam involved calling hundreds of thousands of consumers nationwide to sell costly “extended automobile warranties” using deceptive telemarketing tactics.

“The FTC took action against American Vehicle Protection in 2022, charging that the operation made illegal sales calls in which it pretended to represent car dealers and manufacturers, and made false claims that its products offered ‘bumper to bumper protection,’” the release said.

According to the FTC, the company settled the charges by paying a monetary judgment, and by agreeing to get out of the outbound marketing and extended automobile warranty business.

American Vehicle Protection could not be reached for comment. The FTC said the refunds will be issued to 18,255 consumers.

Also this week, the FTC said it plans to require Marriott International and its subsidiary Starwood Hotels & Resorts Worldwide to launch a comprehensive security program after a series of data breaches between 2014 and 2020.

The commission alleges those breaches were the result of the companies’ failures to establish reasonable data security.

“Marriott’s poor security practices led to multiple breaches affecting hundreds of millions of customers,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a news release. “The FTC’s action today, in coordination with our state partners, will ensure that Marriott improves its data security practices in hotels around the globe.”

For its part, Marriott says it makes no admission of liability, and that many of the upgrades to its data privacy and information security programs are already in place or in progress.

In other recent FTC news, a judge this week unsealed a Sept. 30 ruling that the commission’s antitrust lawsuit against Amazon can proceed.

Amazon had asked U.S. District Judge John Chun to dismiss the case last year but Chun said it is too early in the case to consider Amazon’s claims.

The FTC alleges that Amazon used an algorithm that drove up the prices paid by U.S. households and engaged in anti-competitive practices. Amazon says it stopped using that algorithm in 2019 and the FTC has not shown it harmed customers.

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