FTC files suits to halt car warranty robocalls

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The Federal Trade Commission today filed suit in federal court in Illinois against companies it said were responsible for millions of deceptive phone calls offering extended vehicle warranties.


In two related complaints, the FTC said it took action against both the promoter of the warranties, as well as the telemarketing company it hired to carry out its deceptive campaign.


The FTC contends the companies are operating a “massive telemarketing scheme” using computerized phone calls to deceive consumers into thinking that their vehicle's warranty is about to expire.


“Consumers who respond to the robocalls are pressured to purchase extended service contracts for their vehicles, which the telemarketers falsely portray as an extension of the manufacturer's original warranty,” the FTC said in its statement.


“The FTC is seeking a temporary restraining order to put an immediate halt to these calls,” said chairman Jon Leibowitz, in a conference call with reporters.


Thousands of complaints have poured in to the Better Business Bureau and the FTC from consumers nationwide who have received calls to their cell or land lines, whether or not they owned a car, and even if they had already registered on the National Do Not Call Registry.


The complaint were filed in the US District Court for the Northern District of Illinois. The first names Daytona Beach, FL-based Voice Touch Inc. and two of its principals, James and Maureen Dunne. Also named is Network Foundations LLC, an Illinois-based company affiliated with Voice Touch; and Damian Kohlfeld, a company principal. A second complaint names Florida-based Transcontinental Warranty Inc., which sells extended auto warranties, and Christopher Cowart, its president and CEO.


The FTC claims the companies violated the FTC Act and the FTC's Telemarketing Sales Rule (TSR) either by calling people on the do not call list or those who had asked not to be called. The companies further violated the TSR by concealing their phone numbers from showing up on caller ID, also known as spoofing; failing to identify themselves in the calls; and failing to disclose the call was a sales pitch, according to the FTC.


Leibowitz said the companies behind the calls had gone to great lengths to hide their identities. The first priority was to “stop these abusive calls immediately,” which could number up to 1 billion, Liebowitz said, and then seek redress for consumers. The FTC will “look at the option of civil penalties down the road,” he said.


Calls to Cowart for comment were not returned, and numbers for Voice Touch or its principals could not be located.  


The FTC said it also had placed a button on its home page for people to file complaints.

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