Florida residents who used CarSheild may be able to get some of their money back due to false claims.
The company, known for offering extended auto warranty plans for vehicles in case of breakdowns or mechanical repairs, has agreed to pay $10 million to resolve allegations of deceptive advertising on radio and other media.
The suit brought by the Federal Trade Commission (FTC) alleged that CarShield’s ads were deceptive and misleading when they promised consumers, “You won’t get stuck with another high repair bill” and “You’ll never pay for expensive car repairs again.” The FTC says purchasers found that many repairs were not “covered” despite making payments of up to $120 per month.
Also, the FTC said CarSheild ads claimed that all repairs to “covered” systems, such as the engine and transmission, would be covered and used language that made consumers believe CarShield would pay for all necessary repairs. “With CarShield’s administrators, they make sure you don’t get stuck with expensive car repair bills like this,” said one of the ads.
The FTC says many consumers could not use the repair facility of their choice, as many do not accept the coverage. Plenty of consumers also find that repairs they thought were covered are not. Instead, the plans were loaded with a multitude of exclusions.
“Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
In addition to agreeing to pay the $10 million, CarShield agreed to stop making the misrepresentations described in the complaint. CarShield will also have to inform third-party marketers of the order and review and monitor their advertising and marketing. The order also imposes standard reporting and compliance provisions that will remain in place for up to 10 years.
The $10 million fine will be used to provide refunds to defrauded consumers.
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