FTC Mailing Refund Checks to Consumers Tricked into Buying Bogus Extended Auto Warranties

The agency has secured about 6,000 checks totaling more than $4 million

FTC Mailing Refund Checks to Consumers Tricked into Buying Bogus Extended Auto Warranties
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July 19, 2016

If you've purchased a new car within the past few years, you've probably been received calls from telemarketers hocking an "extended auto warranty." Chances are, these solicitations are a sham.

Fortunately, the Federal Trade Commission (FTC) is taking steps to put an end to this con. The agency has announced that it is mailing nearly 6,000 refund checks totaling more than $4 million to people who were bombarded with illegal robocalls and tricked into paying thousands of dollars for the phony warranties.

The target of the FTC's effort was Fereidoun "Fred" Khalilian and his company, The Dolce Group Worldwide. According to a complaint filed in June 2010, the defendants, doing business under the name My Car Solutions, conned people by offering to sell them extended auto warranties after leading them to believe that the company was affiliated with auto dealers and manufacturers. These calls warned people that their car warranties were about to expire and connected them to talk with a representative. Consumers were then transferred to telemarketers who said they were from the "service contract department."

The telemarketers then transferred consumers to a "senior specialist" who allegedly made more misrepresentations. Only after consumers bought the warranties did they discover that My Car Solutions was not affiliated with their car manufacturer, and that the contracts did not cover "the entire engine," did not provide "bumper-to-bumper" coverage, and excluded certain "pre-existing conditions."

The sham service typically cost between $1,300 and $2,485.

In reality, no one received an actual warranty extension and people who tried to get their money back found it nearly impossible.

The final court order bans the defendants from telemarketing or helping others to telemarket, prohibits them from making any misrepresentations or omissions when selling any goods or services, and includes the $4.2 million monetary judgment.

Rust Consulting, the refund administration for this case, will begin mailing refund checks on July 19, 2016. The checks must be cashed within 60 days or they will become void. Customers with questions about the settlement should call (877) 703-3427.