Aftermarket Warranty Company CarShield To Pay $10 Million To Settle Misleading Advertising Charges
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If aftermarket warranty company CarShield ripped you off, we have some good news: It just settled with the Federal Trade Commission over charges that its ads were misleading and that celebrity and consumer testimonials included false statements. The settlement will cost the company $10 million and will require it to make sure testimonials in future ads are truthful, ABC News reports.
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CarShield charged between $80 and $120 a month for its aftermarket warranties and made claims in its ads that either all repairs or all repairs to specific components such as the engine and transmission would be covered. The FTC argued that many customers later discovered that repairs they believed would be covered were not and that they weren’t allowed to choose their own service center.
In a statement, Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said, “Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache. Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers’ financial anxieties.”
The celebrities in question include rapper Ice-T, as well as sportscaster Chris Brown who should not be confused with Chris Brown the domestic abuser. According to CarShield, its ads now include more information about what is and isn’t covered and encourage potential customers to visit its website to read the full details of the plan they’re considering buying. The company also claims it’s only using spokespeople who are actual customers.
“While we disagree with many of the assertions from the FTC, we share their commitment to helping customers fully understand exactly what we provide and the value we offer,” CarShield said in a release. “That’s why we were glad to work alongside the agency to answer their questions and carefully examine ways to improve our communications with customers.”
