FTC hits warranty scammers with lifetime Bans

Extended Vehicle Warranty Scam Company Hit With $6.6M Judgement
AVP also faces a lifetime ban on outbound marketing and selling vehicle warranties.

We have all answered the phone and the voice of the other end says something like “We are calling about your vehicle’s warranty.” It can be one more annoying spam calls, especially when the companies mask their number to make it look like a call coming from your own area code. Thanks to the FTC, one of these companies is now essentially out of business and is on the hook for over $6 million.

According to the Federal Trade Commission, a company called Kole Consulting Group which ran America Vehicle Protection (AVP) scammed consumers out of millions of dollars in 2022 by selling what was claimed to be “bumper-to-bumper” coverage. The policy that cost thousands of dollars offered protection that was anything but.

Back in March, we relayed a report via The Verge, that AVP and other companies were in the FTC’s crosshairs for violating regulations. After an investigation, the FTC brought a lawsuit against Kole Consulting Group, the owner Daniel Kole along with other defendants that were running AVP. The result of the investigation and litigation resulted in a hefty judgment:

“Kole and AVP blasted consumers with illegal calls and made bogus claims about bumper-to-bumper warranties,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s order bans Kole and his company from the extended auto warranty industry and imposes a monetary judgment of $6.6 million, continuing the Commission’s aggressive crackdown on telemarketing fraud.”

However, don’t expect AVP to cough up that much cash anytime soon. The large judgment has been partially suspended based on the defendant’s inability to pay. I am just as shocked as you that a scam operation doesn’t have massive amounts of liquid assets at the ready to pay for its own transgressions. Mr. Kole will have to surrender $500,000, and if the FTC finds out that Kole or AVP lied about their inability to pay, the full judgment will be expected.

In addition to the monetary fine, AVP has agreed to lifetime bans from extended automobile warranty marketing and outbound telemarketing. Even though FTC is often playing scammer “whack a mole” where one gets taken out and others appear, it is good that at least one company has faced justice.

I used to get calls from companies like this all the time and I haven’t received one in a while. When they did call I would use a tip from Jalopnik alumn Jason Torchinsky, he would say he has either a really old or really expensive car. I would say my daily driver was a Bugatti Chiron, and they would immediately hang up.

Source:
https://jalopnik.com/extending-vehicle-warran ... lion-1850615498

Plenty more scams for them to run besides car warranties.  Too bad they don't get to pay up as that would put a serious crimp in their ability to set up a new scam shop.

It would be nice if they got their lawyers from one of those old Pre-Paid Legal Services scams that were so popular for a while. That would put them on the receiving end of the same sort of scam.

Shock is hardly my reaction when incurable frauds win a huge settlement discount from regulators. Career criminals aren't dumb enough to pile their money under the bed and wait for LEOs to find it. They might be dumb enough to spend it madly like trust fund babies. Once in a while these settlements get into asset seizure of large homes and luxury goods, but the take is never enough to meet the headlined penalty amounts.

Among several infuriating practices at AVP described in the February civil complaint, I see that they tricked customers into buying by leveraging facts about them, which I presume could be culled from muni tax records and data brokers. Phone jockeys would introduce themselves as "from (blank) Dealer Services", and transfer called parties to their "(blank) specialist", the blank filled with whatever make of car the mark happened to own.

The two Gonzalez brothers and co-owners had registered their sidecar "My Protection Plan" company in Florida, despite a prior order from "the Florida Office of Insurance Regulation to cease and desist from operating an illegal auto warranty business". Between the lines, I read that one of the bros did get one thing right, maintaining an internal no-call list. But 'keeping' and 'using' are two different verbs, as the complaint reveals that "Tony actively takes the files of Do-Not-Call consumers and dumps them back into the computer for AVP telemarketers to call again". (Here's another example of why "but we have a company policy" should never be a valid defense no matter what leniency a statute permits.)

American Vehicle Protection Corporation - FTC case landing page

I'd wanted to post the good news to the Forums last week but never got to it, so I'm glad someone took it up. However, my inner grade school grammar cop is not making sense of "It can be one more annoying spam calls" in the lead paragraph.