FTC trying to shut down fake warranty companies

The Federal Trade Commission is attempting to shut down three companies that the agency alleges have bombarded millions of consumers since 2007 with deceptive "robocalls" to sell them phony extensions to their original vehicle warranties.

The FTC filed two lawsuits in federal courts Thursday against Florida-based Voice Touch Inc., Illinois-based Network Foundations LLC and Florida-based Transcontinental Warranty Inc.

Consumers who answered the pre-recorded calls hear a message telling them that their original vehicle warranty is about to expire and that they should "extend coverage before it is too late."

The companies then try to sell a false service contract for between $2,000 and $3,000, which is portrayed as an extension of the vehicle's original warranty.

The agency said in its lawsuits that the companies "deceptive practices" violated the FTC Act and the agency's Telemarketing Sales Rule by calling consumers whose numbers were on the national Do Not Call Registry.

The FTC has asked for temporary restraining orders to halt the illegal robocalls and said it will seek financial compensation from the companies that can be used to pay back victims of the scam.

A Network Foundations Inc. spokesperson, who did not want to be named, said the FTC's lawsuit against his company "is a misunderstanding."

"We are a hosting company. We have nothing to do with call centers and we are going to court today to state our case," the person said.

Voice Touch Inc. and Transcontinental Warranty Inc. could not be reached for comment.

Beginning Sept. 1, marketers won't be allowed to make robocalls to consumers unless they opt to receive these calls, said Kaplan.

"Obviously if you are already on the Do Not Call registry, you should not be getting robocalls from commercial marketers," he said.