The Federal Trade Commission is taking action against the operators of an 'Extended Vehicle Warranty' scam. Terms outlined in the proposed court order would ban them from the industry for life - prohibiting them from all extended warranty sales and from all outbound telemarking. The FTC's action is the a result of a lawsuit against three companies and their owners which were charged by the FTC with running the operation. The FTC says they scammed consumers out of millions of dollars.
You can read the FTC's press release below:
March 24, 2023 - As a result of a Federal Trade Commission lawsuit, the operators of a telemarketing scam that called hundreds of thousands of consumers nationwide to pitch them expensive “extended automobile warranties” will face a lifetime ban from the extended automobile warranty industry and from all outbound telemarketing.
Under the terms of proposed court orders, three companies and their owners that were charged by the FTC with running the operation that scammed consumers out of millions of dollars would be permanently banned from participating in the extended automobile warranty market, as well as from any further involvement in outbound telemarketing.
“AVP misled consumers about who they were and what they were selling and called a large number of consumers who were on the FTC’s Do Not Call List,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Today’s order banning five defendants from the industry and imposing a monetary judgment of $6.6 million continues the Commission’s aggressive crackdown on telemarketing fraud.”
The FTC first charged the owners and operators of American Vehicle Protection Corporation (AVP) with violating the FTC Act and the Telemarketing Sales Rule in February 2022. In its complaint, the FTC charged that AVP made unsolicited calls in which it claimed to be affiliated with vehicle makers, and deceptively claimed their products, which cost thousands of dollars, offered “bumper to bumper” protection.
American Vehicle Protection Corp.; CG3 Solutions, Inc.; and Tony Gonzalez Consulting Group, Inc., along with individual defendants, Tony Allen Gonzalez, and his brother, Charles Gonzalez, have agreed to the terms of the proposed court orders.
The orders also include a monetary judgment of $6.6 million, which is largely suspended based on their inability to pay. If the defendants are found to have lied to the FTC about the financial status, the full judgment would be immediately payable.
The FTC’s case against the remaining defendants in the case, Kole Consulting Group, Inc., and its owner and manager, Daniel Kole, will continue.
The Commission vote approving the stipulated final orders was 3-0-1, with Commissioner Christine S. Wilson not participating. The FTC filed the proposed order in the U.S. District Court for the Southern District of Florida.
NOTE: Stipulated final orders have the force of law when approved and signed by the District Court judge.
The staff attorneys on this matter are Harold Kirtz, Hans Clausen, and Chris Gleason of the FTC’s Southeast Region.
Source: FTC Press Release.
Graphic Credit: Scott Maxwell LuMaxArt/Shutterstock.com.