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Augusta, Maine -

Superintendent of Insurance Mila Kofman warned consumers to be wary of solicitations for extended automobile warranties being sold in Maine. Although extended warranty plans offered through an automobile manufacturer or dealer are often legitimate, consumers report a recent increase in sales efforts by companies that are not affiliated with the manufacturer or dealer from whom a consumer purchased a motor vehicle.

Superintendent Kofman said reported sales tactics include urgent phone calls claiming that a warranty is about to expire and postcards with urgent messages to call because a warranty is expiring. These sales tactics give the impression that the warranty offer is connected with the manufacturer or dealer when it often is not.

Red flags for consumers include:

• The solicitation asks for the consumer’s VIN number and make and model of the vehicle. Someone connected with the manufacturer or dealer should already have this information for the vehicle.

• The consumer is pressured to make a decision immediately and to give personally-identifying information, including credit card information or social security numbers, over the phone.

In Maine, any extended warranty plan that is not provided by either the dealer or the manufacturer of the vehicle is considered to be an insurance product. Accordingly, the company must be licensed as either an insurance agent or as an insurance company before it can legally sell the coverage, and the contract must have been filed with the Bureau of Insurance.

“Consumers can protect themselves by researching the company prior to making any purchase decision,” Kofman stated. “Information on whether a company or salesperson is licensed to sell insurance is Maine is available by contacting the Bureau of Insurance.”

Kofman urged caution and highlighted steps consumers should take:

• Beware of mailings or calls that appear to come from either your manufacturer or dealer offering extended warranty coverage. Make sure you know who you are dealing with.

• Never give out personal financial information, such as your bank account number, credit card number, or social security number, over the phone unless you are absolutely positive of the other party’s identity and certain that sharing the information is necessary.

• When considering an extended warranty, or any other telephone or mail solicitation, insist on getting complete terms and other information in writing before you agree to sign up or pay any money.

• Check out the business with the Bureau of Insurance, the Maine Attorney General’s Office or your local Better Business Bureau to determine if it is legitimate – before you buy.

• Check the status of any warranty you may have on your vehicle. If your warranty is still in effect or if it expired years ago, odds are good that you have received a random solicitation.

• Consumers are reminded that they can prevent many unwanted telephone solicitations by utilizing the National Do-Not-Call Registry. Consumers can register their phone number by calling 1-888-382-1222. They can also register their phone number at www.donotcall.gov.

Consumers who believe they have been victims of an automobile extended warranty scam may contact the Bureau of Insurance at 1-800-300-5000 or Insurance.PFR@maine.gov. Maine’s Bureau of Consumer Credit Protection is an additional resource for warranty issues and a wide range of other consumer credit questions or concerns. The agency can be reached at 1-800-332-8529 or www.Credit.Maine.gov.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound ethical business practices through high quality, impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its web site at www.maine.gov/insurance; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.

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Last Updated: October 28, 2009 1:30 PM