Top News

FTC Issues Refunds to Buyers of Bogus "Extended Auto Warranties'

July 27, 2016

By Gregory Arroyo

WASHINGTON, D.C. — The Federal Trade Commission (FTC)'s six-year effort to collect on a $4.2 million judgement against a telemarketer of “extended auto warranties” came to a end last week. According to the regulator's June 2010 complaint, the comapany duped victims into paying thousands of dollars for bogus plans by leading them to believe it was afilliated with auto dealers and manufacturers.

On July 19, the Federal Trade Commission began mailing 5,970 refund checks totaling more than $4 million to victims of the illegal robocaller. The checks are the result of a judgement against Fereidoun “Fred” Khalilian and his Miami-based company, The Dolce Worldwide LLC. The business operated under the name My Car Solutions.

“Khalilian is well known to the FTC as a result of a 2001 settlement that banned him from all travel-related telemarketing, and required him to pay $185,000 in consumer redress for making deceptive pitches for travel packages,” the FTC stated in a January 2011 release announcing its settlement with the robocaller. “In June 2010, the FTC filed a new complaint against Khalilian, alleging that since 2009, he and his company marketed ‘extended’ auto warranties by blasting consumers with pre-recorded robocalls.”

The calls, according to the FTC, warned people that their warranties were about to expire and instructed them to “press one” to talk with a representative. Consumers were then transferred to telemarketers who say they were from the “service contract department.” The telemarketers would then “verify” information about the consumers’ cars and “confirm” other information, including ZIP code.

The telemarketers then transferred consumers to a “senior specialist,” who allegedly made more misrepresentations. Only after consumers bought the warranties did they discover My Car Solution was not affiliated with their dealer or car manufacturer, and that the contracts did not cover “the entire engine,” did not provide “bumper-to-bumper” coverage, and excluded certain “pre-existing conditions.”

Consumers who tried to get their money back — typically between $1,300 and $2,485 per warranty — found it nearly impossible. And according to the FTC, no one received an actual warranty extension.

Filed in January 2011 in the U.S. District Court for the Southern District of Florida, the final court order settling the FTC’s charges banned the defendants from telemarketing or helping others telemarket. It also prohibited them from making any misrepresentations or omissions when selling any goods or services, and included the $4.2 million monetary judgment.

Additionally, Khalilian was required to turn over corporate and personal property totaling approximately $50,000. The court order also authorized the FTC to take action to collect the remainder of the outstanding judgment from the defendants.

Rust Consulting Inc. served as the refund administrators in the case. The checks must be cashed by victims within 60 days or they will become void.   

Comments

  1. 1. F&I Dude [ July 27, 2016 @ 12:53PM ]

    I used to get a ton of calls from these jokers and I'm glad to hear they got nailed. I'm shocked that so many people fell for this obvious scam. I'm also shocked that "Fred" did not go to jail.

 

Your Comment

Please note that comments may be moderated. 
Leave this field empty:
Your Name:  
Your Email:  

CLOSE [X]

READ NEXT

GM Financial Maintains ‘Credit and Pricing Discipline’ in Q2

Despite a competitive subprime auto finance environment, GM Financial continued gravitating toward a more prime-like credit profile during the second quarter.