CarShield to pay $10M to settle deceptive advertising charges

abcnews.go.com:

The Federal Trade Commission says that CarShield will pay $10 million to settle charges that its advertisements and telemarketing for vehicle service contracts are deceptive and misleading

CarShield will pay $10 million to settle charges that its advertisements and telemarketing for its extended auto warranty plans are deceptive and misleading, the Federal Trade Commission said.

Many customers found that repair claims were often not covered despite making payments of up to $120 per month, the FTC said Wednesday. The FTC also alleged that CarShield’s celebrity and consumer endorsers made false statements in its ads.

The FTC complaint states that CarShield advertises and sells vehicle service contracts in a monthly price range of about $80 to $120. Its ads have featured celebrities including sports commentator Chris Brown and actor and rapper Ice-T.

The complaint alleges many CarShield ads claim that all repairs or repairs to “covered” systems, such as the engine and transmission, will be covered and they use language that make consumers believe CarShield will pay for all necessary repairs.

But the FTC alleged that consumers often didn't receive the services they thought were covered under their payments, such as using the repair facility of their choice. Many consumers also found that repairs they thought were covered were not.

“Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a prepared statement. “Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to