MONTGOMERY, AL (WSFA) - BMW of Montgomery sent an email to customers this week warning of "bogus and fraudulent warranty renewal notices." The email warned of phone calls, direct mail and emails to automobile owners claiming the warranty agreement for their vehicle was either nearing expiration or had already expired.
Tom Dart, president of the Automobile Dealers Association of Alabama, said scams like these are nothing new.
"People have been getting solicitations for service contracts for years," Dart said. "We don't know where they get these names and addresses. The State does not sell that registration information, and the manufacturers don't give it out. Somehow they're getting their hands on it, these companies are. Some are legitimate, and some are not legitimate. You have to be careful if you want to go down that road."
Dart said the biggest threat to consumers is that of spending money on a promised service, but having to spend more money on car repairs because the company they paid didn't follow through with the service.
"You pay this big premium for a service contract and the claims are never paid," Dart said. "I'm not saying it happens with all of these companies, but it can happen. You want to make sure the company has the financial ability to pay the claims."
Dart said the state passed the Alabama Service Contract Act in 1997. The law lays out the requirements for a company to offer extended service contracts.
The Alabama Department of Insurance also allows site visitors to search the name of a company that has sent a warranty offer to see if that company has met the requirements. Consumers can also reach out to the Better Business Bureau to see if there are any complaints about the company that has reached out to them.
Often times, a third-party vendor will send warranty offers that appear to be from a specific manufacturer or dealership. Dart said the best thing to do is to reach out to your local dealership. General Manager at BMW of Montgomery, Roger Harrison said dealers offer agreements through both third-party companies and their own manufacturers.
Harrison said he and his team frequently get calls from customers who have received these sorts of messages. He and Dart said your best bet is to ask questions.
"If you're being offered coverage for a price that seems too good to be true, there's a good chance there is," Harrison said. "Whether it's Audi, Chevrolet, doesn't matter, bring it in to the dealer and ask," Harrison said.
While Harrison said he knows many people will take an offer because it's less costly, he said many times these deals end up leaving the consumer spending more money than they would have had to for the initial repairs.
"If they're worth their salt, they're probably backed by ASE," Harrison said. "It's a reputable organization. If it's not ASE or manufacturer-backed, you should pull the layers back and do your research."
Both Harrison and Dart said it is best to read the fine print of any agreement and to reach out to your local automobile experts on what your options are.