The US regulators are taking steps to crack down on the “extended warranty” telemarketing scheme. They could ban the responsible parties from the vehicle warranty industry for life. Three companies, American Vehicle Protection Corporation (AVP), CG3 Solutions and Tony Gonzalez Consulting Group, were subject to proposed court orders that were issued on March 23rd. They and their owners will be permanently barred from the extended automobile warranty industry as well as all outbound telemarketing.
February 2022 saw the FTC accuse AVP of violating both the Telemarketing Sales Rule and the FTC Act. The FTC claimed that AVP falsely claimed it represented dealers and manufacturers and offered fraudulent “bumper to bumper” and “full-vehicle” coverage policies to customers at a cost of between $2,800 to $3,400. The FTC claims that AVP made hundreds of thousands of unanswered calls to American consumers, including those on the federal Do Not Call Registry. They also didn’t honor the 30-day cancellation or refund policy. These scams are alleged to have bilked US consumers of more than $6 million since 2018.
AVP uninvitedly called consumers on the FTC Do Not Call List, violating both the Telemarketing Sales Rule and the FTC Act.
In a press release, Samuel Levine, Director of the FTC Bureau of Consumer Protection stated that AVP had misled consumers about their identities and the products they were selling. Today’s order, which bans five defendants and imposes a $6.6 million monetary judgment on them, continues the Commission’s aggressive crackdown against telemarketing fraud.
The proposed court orders have been accepted by all three companies and individual defendants Tony Allen Gonzalez, his brother Charles Gonzalez, who both own or manage the companies. Due to the defendant’s inability pay, the $6.6 million monetary judgment is suspended. FTC has a case against Kole Consulting Group, its owner and manager Daniel Kole. This case will continue.
Sometimes it can feel impossible to avoid spam calls. However, a study by spam blocker app Robokiller shows that things are actually improving. Robocall reports have fallen from 1 billion to less than 7 million in the US in the last year. This is between June 2022 and September 2022. The Federal Communications Commission (FCC took action last year against another scam auto warranty robocall campaign. It imposed the largest ever fine (almost 3 million dollars) as part its ongoing efforts to stop annoying auto warranty spam phone calls. Similar actions were taken by the FCC to stop robotext spam. This action now significantly exceeds robocalls. The FCC also introduced new laws that require mobile service providers that they block automated text messages that are “highly probable to be illegal.”
In February 2022 , the FTC charged AVP’s owners and operators with violating the Telemarketing Sales Rule and the FTC Act. The FTC alleged that AVP called unsolicitedly and claimed it was affiliated with vehicle manufacturers. It also claimed its products, which were expensive, provided “bumper-to-bumper” protection.
American Vehicle Protection Corp., CG3 Solutions, Inc., and Tony Gonzalez Consulting Group.
Inc. and individual defendants, Tony Allen Gonzalez and Charles Gonzalez, both have agreed to terms of the proposed court order.
A $6.6 million monetary judgment is also included in the orders. This judgment is suspended due to their inability pay. The full judgment will be payable immediately if the FTC finds that the defendants have lied about their financial situation.
FTC will continue to pursue the case against Kole Consulting Group, Inc. and Daniel Kole, its owner and manager.
The vote of the Commission to approve the final orders was 3-0-1. Commissioner Christine S. Wilson did not participate. The FTC filed the proposal order in the U.S. District Court of the Southern District of Florida.
Hans Clausen, Harold Kirtz, and Chris Gleason, FTC Southeast Region, are the staff attorneys in this matter.
The Federal Trade Commission promotes competition and educates consumers. Consumer.ftc.gov provides information on consumer topics.
