According to the United States Federal Trade Commission NRRM, LLC, which does business as CarShield, along with American Auto Shield, LLC (AAS), the administrator of its vehicle service contracts (VSCs), will pay $10 million to settle Federal Trade Commission charges that its advertisements and telemarketing for VSC are deceptive and misleading, and that many purchasers found that many repairs were not “covered,” despite making payments of up to $120 per month. The FTC also alleges CarShield’s celebrity and consumer endorsers made false statements in its ads.
According to the FTC’s complaint, CarShield advertises and sells VSCs costing approximately $80 to $120 a month. CarShield’s ads for VSCs often feature celebrities such as sports commentator Chris Berman and actor Ice-T. These endorsers try to assure consumers that buying a CarShield service plan will provide them with “peace of mind” and “protection” from the cost and inconvenience of vehicle breakdowns, which will inevitably occur.
The complaint alleges many ads claim that all repairs or repairs to “covered” systems, such as the engine and transmission, will be covered and use language that makes consumers believe CarShield will pay for all necessary repairs. For example, one ad that ran 18,000 times on television stated, “With CarShield’s administrators, they make sure you don’t get stuck with expensive car repair bills like this.” It also touts CarShield VSCs as “your best line of defense against expensive breakdowns.”
The proposed order settling the complaint addresses the defendants’ alleged violations of the FTC Act. First, it prohibits CarShield from making the misrepresentations described in the complaint, along with any other misrepresentations related to any good or service. It also prohibits CarShield and AAS from failing to make required disclosures and from violating the FTC’s Telemarketing Sales Rule.
Next, the order bars CarShield from misrepresenting any endorser’s ownership, use of, or experience with any product or service and requires AAS to inform third-party marketers of the order and to review and monitor their advertising and marketing. The order also imposes standard reporting and compliance provision that will remain in place for up to 10 years.
Finally, the order imposes a $10 million monetary judgment against CarShield and AAS, which will be used to provide refunds to defrauded consumers. The full amount of the judgment must be paid to the FTC within seven days of when the court enters the order.
Washington & Washington represents people injured or who have passed away as a result of Car Accidents, Drunk Driving Accidents, Truck Accidents, Motorcycle Accidents, Pedestrian Accidents, Bicycle Accidents, Uber and Lyft Accidents, Tour Bus Accidents, Uninsured and Underinsured Drivers, Product Liability, Work Accidents, Production, Factory and Assembly Line Accidents, Meat and Poultry Plant Accidents, Slip, Trip and Fall Down Accidents, Building Construction Accidents, Boating Accidents, Hotel, Motel and residential pool drowning accidents, Medical Malpractice, Dog Bites, Sex Trafficking, Sexual Assaults, Cruise Ship Accidents, Nursing Home Neglect, Social Security Disability and Long Term Disability Claims, Personal Injury, in Pennsylvania, Florida, New Jersey, New York, D.C., and Minnesota.
Washington & Washington provides the highest standard of legal and ethical representation and makes sure people and their families have a fair chance to receive justice through the legal system – even when it means taking on the most powerful.
We provide free telephone consultations day, night and weekends. If we can be of service to you or anyone you know in any way, please do not hesitate to contact us 24 hours a day, 7 days a week at 215-925-4300, toll free at 1-800-988-0158 or schedule an interview online.