CarShield to pay $10 million to resolve charges of deceptive advertising, states FTC

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, the stipulated order settling the Commission’s complaint also bars CarShield and AAS from making deceptive and misleading statements in the future and requires them to ensure their endorsers’ testimonials are truthful, accurate, and not deceptive.

“For many consumers, a personal vehicle is one of their most valuable assets and a vital lifeline for getting to work, taking their kids to school, and obtaining medical care. Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.  “Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers’ financial anxieties.”

In addition, the FTC stated that “while CarShield’s celebrity endorsers said they had signed up and used the company’s VSCs, in many cases this was not true. They were not “real” customers and had never saved money by using an AAS VSC. Finally, many CarShield ads deceptively feature consumer endorsers who claim to have saved a specific amount of money using their plans but have not in fact saved that amount.”

The FTC also stated that “CarShield featured endorsements by professional athletes, including basketball player Allen Iverson, pro wrestler Ric Flair, and baseball players Walker Buehler, Pete Alonso, and Matt Vierling. Other ads showcased sportscaster Chris Berman and actors Ice-T, Vivica A. Fox, Adrienne Janic, and Ernie Hudson – all of whom were represented to be “customers” or even “real CarShield Customers.””

More here.

IMAGE: Provided by FTC