FTC Issues Refunds to CarShield Customers Misled by Deceptive Warranty Claims | Carscoops

      Over 168,000 CarShield customers will soon receive checks following a settlement with the FTC regarding deceptive advertising allegations.

      Nationwide, drivers had been paying $120 monthly for coverage that frequently let them down.

      The settlement prohibits misleading ads and strengthens rules on endorsements.

      The last update on CarShield was in mid-2024 when it reached an agreement with the Federal Trade Commission (FTC) concerning deceptive advertising claims, resulting in a $10 million payment. Now, much of that money is being returned to consumers, with over 168,000 individuals set to receive payments.

      The settlement from July involved CarShield and its contract administrator, American Auto Shield, LLC. Regulators accused both companies of using misleading advertising and telemarketing tactics that implied customers would never face expensive repairs.

      In reality, many found that the coverage they were paying for—sometimes up to $120 per month—failed them when they truly needed it.

      A Policy That Didn’t Deliver

      According to the FTC, CarShield's advertisements asserted that all repairs, or at least repairs to "covered" systems, would be covered. Customers were also promised the freedom to choose any repair shop and receive a rental car at no charge if their vehicle broke down.

      However, many claims were often denied, and exclusions hidden in the fine print frequently left customers to cover the costs.

      “For many consumers, a personal vehicle is one of their most valuable assets and essential for commuting to work, transporting their children to school, and accessing medical care. Rather than providing the ‘peace of mind’ claimed in its advertisements, CarShield caused financial distress for many consumers,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.

      Increased Scrutiny for Future Advertising

      As part of the settlement, CarShield and American Auto Shield are banned from making any deceptive or misleading claims in the future. The agreement also mandates that all endorsements and testimonials in advertising must be truthful, accurate, and not misleading.

      The brand has traditionally featured celebrity endorsements in its advertisements, but these will now come under stricter examination.

      For the 168,179 customers impacted by this matter, checks are already being sent out. It’s important to note that these checks must be cashed within 90 days. The FTC also emphasized that it never asks individuals to pay money or provide account information to receive their refund.

      There may be concerns regarding potential scams linked to this refund. Consumers with questions about their payments should reach out to the refund administrator, Analytics, at 855-298-8877.