CarShield has agreed to a $10 million settlement over allegations of deceptive advertising and telemarketing, according to the Federal Trade Commission. The FTC reported that customers often found their repair claims were not covered though they made monthly payments of $80 to $120. The agency also accused CarShield of using celebrities like Chris Brown and Ice-T to make false endorsements.
The FTC's complaint highlighted misleading ads claiming all repairs or "covered" system repairs such as engines and transmissions would be paid for. However, many consumers discovered that their expected services were not provided. The FTC criticized CarShield for failing to deliver the "peace of mind" promised in its advertising. Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated that CarShield's empty promises left many with a "financial headache," and that it used trusted personalities to exploit consumer anxieties.
The settlement forbids CarShield and American Auto Shield, the service contract administrator, from making future deceptive claims. They must ensure testimonials from representatives, including celebrities, are accurate. The company did not immediately respond to inquiries from The Associated Press on Wednesday. (This story was generated by Newser's AI chatbot. Source: the AP)
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