James Alan Dunne ran one of three companies targeted by the FTC for allegedly scamming consumers with robo-calls for auto warranties. Dunne, a technical wizard, has been arrested numerous times and spent time in jail on at least two occasions.
By now, it’s likely become a familiar disruption. The phone rings and an automated message advises you that your automobile’s warranty has expired and you need to act now to ensure you aren’t charged for future repairs.
If you were one of the countless, concerned car owners who responded by pressing, “1,” you were quickly connected to a warranty “specialist,” who, in classic, boiler-room fashion, aggressively encouraged you to extend your factory warranty for anywhere from $450 to as much as $3,000. If you didn’t respond, you likely heard back several more times with the same urgent offer.
According to a civil lawsuit filed by the Federal Trade Commission, three separate scam artists Transcontinental Warranty, Voice Touch and Network Foundations, have so far placed more than a billion of these robo-calls, ignoring the national “Do Not Call” registry, while also dialing into cellphones – which are automatically barred to telemarketers and even 911 emergency lines.
The scams have netted at least $10 million, according to the government, for automotive warranties that consumers likely didn’t need and may not even exist.
In its complaint, the FTC says the companies “flatly ignored” the most basic tenets of the federal Telemarketing Sales Rule. Among other things, marketers are required to honor the no-call list, and to “promptly, and in a clear and conspicuous manner,” disclose their identity when calling a consumer.
In my own experience, I have so far received at least a half-dozen calls from the three firms, and, after connecting with a human operator, when I have tried to find out more about the companies behind the proffered warranties, I was immediately disconnected.
The federal suit names four defendants: Christopher Cowart, Damian Kohlfield and spouses James and Maureen Dunne. According to an investigation by Fox News, Kohlfield appears to be at the center of the scheme. The Arizona State University graduate is a technical wizard who came up with a way to “spoof” caller ID systems, among other tricks used in the alleged scam. Kohlfield served a short sentence, in 1993, for a robbery conviction.
But the network also found that Cowart has had numerous legal problems, over the years. He served six months in jail for making a false bomb report, in 1991, and a decade later was arrested on charges of indecent exposure – charges later dropped.
“We’ve admitted to doing nothing wrong as to how we sold it, nor will we ever,” he told Fox. “The fact is, 140 employees were put out of work and we hope to restart operations with the blessing of the FTC, as it were.”
It appears the three firms may have been connected to other shady vendors of auto warranties, including US Fidelis, which was sued by Missouri’s Attorney General, last year, for making allegedly misleading claims.
A federal court has issued an injunction freezing the assets of the three firms, and though the defendants all say they hope to resume their operations, the calls have stopped – at least for the moment.
As a consumer and as a long time member of the automotive industry, I hope they really thow the book at these people. The automobile industry itself has enough problems without adding a layer of really annoying people selling a useless product in a manner which is clearly in violation of the law.
I have received many phone calls from these people, and letters as well. Yet I have not been able to precipitate any action from any governmental agency. I guess their big mistake was dialing New York Senator Chuck Schummer’s phone number. At least he knew the right person to complain to.
These people are criminals. Lock them up and take away their money.
I agree! After retiring from over 25 years as the owner of an auto service business very few of the aftermarket warranty companies lived up to their promises to the consumer. They would use every conceivable excuse to weasle out of a claim.
It’s a shame they only got these folks for violating the Do Not Call Registry. They need to look a lot further into the aftermarket warranty industry.
Sales person embellishment runs rampant. The consumer is led to believe he has “bumper to bumper” coverage but in reality the coverage is usually limited to the drivetrain with many specific exclusions.
The smart consumer learns to ask to see in writing what’s NOT covered.
As you can see, you hit a nerve with this article.
Oh, Al, it hit one with me! I have been getting countless calls from these scammers, as noted in the piece, and have tried, repeatedly, to find out who they are, only to get hung up on. Meanwhile, I also learned, the hard way, about the limits of aftermarket warranties, with an Audi I owned, 20 years ago. The exception was what WAS covered, not what was excluded.
Paul A. Eisenstein
Bureau Chief, TheDetroitBureau.com