People say they have paid more than $1,000 for the coverage, only to learn it doesn't give them the protection they paid for.
The offers come in the mail and over the phone - an extended car warranty that promises to protect owners when their car breaks down.
"We thought buying this policy was basically an insurance policy, so if something would happen catastrophic we wouldn't have to worry about it," customer Nola Britton said.
Britton paid more than $1,000 for the extended warranty, only to be denied coverage when she needed it.
And she's not alone. ABC11 has investigated more than a dozen cases involving third party extended warranty companies that don't deliver.
Attorney General Roy Cooper is cracking down on the companies.
So far, three companies --US Fidelis, Credexx, and Now Automotive Protection-- are barred from doing business in North Carolina.
Any customer who has a contract with Automotive Protection can cancel it, and a judge ordered the company to pay $4.5 million, which will go to North Carolina public schools.
To make sure you don't have trouble with auto service contracts, don't fall for urgent calls or letters warning you that your car warranty is about to expire.
Get the service contract in your hands and read it before you sign or pay any money.
Also make sure any spoken promises are in writing, if the service contract doesn't say an item is covered, assume it's not.
Lastly, most extended service contracts have a deductible, meaning you'll pay for each repair. Read the contract so you know what you have to pay upfront.
As for Britton, one ABC11 got involved; her $3,100 repair got covered.
Meanwhile, the investigation by Cooper's office uncovered that companies often target senior citizens and people on the do not call list. Often times his office found the telemarketers are tricking consumers by pretending to represent car manufacturers and claiming to sell service contracts for bumper to bumper warranties.
The best advice, do not give your bank account or credit card information to any of these companies over the phone. Have them send you the contract in writing to see exactly what you're paying for, and even if you qualify for coverage.
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