The Federal Trade Commission announced that a settlement has been reached with CarShield following allegations of using deceptive and misleading advertising tactics to sell vehicle service contracts.
The FTC revealed that customers of these contracts were given false impressions about the coverage of certain repairs, only to later find out the repairs were not covered. The commission also mentioned that celebrity and consumer endorsers made misleading statements in CarShield’s advertisements. Celebrities like Chris Berman and Ice-T were named in the FTC report.
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, expressed disappointment, saying, “Instead of providing the promised ‘peace of mind,’ CarShield caused financial distress for many consumers by not delivering on its advertisements. By using trusted personalities to endorse their false promises, CarShield exploited consumers’ financial concerns. The FTC will take action against advertisers who deceive consumers with false claims.”
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Furthermore, the FTC highlighted that many of CarShield’s celebrity endorsers falsely claimed to be customers of the company when they were not. The commission also alleged that the consumers featured in the ads misled viewers about the savings achieved through the service.
CarShield offers various plans on its website that cover the costs of car repairs for mechanical parts. Despite having an A+ rating from the Better Business Bureau, customer reviews give CarShield a low rating of 1.6 out of 5. Scripps News reached out to CarShield for their response.
