CarShield Settles Deceptive Advertising Charges with $10 Million Payment
CarShield Agrees to Pay $10 Million to FTC
- CarShield settles deceptive advertising charges with a $10 million payment to the FTC.
- The FTC accuses CarShield of using celebrity endorsements to deceive customers.
- CarShield will be under scrutiny for up to a decade to ensure compliance.
Aftermarket car warranty companies often face criticism, and CarShield is no exception. The company, one of the major players in the market, has agreed to pay $10 million to settle allegations of deceptive advertising. The Federal Trade Commission (FTC) claims that CarShield used celebrities to make false promises and failed to provide the coverage it had promised.
CarShield, which describes itself as “America’s Most Trusted Auto Protection Company,” is also the administrator of vehicle service contracts through a company called American Auto Shield, both of which are owned by NRRM, LLC.
Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated, “For many consumers, a personal vehicle is one of their most valuable assets and a vital lifeline for getting to work, taking their kids to school, and obtaining medical care. Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache.”
The FTC’s order prohibits CarShield from using deceptive advertising tactics in the future and requires the company to inform any third-party marketers it uses about these rules. The FTC will monitor CarShield for the next ten years to ensure compliance with these requirements.
Celebrities such as Ice-T, Vivica A. Fox, MLB pitcher Walker Buehler, NHL player Ryan O’Reilly, and Ric Flair have been involved in CarShield advertisements. The FTC’s ruling bans CarShield from using these celebrity endorsements in future campaigns.
CarShield must make the full $10 million payment within a week of the court entering the order. The FTC will use this money to provide refunds to affected customers.
