COLUMBIA - A new report released by the St. Louis Better Business Bureau (BBB) showed customer complaints are on the rise and there is growing mistrust surrounding vehicle service contracts.
In the past three years, the number of complaints filed in the St. Louis area has nearly tripled, going from 544 in 2018 to 1,402 in 2020, the highest since 2009.
Michelle Gleba, regional director of the Columbia BBB, said a big problem is that people confuse vehicle service contracts and warranties.
“A vehicle service contract can be added to a vehicle at any time, and it will always cost the consumer additional money," Gleba explained. "A warranty, however, comes with a new vehicle. And it's often an expense that's included in the purchase price.”
Companies will sometimes refer to these contracts as 'extended warranties,’ but they are not considered warranties under federal law.
The BBB expands on similar tactics that continue to evolve in an attempt to attract as many people as possible.
According to the BBB report, “Some in the industry utilize U.S. mail to send marketing materials to consumers informing them that their manufacturer’s service coverage is about to expire or use electronic media, television and radio ads that feature influencers who tout the product and its ease of use, to promote the service contracts.”
Gleba said people not understanding what they’re agreeing to is what these companies thrive off of.
“One of the top complaints that we see over and over again, is that people are telling us that they really feel that they were misled. So maybe it was a mailer, maybe it was a phone call, or maybe it was a commercial that they saw on TV, and misunderstood or did not fully understand what it is that they were saying," Gleba said.
One company that has been responsible for many of these complaints is CarShield.
From 2018 to 2020, over 60% of customer complaints directed to the St. Louis BBB were about CarShield.
CarShield is based in St. Charles, and claims to be “USA’s No. 1 Auto Protection Provider.”
KOMU 8 reached out to CarShield and has yet to hear back.
According to the BBB, it is imperative that you do not rush into any agreement before completely understanding it. Gleba recommends doing your own research and making sure the contract and company are right for you.
Gleba said the best thing a customer can do is to ask a lot of questions.
"Don't be shy, ask as many questions as possible, so that you fully understand what it is that you're getting for and ask for a copy of the contract before agreeing or signing anything," Gleba said.