The Federal Trade Commission (FTC) is distributing more than $9.6 million in refunds to consumers who purchased vehicle service contracts from CarShield and American Auto Shield, LLC. The payments are part of a settlement reached in July 2024 after the FTC alleged that CarShield’s advertising and telemarketing practices misled customers.
According to the FTC, CarShield and its contract administrator, American Auto Shield, promoted vehicle service contracts with claims that all repairs or covered systems would be paid for under their plans. However, many customers found that numerous repairs were not included despite paying up to $120 per month. The complaint also stated that advertisements promised free rental cars during breakdowns and the ability to use any repair facility, which was not always honored.
As a result of the settlement, both companies are now prohibited from making deceptive or misleading statements when marketing their vehicle service contracts. They must also ensure any endorsements or testimonials are truthful and accurate.
Checks are being sent to 168,179 eligible consumers affected by these practices. Recipients have been advised to cash their checks within 90 days as specified on the payment. Those with questions can contact Analytics, the refund administrator, at 855-298-8877 or visit the FTC website for more information about the refund process. The FTC emphasized it does not require individuals to pay money or provide account details in order to receive a refund.
The FTC’s interactive dashboards offer detailed state-by-state data on refunds issued in its cases. In 2024 alone, actions by the agency resulted in over $339 million being returned to consumers nationwide.
"The Federal Trade Commission works to promote competition and protect and educate consumers. The FTC will never demand money, make threats, tell you to transfer money, or promise you a prize. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts," according to an official statement from the agency.
