Ford Dealership Forced Warranty Scam

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Jul 26, 2019
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#1
Forced Warranty Scam
What would you do? Any advise is appreciated.

I bought a Ford Fusion from Ford Country in Henderson NV on Monday July 22, 2019. I specifically stated that I did not want any extras such as extended warranties added to my car. They secured my financing through Ford Motor Credit who was offering me a 0.9% interest rate. I had already been a Ford Motor Credit customer for the previous three years with on time payments the entire three years and was paying 1.9% on my current loan. When I sat down to sign the paperwork the finance agent Ryan went over everything except the extended warranty that they decided to add to my loan even though I had said no. The warranty cost me $2011.13, I did not go over the paperwork with a calculator at the time I signed, and I was not told about the add-on therefore I did not know it was added. Tuesday July 23 I was going over my documents and I noticed this add-on charge. I called my salesman Neal Bullock to ask what it was for. He claimed he did not know and said he’d get back to me. When I did not hear from him the next day Wednesday July 24, I called him again, he still did not know but quickly called me back to say that it was an extended warranty. I was not told the warranty was added to my loan and wasn’t even told what the warranty covers. Thursday July 24, I went to the dealership to pick up my green slip and to inquire about this warranty. I was referred to Scott Gilmore the finance manager as Ryan my original finance agent was not in. I explained my situation and displeasure with him as I specifically stated before signing, I did not want any extra add-ons. He told me that the warranty enabled them to secure me a better interest rate on my loan. If they didn’t tie this warranty into my loan my interest rate would have been 2.9% instead of the 0.9%, I ended up with. I thought this was strange but took him at his word. Later I decided to do a little research to see if this was accurate. I called my financial institution who gave me my loan Ford Motor Credit. They told me that what the dealership told me was untrue. They had approved me for 0.9% financing with or without the added warranty. At this point I am extremely angry with Ford Country. I called the sales manager Dan Mahoney to tell him what I had learned. He basically told me the same story about the interest rate, but this time raised it to 3.9%. he also added that I had credit issues and was a third-tier customer. I researched this as well and I am not a third-tier customer. So, he was now telling me that I had bad credit and because of the way they worked the numbers and added the warranty they got me a better deal. I knew my three credit scores before going into the dealership and I do not have bad credit. His only offer to rectify the situation was to rewrite the deal at 3.9% interest, WHAT????? Ford Motor Credit has been very apologetic for the dealership’s fraudulent claims. They let me know I can cancel the warranty and the $2011.13 will come off my principle but my payment will be the same. I originally stated I wanted my payments at $450 but because of this added warranty my payment is $497. I accepted because I thought this was truly the best that they could do but really, they just wanted to pad my loan with extras.
 

Neil Maley

Moderator
Staff Member
Advocate
Dec 27, 2014
19,399
17,897
113
New York
www.promalvacations.com
#2
This is a known scam:
https://www.carbuyingtips.com/top-10-scams/scam6.htm

Contact the Attorney General in your State and file a complaint. I would also use our company contacts and write to Ford Motors and let them know.

I would also send that link to the dealer and tell them you are filing a complaint with the State Attorney General because the practice is illegal.
 

weihlac

Verified Member
Jun 30, 2017
2,154
2,438
113
Maui Hawaii
#3
Here are the Ford contacts: https://www.elliott.org/company-contacts/ford/

You should write an essential bullet list email, leaving out the extraneous anger issues, not using the term scam and focus on exactly what happened and what you were told, and how it differed from what Ford Motor Credit told you.

Also, you should recognize that despite what was done, and the higher monthly payment, you will avoid ~5 payments at the end of your loan as the principal will decrease.
 
Jul 26, 2019
19
15
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#4
This is a known scam:
https://www.carbuyingtips.com/top-10-scams/scam6.htm

Contact the Attorney General in your State and file a complaint. I would also use our company contacts and write to Ford Motors and let them know.

I would also send that link to the dealer and tell them you are filing a complaint with the State Attorney General because the practice is illegal.
Thanks for the advise this may be might next step.
 
Jul 26, 2019
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#5
Here are the Ford contacts: https://www.elliott.org/company-contacts/ford/

You should write an essential bullet list email, leaving out the extraneous anger issues, not using the term scam and focus on exactly what happened and what you were told, and how it differed from what Ford Motor Credit told you.

Also, you should recognize that despite what was done, and the higher monthly payment, you will avoid ~5 payments at the end of your loan as the principal will decrease.
Thank you, I have sent them an email with only the essential details.
 
Jul 26, 2019
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#9
I sent the manager at the dealership the link to where it says it is illegal. I knew it was a known scam when I spoke with him yesterday. He said he never heard of it, unbelievable.
 

AMA

Verified Member
Dec 11, 2014
1,174
1,495
113
#14
Car salesmen are really the scum of the earth. Very sorry this happened to you, and I hope your Attorney General goes after them and gets your money back. That is just blatant fraud.
 
Dec 19, 2014
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#15
This post really angers me, because the exact same thing just happened to my friend's father. He used a car buying service, and a final out the door price was negotiated prior to arriving at the dealership. It was made very clear that no warranties were needed. When my friend reviewed the paperwork after purchase, a $2500 extended warranty was added by the finance manager. In this specific situation, because a car buying service was used, a phone call to the car buying service resulted in the charges being reversed and the paperwork redone.

Sadly, this is an all too common practice at unethical dealerships, and it is not an isolated case. In addition to contacting the attorney general's office, I would also contact any local consumer advocacy (ie 8 on your side in Las Vegas).

As you already know, you are approved for the 0.9% financing with or without the warranty.
The dealer's defense will be "but you signed the paperwork" and sadly, that may hold legally.
If they are called out on it, they will say "oh, we made a mistake."
Please fight this, and let us know how it turns out.
 
Jul 26, 2019
19
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#18
This post really angers me, because the exact same thing just happened to my friend's father. He used a car buying service, and a final out the door price was negotiated prior to arriving at the dealership. It was made very clear that no warranties were needed. When my friend reviewed the paperwork after purchase, a $2500 extended warranty was added by the finance manager. In this specific situation, because a car buying service was used, a phone call to the car buying service resulted in the charges being reversed and the paperwork redone.

Sadly, this is an all too common practice at unethical dealerships, and it is not an isolated case. In addition to contacting the attorney general's office, I would also contact any local consumer advocacy (ie 8 on your side in Las Vegas).

As you already know, you are approved for the 0.9% financing with or without the warranty.
The dealer's defense will be "but you signed the paperwork" and sadly, that may hold legally.
If they are called out on it, they will say "oh, we made a mistake."
Please fight this, and let us know how it turns out.
Thanks for reading my long story. I will keep you guys updated. You’ve all been so helpful.
 
Dec 19, 2014
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#20
... Ford Motor Credit has been very apologetic for the dealership’s fraudulent claims. They let me know I can cancel the warranty and the $2011.13 will come off my principle but my payment will be the same. I originally stated I wanted my payments at $450 but because of this added warranty my payment is $497. I accepted because I thought this was truly the best that they could do but really, they just wanted to pad my loan with extras.
Although not ideal for you, this does seem to be the best solution.
As @weihlac mentioned earlier, since $2011.13 comes off principle, this will also reduce your interest (though at 0.9%, the interest accrual will be minimal), thus more of your payment will go towards principle, effectively saving you 5 payments at the end.
Ford Motor Credit isn't trying to "pad" your loan. They wrote your loan for a specific amount (based on the paperwork submitted by the dealer). They can't just lower the payment without re-writing the loan, thus, the monthly payment won't change.

Please, please, please get IN WRITING, documentation that your warranty has been canceled and the credit has been applied towards your principle!

As for the dealer, they need to be called out. At best, it was a misunderstanding *COUGH* yeah right, and that is what the dealer will probably respond with.