By Michelle Chapman, Business Writer
WASHINGTON (AP) --CarShield will pay $10 million to settle charges that its advertisements and telemarketing for its extended auto warranty plans are deceptive and misleading, the Federal Trade Commission said.
Many customers found that repair claims were often not covered despite making payments of up to $120 per month, the FTC said Wednesday. The FTC also alleged that CarShield’s celebrity and consumer endorsers made false statements in its ads.
The FTC complaint states that CarShield advertises and sells vehicle service contracts in a monthly price range of about $80 to $120. Its ads have featured celebrities including sports commentator Chris Brown and actor and rapper Ice-T.
The complaint alleges many CarShield ads claim that all repairs or repairs to “covered” systems, such as the engine and transmission, will be covered and they use language that make consumers believe CarShield will pay for all necessary repairs.
But the FTC alleged that consumers often didn’t receive the services they thought were covered under their payments, such as using the repair facility of their choice. Many consumers also found that repairs they thought were covered were not.
“Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a prepared statement. “Worse still, CarShield used trusted personalities to deliver its empty promises. The FTC will hold advertisers accountable for using false or deceptive claims to exploit consumers’ financial anxieties.”
NRRM LLC does business under the CarShield name. American Auto Shield LLC is the administrator of the vehicle service contracts.
The settlement prevents CarShield and American Auto Shield from making deceptive and misleading statements in the future and requires them to ensure the testimonials from representatives, including celebrities, are truthful and accurate.
The company did not immediately respond to request for comment from The Associated Press on Wednesday.
Harvey Weinstein hit with new sex crime charge in New York
Harvey Weinstein pleaded not guilty Wednesday to a new sex crime charge in New York, as he awaits retrial in his landmark #MeToo case.
Details of the new allegations were not immediately available. He was charged with committing a criminal sex act.
The jailed ex-movie mogul has long maintained that any sexual activity was consensual.
Prosecutors revealed last week that Weinstein had been indicted on additional sex crime charges that weren't part of the case that led to his now-overturned 2020 conviction. But the new indictment was sealed until his arraignment.
Prosecutors have said that the grand jury heard evidence of up to three alleged assaults — two in hotels in the Tribeca neighborhood and one at a lower Manhattan residential building. The purported incidents took place from the mid-2000s to 2016, prosecutors said.
But it's not clear whether any of those allegations underlie the new indictment.
While bracing for the new charges, Weinstein also is awaiting retrial after New York state's highest court this spring overturned his 2020 conviction on rape and sexual assault charges involving two women. The high court, called the Court of Appeals, ordered a new trial, which is tentatively scheduled to begin Nov. 12.
The Court of Appeals ruled that the then-trial judge unfairly allowed testimony against him based on allegations that were not part of the case. That judge's term expired in 2022, and he is no longer on the bench.
Prosecutors have said they'll seek to fold the new charges into the retrial, but Weinstein's lawyers say it should be a separate case.
Weinstein, who also was convicted in 2022 in a Los Angeles rape case, remains behind bars while awaiting his New York retrial.
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