What You Should Know about Forced Warranty Scam and Curbstoning

What You Should Know about Forced Warranty Scam and Curbstoning

Forced warranty dealer fraud occurs when a customer is told that he is not eligible for a loan until he pays for extended warranty. Finance officer can present various justifications why extended warranty is included with the vehicle. One of them is that a credit organization wants to be secured against problems that car damage may cause.

The salesperson may bring another excuse; as resources of used car is partially exhausted a financing company wants the customer to buy an extended warranty. It is done in order to be sure that in the case of car breakdown its owner will be able to pay for it. If a customer turns down the offer to buy extended warranty a salesperson can start persuading him to agree in exchange for getting a better interest rate or other benefits. Buying an extended warranty is optional. Financing organizations cannot require customers to buy it in order to qualify or the loan, so all the dealer’s tricks aimed at forcing the customer to buy it are illegal.


Auto dealers who pose as private car sellers are called curbstoners. Curbstoning is another car dealer fraud used to deceive consumers or to avoid the Federal Trade Commission rules regarding selling used vehicles. The dealers post ads in different sites (Craiglist, eBay etc.) and under the disguise of car owner sell wrecked, “salvage” or lemon vehicles.

According to Used Car Rule, dealers must disclose to customers full information about the car. But this rule is not applied to private sellers. That’s why it’s profitable for car dealers to sell their vehicles “as is” without disclosing important information about their past.

To be able to avoid being a victim of this car dealer fraud you should:

  • Avoid buying a car from a private seller. Better buy it from a well-known car dealership.
  • Take the car to your mechanic for an inspection. If the seller refuses to let you take the car, then he is hiding something.
  • Use CarFax or AutoCheck reports to track the car’s history.
  • Read all the documents thoroughly and have the copies of them all.
  • Never buy cars online.

Curbstoning is a scam rather difficult to detect and avoid. Always do your research before buying either a new or a used vehicle. But if you have been scammed by fraudulent car dealer contact  The Margarian Law Firm  to protect your rights.