The operators of a telemarketing scam phoned hundreds of thousands of consumers nationwide pitching “extended automobile warranties” and an FTC lawsuit has resulted in them being banned from any further involvement with extended warranty sales.

The FTC first charged Kole Consulting Group and its owner, Daniel Kole, as some of the defendants running the American Vehicle Protection (AVP) operation that scammed consumers out of millions of dollars in February 2022. In its complaint, the FTC charged that AVP made unsolicited calls in which it claimed to be affiliated with vehicle makers and deceptively claimed its products, which cost thousands of dollars, offered “bumper to bumper” protection.

“Kole and AVP blasted consumers with illegal calls and made bogus claims about bumper-to-bumper warranties,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “Today’s order bans Kole and his company from the extended auto warranty industry and imposes a monetary judgment of $6.6 million, continuing the Commission’s aggressive crackdown on telemarketing fraud.”

The proposed court order, which the defendants have agreed to, includes the bans from extended automobile warranty marketing and outbound telemarketing. The order also includes a monetary judgment of $6.5 million, which is partially suspended based on the defendants’ inability to pay; Kole will be required to surrender $500,000. If the defendants are found to have lied to the FTC about the financial status, the full judgment would be immediately payable.

Amanda Root was sentenced in Ingham County Circuit Court to 42 months in prison on one count of embezzlement of $100,000 or more and two counts of filing false tax returns.

Additionally, her sentence includes restitution in the amount of $459,645.70 paid to the victim, the victim’s insurance companies, and the Michigan Department of Treasury. Root, 42, of St. Johns, pled guilty to the counts in April.

Root worked for Glenn Buege GMC Buick for many years and oversaw accounts receivable and accounts payable. The state believes she used her position to embezzle more than $420,000 in cash from the dealership between 2016 and 2019 to gamble. When the Glenn Buege location Amanda Root worked at was closing, she confessed the embezzlement to different people, admitting to taking at least $250,000 to cover gambling losses. Root failed to claim the additional income on her taxes. She had been charged with four counts of embezzlement and four counts of filing a false tax return.

“Family-owned businesses and other small or local interests can be irreparably devastated by embezzlement on this scale from their own trusted employees, and I am grateful to all three departments involved here for helping to secure justice in this significant theft,” Attorney General Dana Nessel said.

The Pennsylvania attorney general announced a $705,000 settlement with a Delaware-based title loan company that levied illegal interest rates. As a result of the recent settlement, Auto Equity Loans of DE, LLC will refund $705,000 in unlawful interest charges to consumers who fell victim to the scheme. In addition, the settlement requires AEL to cancel and stop accepting payments on all remaining car title loans to Pennsylvanians – worth more than $1 million in debt cancellation. AEL no longer operates as a car title loan business.

“Auto Equity Loans was a predatory lender preying on Pennsylvanians, thinking they could avoid Pennsylvania law because they were based in Delaware,” Attorney General Michelle Henry said. “We do not care where you are located; if you exploit Pennsylvania consumers, you will hear from us. This settlement will make whole the victims of AEL’s scam and puts other wrongdoers on notice.”

Under Pennsylvania usury and racketeering laws, title loans are effectively prohibited because title lenders generally charge interest rates far above the commonwealth’s 27 percent annual interest limit.

As part of the settlement, AEL and its successors, agents, owners, employees, and officers are prohibited from ever again making vehicle title loans to Pennsylvania residents.

The settlement follows several years of litigation against AEL stemming from the company’s ultimately futile attempts to stall the investigation.

Aura, a provider of intelligent safety, unveiled a new partnership with eLend Solutions aimed at reducing fraud for auto dealerships and their customers. The partnership means dealers will have access to enhanced authentication tools during the purchase process, as well as post-purchase identity protection tools to aid in compliance with the new Federal Trade Commission (FTC) Safeguards Rule.

An automotive fintech company that works with thousands of auto dealers, eLend Solutions is a specialist in identity verification and authentication technologies for auto dealerships. According to an eLend Solutions study, 79% of dealers experienced identity fraud-related vehicle loss at their dealership. A fraudulent sale can cost auto dealers more than $100,000 per instance. In 2021 alone, dealerships lost an estimated $7.7 billion to identity theft-related auto loans. And the problem will only get worse. The majority of dealers agree that, as more transaction processes move online, the larger the problem of identity fraud will become.

“Fraud is causing increasing losses for auto dealers and, without being able to properly validate and authenticate ID documents and buyer identities, dealerships remain particularly vulnerable,” said Pete MacInnis, CEO of eLend Solutions. ”Our mission with our partnership with Aura, which includes forensic authentication of driver's licenses, is to have a positive impact on our industry by making it easy for auto dealers to combat this systemic fraud.”

Aura's protection program features three core offerings:

1. Aura Reseller Program: Dealers have the option to offer one free year of Aura protection to customers as part of their commitment to protecting buyers from theft. At the end of one year, customers will have the opportunity to extend their protection and wrap the fees into their auto loan payment for less than $5.00 per month.
2. ID Scanning Technology: In partnership with eLend Solutions, the protection package offers driver's license scanning and authentication technology to help dealerships prevent fraudulent car purchases.
3. Breach Response Readiness: Leveraging Aura's breach support saves dealers time in development of their mandatory breach response planning.

A group of U.S. senators introduced the AM for Every Vehicle Act, which is bipartisan legislation that would direct federal regulators to require automakers to maintain AM broadcast radio in new vehicles at no additional charge. The legislation follows from the letter that Democratic Sen. Ed Markey sent to 20 of the world’s leading carmakers last year requesting that they maintain access to AM broadcast radio in their vehicles. Of the 20 carmakers, eight had removed AM broadcast radio from their electric vehicles. 

Specifically, the AM for Every Vehicle Act would:

• Direct the National Highway Traffic Safety Administration (NHTSA) to issue a rule that requires automakers to maintain AM broadcast radio in their vehicles without a separate or additional payment, fee, or surcharge;
• Require any automaker that sells vehicles without access to AM broadcast radio before the effective date of the NHTSA regulation to clearly disclose to consumers that the vehicle lacks access to AM broadcast radio;
• Direct the Government Accountability Office (GAO) to study whether alternative communication systems could fully replicate the reach and effectiveness of AM broadcast radio for alerting the public to emergencies.

“For decades, free AM broadcast radio has been an essential tool in emergencies, a crucial part of our diverse media ecosystem, and an irreplaceable source for news, weather, sports, and entertainment for tens of millions of listeners,” said Markey. “Carmakers shouldn’t tune out AM radio in new vehicles or put it behind a costly digital paywall.”