The last time we talked about CarShield was in mid-2024 when it settled with the Federal Trade Commission (FTC) over deceptive advertising charges. At that point, the company had to pay $10 million for its actions. Now, most of that money is headed where it was always supposed to go: back to consumers. More than 168,000 people are receiving payments as part of this settlement.
The settlement, reached in July, applied to both CarShield and its contract administrator, American Auto Shield, LLC. Regulators accused the companies of misleading advertising and telemarketing practices that suggested customers would never have to worry about expensive repairs again.
**Warranty Company Accused of Selling Promises While Drivers Paid Thousands and Got Denials**
In practice, many customers found the coverage they were paying for—sometimes as much as $120 per month—fell apart the moment they actually needed it.
### A Policy That Didn’t Hold
According to the FTC, CarShield’s ads claimed that all repairs, or at least all repairs to “covered” systems, would be paid for. Customers were also told they could use any repair shop they wanted and receive a rental car at no cost if their vehicle broke down.
In reality, however, claims were frequently denied. Exclusions buried in the fine print often left customers footing the bill themselves.
“For many consumers, a personal vehicle is one of their most valuable assets and a vital lifeline for getting to work, taking their kids to school, and obtaining medical care. Instead of delivering the ‘peace of mind’ promised by its advertisements, CarShield left many consumers with a financial headache,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
### More Oversight for Future Ads
Under the settlement, CarShield and American Auto Shield are prohibited from making deceptive or misleading claims going forward. The order also requires that any endorsements and testimonials used in advertising must be truthful, accurate, and not misleading.
The brand has long used celebrity endorsements in its ads, but now the language and claims in those advertisements will be under greater scrutiny.
### Refunds Are On Their Way
For customers affected by this settlement—which totals 168,179 individuals—refund checks are already in the mail. It is important to note that these checks must be cashed within 90 days of receipt.
The FTC also highlighted that it never requires people to pay money or provide account information in order to receive their refund, likely addressing concerns about potential scammers.
If consumers have questions about their payment, they should contact the refund administrator, Analytics, at 855-298-8877.
https://www.carscoops.com/2025/12/ftc-sends-refunds-to-carshield-customers-burned-by-misleading-warranty-claims/
