Can consumers tell you from the bad apples?

Donna Harris covers automotive retailing for Automotive News

Several independent service contract vendors in the St. Louis area have been racking up complaints from consumers around the country who claim they were duped into spending thousands of dollars for service plans with little or no value, the St. Louis Better Business Bureau says.

What does this have to do with you? Nothing. The companies sell service plans directly to consumers, not through dealers.

But these vendors could still hinder your service contract sales.

Here's why:

Dealers primarily sell service plans through the F&I office as part of a vehicle purchase. But some are also using direct marketing techniques to make sales online, through telemarketing and via mail.

The questionable vendors contact their prospects by e-mail, phone or mail, and some have falsely suggested they were affiliated with dealerships or auto manufacturers.

No, these vendors have nothing to do with your dealership. But they're misrepresenting your service contract business.

Service contract providers have worked with regulators to distinguish their legitimate businesses from those of the unscrupulous fraudsters. But consumers may not see the difference.

The next time your dealership contacts customers to inform them their factory warranty is expiring, don't be surprised if some customers hang up in disgust.