Extended Warranty Scam Bilked Consumers of Over $6 Million
American Vehicle Protection Corp. and its principals deceptively sold auto warranties through outbound telemarketing, falsely claiming affiliation with car dealers and manufacturers, promising illusory coverage, and denying refunds. Over $6 million was stolen from consumers.
American Vehicle Protection Corp. ran a nationwide telemarketing scheme from at least 2018 through 2021, deceiving consumers into buying overpriced extended auto warranties by falsely claiming to represent car manufacturers or dealers, promising comprehensive bumper-to-bumper coverage that did not exist, and refusing to provide promised refunds. Telemarketers routinely called numbers on the Do Not Call Registry and used illegal payment methods. The Federal Trade Commission shut down the operation and obtained a $6.5 million judgment, though most was suspended based on the defendants’ claimed inability to pay.
This case shows how easily predatory businesses can exploit consumer trust and regulatory gaps to steal millions before being stopped.
The Allegations: A Breakdown
| 01 | Telemarketers falsely told consumers they were calling from or were affiliated with the consumer’s vehicle manufacturer or dealer. Scripts instructed telemarketers to say things like ‘Hi, this is Joe with Ford dealer services’ when calling Ford owners, even though the company had no affiliation with any manufacturers or dealers whatsoever. | high |
| 02 | The company promised comprehensive bumper-to-bumper or full vehicle coverage, but the actual warranty booklets received after payment contained extensive lists of non-covered parts and conditions that voided coverage. One consumer was assured struts were covered but found they were not when making a claim. Another was denied coverage for an oil pump replacement despite promises of full vehicle coverage. | high |
| 03 | Defendants guaranteed consumers could obtain a full refund within 30 days if unsatisfied, but systematically denied or delayed refunds when consumers discovered the deception and attempted to cancel. Many phone calls and messages went unanswered. Refunds often only materialized after intervention from the Better Business Bureau or governmental authorities. | high |
| 04 | The company frequently used Remotely Created Checks or Remotely Created Payment Orders to obtain funds from consumers’ bank accounts without authorization. This payment method is explicitly illegal in telemarketing transactions and violates the Telemarketing Sales Rule. | high |
| 05 | Telemarketers routinely made outbound calls to telephone numbers on the National Do Not Call Registry. Managers were aware of this practice and instructed telemarketers to continue calling these numbers. The defendants never paid the required annual fee for access to the Do Not Call Registry. | high |
| 06 | The operation continued its deceptive practices even after learning of the FTC investigation in August 2021. The defendants were still making misrepresentations and illegal calls as late as November 22, 2021, demonstrating brazen disregard for regulatory oversight. | high |
| 07 | Charles Gonzalez established My Protection Plan Inc. even after he and his brother Tony had previously been ordered by the Florida Office of Insurance Regulation to cease and desist from operating an illegal auto warranty business. This suggests deliberate circumvention of prior regulatory action. | high |
| 08 | The individual defendants Tony Allen Gonzalez, Charles Gonzalez, and Daniel Kole formulated, directed, controlled, and participated in the deceptive acts. Tony Gonzalez supervised telemarketers and provided scripts. Daniel Kole reviewed and dictated changes to the deceptive telemarketing scripts and provided start-up funds for the operation. | high |
| 01 | The fraudulent scheme operated for at least four years, from 2018 through 2021, before the FTC filed its complaint in February 2022. During this extended period, the defendants bilked consumers of over $6 million while operating openly with business addresses in Florida. | high |
| 02 | Charles Gonzalez was able to create a new corporate entity, My Protection Plan Inc., to continue similar operations after he and his brother had previously received a cease and desist order from Florida regulators for operating an illegal auto warranty business. This demonstrates how individuals can simply form new entities to circumvent previous enforcement actions. | medium |
| 03 | The defendants exploited weaknesses in the payment system by using Remotely Created Checks, which the FTC complaint notes are difficult for individual financial institutions to monitor as a class and are often used to evade authorization requirements and protections in the ACH system. | medium |
| 04 | Despite the existence of a National Do Not Call Registry designed to protect consumers from unwanted telemarketing, the defendants routinely violated it by calling registered numbers without authorization or payment, and continued these practices even after the FTC investigation began. | medium |
| 05 | The defendants operated through a network of interconnected companies including American Vehicle Protection Corp., CG3 Solutions Inc., Tony Gonzalez Consulting Group Inc., and Kole Consulting Group Inc. This corporate complexity made it harder to trace financial flows and pinpoint responsibility, though the FTC ultimately designated them a common enterprise. | medium |
| 01 | The entire operation was designed to extract maximum revenue from consumers through systematic deception. Every tactic employed, from misrepresenting affiliations to promising non-existent coverage to denying refunds, was calculated to maximize the over $6 million in illicit profits. | high |
| 02 | Scripts provided to telemarketers deliberately instructed them to make false claims about affiliation with car manufacturers or dealers. This was not accidental but a core element of the sales strategy designed to gain immediate trust and lower consumer defenses. | high |
| 03 | The company’s practice of holding onto consumer funds by denying or delaying refunds, even within the promised 30-day window, directly benefited cash flow. The company’s internal policy appeared to be resisting refunds unless external pressure from the BBB or government authorities became too significant. | high |
| 04 | Management made a calculated decision to call individuals on the Do Not Call Registry without paying required fees, conducting a cost-benefit analysis that prioritized potential sales over legal compliance and consumer privacy. Tony Gonzalez allegedly put Do-Not-Call registered numbers back into the system to be called again. | high |
| 05 | The consulting groups Tony Gonzalez Consulting Group and Kole Consulting Group served as vehicles to channel funds from the warranty sales companies, indicating direct financial benefit to the individual defendants from the fraudulent operations. Tony Gonzalez was the primary signatory on company checks and endorsed remotely created checks from consumers. | medium |
| 06 | Warranties were sold for between $2,800 and $3,400 each, representing a significant financial burden for many families. The high price point combined with the deceptive practices about coverage maximized revenue extraction from each victim. | medium |
| 01 | Consumers lost over $6 million since 2018 paying for warranties that were misrepresented and often failed to provide promised coverage or refunds. Individual consumers paid between $2,800 and $3,400 for each fraudulent warranty, representing a significant financial hit for many families. | high |
| 02 | When consumers’ vehicles needed repairs they believed were covered by the bumper-to-bumper warranty, they faced unexpected out-of-pocket expenses because the warranties had significant restrictions. One consumer was denied coverage for struts, another for an oil pump, adding unanticipated repair bills to the original warranty cost. | high |
| 03 | Consumers spent considerable time and effort trying to get the services they paid for or to obtain promised refunds. Many phone calls went unanswered and messages were not returned, forcing victims to file complaints with the Better Business Bureau or governmental authorities, representing a loss of valuable time and productivity. | medium |
| 04 | The monetary judgment against the defendants was $6.5 million, but most of this amount was suspended based on the defendants’ financial disclosures. Charles Gonzalez was ordered to pay only $3,000. Daniel Kole and Kole Consulting Group were ordered to pay $500,000. Tony Gonzalez was ordered to sell two luxury watches and transfer bank funds. The actual recovery is unlikely to cover the full consumer losses. | high |
| 05 | The investigation and prosecution of the case by the Federal Trade Commission incurred public expense funded by taxpayers. These resources could have been allocated elsewhere if the deceptive practices had not occurred. The stipulated orders also require ongoing compliance monitoring and reporting that will continue to draw upon FTC resources. | low |
| 06 | The widespread fraud erodes public trust in the marketplace and the effectiveness of consumer protection mechanisms. Each instance of fraud makes consumers more wary, potentially harming legitimate businesses that operate ethically. | medium |
| 01 | The scheme operated for roughly four years, from at least 2018 until the FTC filed its complaint in February 2022. For every day, week, and month the scheme continued before regulatory intervention, more consumers were deceived and more money was illegitimately acquired, allowing the $6 million in losses to accumulate. | high |
| 02 | The company’s practice of promising refunds within 30 days but then failing to provide them was a direct exploitation of time. By holding onto funds that should have been returned, the company maintained higher cash flow and effectively received an interest-free loan from its victims. The longer they delayed or avoided refunds, the more financial benefit to the company. | high |
| 03 | Even after becoming aware of the FTC’s investigation in August 2021, the defendants continued their misrepresentations and illegal calling practices for several more months, until at least November 2021. This demonstrates a willingness to exploit any remaining time before enforcement actions fully materialized. | high |
| 04 | Charles Gonzalez’s creation of My Protection Plan Inc. after a previous cease and desist order from the Florida Office of Insurance Regulation suggests an attempt to use time and corporate restructuring to escape past regulatory scrutiny and continue operations. Forming a new company takes time and can delay or obstruct the reach of previous enforcement actions. | medium |
| 05 | The time it takes for consumer complaints to accumulate, for patterns of misconduct to become apparent to regulators, for investigations to be conducted, and for legal action to be initiated inevitably creates a window of opportunity for fraudulent enterprises. This regulatory lag allowed the defendants years of profitable illegal operation. | medium |
| 01 | While a monetary judgment of $6.5 million was entered against the defendants, the vast majority of this amount was suspended based on the defendants’ financial disclosures. The actual amounts to be paid totaled only about $503,000 plus luxury watches and bank account funds, a small fraction of the over $6 million in consumer harm caused. | high |
| 02 | The settling defendants neither admit nor deny any of the allegations in the complaint, except as specifically stated in the order. This lack of a full admission of wrongdoing allows the perpetrators to resolve legal issues without formally acknowledging their misconduct, which can be unsatisfying for victims seeking clear accountability. | medium |
| 03 | Given that the collected funds are significantly less than the $6 million in losses, it is highly unlikely that all consumers will receive full or even substantial refunds. Many victims will not be made whole financially, and this shortfall itself is a significant consequence of the inadequate recovery. | high |
| 04 | The legal documents do not indicate criminal charges or jail time for the individual defendants Tony Gonzalez, Charles Gonzalez, or Daniel Kole, as the FTC action was civil. For many members of the public, true accountability for significant fraud includes the possibility of more severe personal consequences beyond financial penalties and business restrictions. | medium |
| 05 | The orders do permanently ban the settling defendants from advertising or selling extended automobile warranties and from engaging in outbound telemarketing. They are also prohibited from various misrepresentations in any future business ventures. These preventative measures are crucial steps but came only after years of harm. | medium |
| 06 | The system prioritized stopping the harmful behavior and recovering what was financially feasible rather than achieving full restitution or punitive measures that satisfy a broader sense of justice. The penalties often do not match the scale of the harm inflicted when widespread consumer deception is involved. | medium |
| 01 | The entire business model was built on misleading statements, with telemarketers falsely claiming affiliation with car manufacturers and dealers and misrepresenting warranty coverage. This direct spin made the product appear more credible and valuable than it was, forming the core of their deceptive tactics. | high |
| 02 | The company routinely ignored consumer complaints by not answering calls, not returning messages, and failing to issue promised refunds until external bodies like the Better Business Bureau or government authorities intervened. This stonewalling served as a crude way to manage negative feedback and avoid accountability. | high |
| 03 | The operation used multiple corporate names including CG3 Solutions Inc. doing business as My Protection Plan Inc., and Tony Gonzalez Consulting Group Inc. doing business as The Gonzalez Group. In the context of a deceptive scheme, using multiple DBAs can create confusion and make it harder for consumers to track and report a company. | medium |
| 04 | Charles Gonzalez registered My Protection Plan Inc. after he and his brother had previously been ordered to cease and desist from operating an illegal auto warranty business. This suggests an attempt to rebrand or continue questionable activities under new entities, shedding the negative reputation associated with previous operations. | medium |
| 05 | The individual defendants knew or consciously avoided knowing about deceptive practices from a steady stream of complaints and publicly available information about the company’s fraudulent enterprise, including an F rating by the Better Business Bureau. Their continuation despite this negative public information demonstrates disregard for public perception. | medium |
| 01 | A relatively small group of individuals and their companies siphoned over $6 million from ordinary consumers through deceptive practices. This occurred through the sale of warranties typically costing $2,800 to $3,400 each, often to individuals seeking peace of mind against unexpected vehicle repair costs that can be a significant burden for many households. | high |
| 02 | Tony Gonzalez Consulting Group and Kole Consulting Group served as conduits for the individual defendants to be paid from the funds acquired by the warranty sales companies. This setup suggests a direct funneling of the proceeds from the deceptive sales to the individuals at the top of the operation. | high |
| 03 | Tony Gonzalez was the primary signatory on company checks used to pay for various aspects of the telemarketing operation, and he endorsed the remotely created checks from consumers. Daniel Kole provided start-up funds for the operation. These details point to the individuals having significant control over and access to the finances. | medium |
| 04 | Tony Gonzalez was ordered to sell a Cartier Calibre de Cartier Diver Watch and a Breitling Officine Panerai Luminor Chromograph Firenze 1860 watch as part of the settlement. These luxury watch brands suggest significant personal wealth accumulated, likely through the fraudulent scheme. | medium |
| 05 | The nature of the scheme involved extracting thousands of dollars per victim and transferring that money from numerous consumers to the defendants. This represents a direct wealth transfer, often from those who could ill afford the loss to those orchestrating the deception, inherently contributing to wealth disparity. | high |
| 01 | This was not a case of misunderstanding or poor service but a calculated enterprise built on deception. The scripted lies fed to consumers by telemarketers and the blatant disregard for consumer protection laws like the Telemarketing Sales Rule demonstrate the defendants’ contempt for legal standards and consumer rights. | high |
| 02 | The scheme operated for years, bilking consumers of millions, before regulatory action halted it. This prolonged timeline demonstrates how predatory businesses can exploit perceived weaknesses or gaps in regulatory enforcement and thrive when oversight is insufficient. | high |
| 03 | While the FTC intervention stopped the illegal activities and secured some funds for potential redress, many victims are unlikely to recoup their full losses. The vast suspension of the monetary judgment based on claimed inability to pay highlights the often limited nature of restitution in such cases. | high |
| 04 | The case serves as a sobering reminder of vulnerabilities within modern economies that allow predatory behavior to thrive. It demonstrates how existing structures, often prioritizing corporate interests or failing to adequately resource regulatory bodies, can leave communities and individuals exposed to systematic fraud. | high |
| 05 | This case presses the urgent need for stronger consumer protections, more robust enforcement mechanisms, and a fundamental re-evaluation of a system that too often seems to shield corporations more effectively than it protects the people they are supposed to serve. | high |
Timeline of Events
Direct Quotes from the Legal Record
“Defendants misrepresent that they are, or are affiliated with, a consumer’s vehicle manufacturer or dealer.”
๐ก This false claim of affiliation was central to gaining consumer trust and was completely fabricated.
“AVP’s telemarketing scripts direct telemarketers to introduce themselves in part by stating, ‘Hi, this is Joe [or other name] with ______ dealer services,’ filling in the name of the manufacturer or dealership of the car owned by the consumer being called.”
๐ก The deception was not accidental but deliberately scripted and required by management.
“Defendants’ scheme has bilked consumers of over $6 million since 2018.”
๐ก This quantifies the massive scale of financial harm inflicted on ordinary consumers.
“Defendants make illusory promises of ‘bumper-to-bumper’ coverage or otherwise misrepresent the terms and conditions of their purported extended automobile warranties.”
๐ก Consumers were sold comprehensive coverage that simply did not exist as described.
“Defendants do not give the refunds promised to consumers.”
๐ก The promised safety net of a refund was a lie, trapping consumers after they discovered the fraud.
“Individual Defendants, as well as principals, officers, and managers of AVP, have known or consciously avoided knowing about deceptive practices directed by, or under the control of, Defendants from a steady stream of complaints about AVP’s business practices.”
๐ก The individuals at the top knew about the harm they were causing and chose to continue anyway.
“The use of remotely created checks (‘RCCs’) in telemarketing transactions is a violation of the TSR, 16 C.F.R. ยง 310.4(a)(6).”
๐ก The defendants used a payment method that is explicitly illegal in telemarketing to drain consumer bank accounts.
“Defendants often place outbound calls to telephone numbers that have been put on the Do Not Call Registry. AVP managers are aware of this fact and have told telemarketers to keep calling numbers on the DNC list. In addition, Defendants have never paid the annual fee required to obtain access to the DNC.”
๐ก Management knowingly violated consumer privacy protections and instructed staff to do the same.
“Despite becoming aware of an FTC investigation in August 2021, Defendants continued to make misrepresentations…as recently as November 22, 2021.”
๐ก The defendants brazenly continued defrauding consumers even after federal investigators were onto them.
“AVP and MPP conducted the business practices described below as interrelated companies that have common managers, business functions, employees, and office locations, and have commingled funds.”
๐ก The corporate structure was designed to funnel illicit profits while obscuring accountability.
“TGCG is the conduit by which Tony Gonzalez is paid for the work he performs for AVP and MPP…KCG is the conduit by which Daniel Kole is paid for the work he performs for AVP and MPP.”
๐ก The consulting groups were vehicles to directly enrich the individual defendants from the fraudulent scheme.
“Prior to establishing MPP, Charles Gonzalez and Tony Gonzalez had been ordered by the Florida Office of Insurance Regulation to cease and desist from operating an illegal auto warranty business.”
๐ก Charles Gonzalez simply created a new company to continue illegal activities after being ordered to stop.
“Consumers who attempt to cancel and request a refund often find their phone calls go unanswered and their messages are not returned. Defendants typically issue refunds only after the consumer has filed a complaint with the BBB or a governmental authority.”
๐ก The company systematically avoided honoring its refund promises unless forced to by outside intervention.
“Settling Defendant Charles Gonzalez is ordered to pay to the Commission three thousand dollars ($3000)…Upon such payment to the Commission, as specified in Subsections C and D, the remainder of the judgment as to Tony Gonzalez…is suspended.”
๐ก Despite over $6 million in consumer harm, one defendant paid only $3,000 and others had most of their judgment suspended.
“Settling Defendants neither admit nor deny any of the allegations in the Complaint, except as specifically stated in this Order.”
๐ก The perpetrators settled without formally acknowledging their fraudulent conduct, a common frustration in corporate accountability.
Frequently Asked Questions
I nabbed that document from the FTC’s website on this case: https://www.ftc.gov/system/files/ftc_gov/pdf/avp.final_order.filed_with_s.d.fla_.pdf
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