CarShield has recently been under a lot of legal allegations for trading vehicle service contracts (VSCs). The term “being sued” is legally correct, but the matter is more complicated: CarShield is facing regulatory action as well as a class-action lawsuit.
The Claims of Misleading Advertising:
In July 2024, the Federal Trade Commission (FTC) said that CarShield and its partner American Auto Shield, LLC (AAS) had reached a settlement in which the firms agreed to pay $10 million to address accusations that its advertising and telemarketing were misleading. The FTC said that CarShield’s ads misled customers about what their VSCs covered. They promised that “all repairs” or “covered systems” would be paid for, that customers could use any repair shop they wanted, and that rental cars would be provided for free when repairs were needed. The FTC found that many repairs were denied, clients could only go to select repair businesses, and celebrity endorsements stated that they had used the service when in fact they had not been actual customers.
The Pending Class-Action Lawsuit:
CarShield is also being sued in a federal class-action complaint that was filed in March 2025 in the U.S. District Court for the Eastern District of Missouri. This is in addition to the regulatory settlement. The complaint, called Lindsey-Evans et al. v. NRRM, LLC d/b/a CarShield, LLC, American Auto Shield, LLC, et al., says that the corporations often lied to customers and broke their contracts with them. The accusers claim that they had purchased the VSC plans for their vehicle which were advertised as “comprehensive coverage,” but when they tried to make a claim on it they were refused and had to pay a lot of money from their pockets.
The main Allegations in the lawsuit are:
- CarShield and AAS are misleading it’s customers by giving them VSCs which made it looks like they had enough of coverage.
- Customers assumed that they were insured for expensive maintenance, problems just like the engine and transmission repair with just a $100 deductible price.
- In reality a lot of claims were dismissed because of specific exclusions and fine clauses in the policy contracts.
- The lawsuit requests the court to put a stop to these allegedly misleading acts.
- It also demands towards the damages for fraud, misleading advertisement, breach of contract and violating consumer protection laws.
What Customers Should Know:
From the point of view of a consumer, this means yes- CarShield is being sued, but it has already resolved with regulators. The class-action lawsuit is still going on, though, and it could lead to more liabilities. Even though CarShield didn’t confess to doing anything improper in the FTC settlement, the fact that the FTC called the practice one that left “many consumers with a financial headache” shows how serious the charges are.
Help for Customers Who have been Affected:
This scenario may be important to you if you are or were a CarShield client, especially if you think the policy you bought didn’t do what it said it would. It will help you, if you keep all the records of your contract, monthly premium payments, Policy claim rejections or conversations with the company. You should also keep an eye on the class-action lawsuit to determine if you might be able to join the class.
Conclusion:
The answer to the question of whether CarShield is being sued or not is yes, CarShield is in real legal trouble. It settled with the FTC for false advertising and is currently battling a class-action lawsuit which says it breached contracts and lied about what it offered.
The agreement with the government is only holds certain individual liable but another lawsuit may decide whether or not additional modifications or repairs will be made.
The story makes it clear that how important it is for consumers to read vehicle service contracts carefully & know what this contract covered. If possible ask for a detailed information when advertisements claims seem too good to be true.
