Attorneys General Target Two Companies Selling Pricey Auto Service Contracts
Attorneys general from nine states have filed suits claiming marketers are using misleading tactics to sell expensive automobile service contracts.
Nine attorneys general have sued U.S. Fidelis, and five of them have also sued the Credexx Corp., which does business as Auto One Warranty Specialists, according to a press release. The suits claim the companies pitched their pricey extended auto warranties with direct mail warning of expired warranties, robocalls that disguised the origin of the calls, and misleading TV ads.
The prosecutor leading the two-year, multistate investigation into the companies is Mary Lobdell of the Washington Attorney General’s consumer protection division, the St. Louis Post-Dispatch’s The Savvy Consumer blog reports.
According to the suits, the companies claimed their service plans were “extended warranties” provided by car manufacturers or dealers that provide bumper-to- bumper coverage of all major repairs. “Unfortunately for consumers, their representations were lies,” Lobdell alleged in the press release.
She cites the cases of dissatisfied consumers in Washington state. A Kirkland woman who paid $1,833 for coverage for a 2007 Prius discovered that the contract didn’t cover the cost of replacing the battery pack. A Pasco man was told a plan would cover his truck, but discovered in the fine print that his vehicle was exempted because of its trailer hitch.
U.S. Fidelis filed for bankruptcy on March 1.
The press release has the Washington state complaint (PDF) against Credexx and its complaint (PDF) against U.S. Fidelis.
