Bryan Cohen Jan. 30, 2014, 3:25pm
JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster reached a settlement on Tuesday with the owners of a former St. Charles-based seller of extended auto service contracts to resolve allegations of deceptive practices.
Dealer Warranty Services LLC, which also did business as Certus and Certus Assurance Group, and its owners, Theodore Conrad, the company's president, and Jeff Zykan, the company's vice president, allegedly engaged in deceptive practices, unfair practices and unlawful insurance practices.
The company allegedly used direct mail advertisements to urge customers to call for a limited-time extended warranty program. Once on the phone, salespeople allegedly sold the consumers vehicle breakdown coverage with misleading claims. The contracts were allegedly provided by a third party and did not contain the coverage promised.
Consumers who requested refunds allegedly dealt with objections and delays.
"Consumers who purchase vehicle repair coverage over the phone often later realize significant limits to coverage in the written contract," Koster said. "Before purchasing a service contract, we encourage Missouri consumers to carefully review its provisions to ensure that the contract contains everything promised."
Under the terms of the settlement, Conrad and Zykan must pay $60,000 to the state, $55,000 of which will serve as a restitution fund to provide refunds to Missourians who bought the additive coverage. The settlement includes the payment of $2,000 in civil penalties and forfeitures and $3,000 for consumer law enforcement. Conrad and Zykan are also permanently prohibited from selling unlawful vehicle service contracts in the state.
"Our office has prosecuted a number of businesses that disregarded our consumer laws," Koster said. "This settlement highlights our efforts to clean up the auto service contract industry in Missouri and protect consumers from future deceptive sales practices."