Bryan Cohen Feb. 28, 2014, 2:48pm

NEWARK, N.J. (Legal Newsline) - New Jersey Acting Attorney General John Hoffman filed a lawsuit on Wednesday against a vehicle repair coverage plan provider that allegedly refused to pay consumers when repairs were needed.

Direct Buy Associates Inc., which does business as Direct Buy Auto Warranty, allegedly violated the state's Consumer Fraud Act by advertising its vehicle service contractors as warranties. Warranties are offered by the manufacturers or sellers of products, but service contracts are offered by third-parties like Direct Buy Associates.

Additionally, the vehicle service contracts Direct Buy Associates sold allegedly provided limited coverage and various exclusions.

"Consumers are out thousands of their hard-earned dollars because of the alleged business practices of this company," Hoffman said. "We are seeking court approval to get restitution paid back to the affected consumers."

Close to 250 consumers nationwide filed complaints against Direct Buy Associates, one of the highest amounts against any active company in New Jersey. Some consumers alleged they had to pay for repair costs themselves when the company denied repairs covered under the plan. Other consumers alleged they did not receive full refunds in a timely fashion when they attempted to cancel their contracts.

The lawsuit seeks the assessment of civil penalties, reimbursement of legal fees and consumer restitution.

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