Judgment worth $25K to Missouri

Bryan Cohen Nov. 9, 2011, 1:44pm


JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced on Wednesday that his office has obtained a consent judgment against a St. Peters-based company and its owner for alleged violations of Missouri's Merchandising Practices Act.

Vehicle Services Inc. and its owner, Steven Chapa, marketed what appeared to be "extended auto warranties" to consumers through the internet, direct mail and by telephone. The extended warranties were allegedly "service contracts" or "automotive additives." Consumers were led to believe that their current vehicle warranties were about to expire and that they would not have another opportunity to purchase an extended warranty without acting immediately, Koster says.

Many potential customers were allegedly not informed that Vehicle Services, which is no longer in business, was not affiliated with the manufacturer or dealership from whom the customers bought their vehicles.

"I want to emphasize to consumers their right to see a written service contract and agree to its terms," Koster said. "Under Missouri law, the failure to contract in writing is a violation of Missouri's Motor Vehicle Extended Service Contract law."

Customers who purchased coverage under "service contracts" by telephone often later realized the coverage's significant limits. Customers asking for a refund or cancellation when they discovered the provider would not pay a claim were allegedly often denied a refund or made to go to great lengths to obtain a partial refund.

Under the settlement agreement, Chapa is required to pay the state $25,000 in restitution and civil penalties and is prohibited from any further violation of Missouri's Merchandising Practices Act and Vehicle Extended Service Contract law.

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