Koster settles suit over sales techniques

Bryan Cohen May 30, 2012, 7:00am


JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced an $18,500 settlement on Tuesday with a vehicle extended service contract seller to resolve allegations of deceptive sales techniques.

Dealership Warranties Inc., doing business as National Vehicle Protection Services, must restructure the way it sells vehicle service contracts under the terms of the agreement. Salespeople for Dealership Warranties must also describe the details of written contracts during phone calls.

The necessary terms and conditions include information about the consumer's rights to a pro rata refund if the contract is canceled prior to the full term of the contract, the procedures for canceling and the consumer's right to cancel the contract within a certain period of time to receive a full refund, obligations of the consumer to document and perform past or future maintenance, requirements for prior approval of vehicle repair, any deductibles as part of the contract, information about what is not covered and the limits of coverage provided, and the identity of the service contract provider responsible for paying claims under the contract, which is not Dealership Warranties.

If Dealership Warranties completes a contract during a telephone transaction, it must record the transaction electronically and mail the written contract within three business days.

"Missouri law says consumers have a right to see a written service contract and agree to its terms," Koster said. "Customers who purchase vehicle repair coverage by telephone often later realize the significant limits to coverage in the written contract. It is important for Missouri consumers to protect themselves by carefully reviewing vehicle service contracts to make sure they contain the provisions promised."

Dealership Warranties will continue in business under the name National Vehicle Protection Services under an injunction issued on Tuesday by St. Louis County Judge Barbara Wallace.

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