Mo. AG settles with Carsafe

Bryan Cohen Sep. 25, 2012, 1:00pm


JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced a $22,500 settlement on Tuesday with Carsafe LLC to resolve allegations of deceptive sales techniques.

Under the terms of the settlement, Carsafe, a vehicle service contract seller that previously did business as Dealer Preferred Warranties, must provide $10,000 in consumer restitution and $12,500 in payments to the state. The consent judgment prohibits Carsafe from using deceptive sales techniques while selling vehicle repair coverage and requires that the company describe the details of its written contracts during sales phone calls.

The terms and conditions Carsafe must provide during phone calls include: Information about the identity of the service contract provider; the exclusions, conditions and coverage liability limits under the contract; any deductibles under the contract, requirements for prior approval of vehicle repair, obligations of the consumer to perform and document past or future maintenance; the consumer's right to a free look; the procedure for canceling; and the consumer's right to a pro rata refund of unearned fees for any cancellation prior to the full term of the contract.

Additionally, if Carsafe completes the contract with a consumer during a telephone transaction, the company must electronically record all transactions and mail the written contract within three business days to the consumer.

"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."

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