Lawsuits filed against four Missouri businesses over bogus auto warranties‏

Nick Rees Jan. 4, 2010, 3:30pm

Chris Koster (D)

JEFFERSON CITY, Mo. (Legal Newsline) - Attorney General Chris Koster, as part of his ongoing crackdown on the sale of bogus auto warranty products, has filed lawsuits against four additional businesses.

"I believe this warranty business is rampant with fraud, and Missouri continues to be at the center of this deception," Koster said. "This office will continue to pursue and prosecute businesses such as these that target unsuspecting, innocent consumers."

The businesses, Koster alleges, used misleading telemarketing, letters and postcards to market to consumer what appeared to be "extended auto warranties." These so-called warranties, however, were actually "service contracts" or "automotive additives."

"This extended warranty scam is nothing but a 'bait and switch' scheme that preys on consumers' fears having inadequate vehicle warranty coverage," Koster said. "The 'bait' is to lure vulnerable consumers into extending or purchasing 'auto warranties.' Then the 'switch' is to sell them service contracts, or worse, auto additive warranties with inferior or negligible repair coverage, then making it almost impossible for the consumers to cancel the contract or get refunds."

Consumers were also mistakenly lead to believe by the businesses that their current vehicles warranties were set to expire and that they would not have another opportunity to purchase an extended warranty unless they acted immediately. Many of these potential customers were not informed that the businesses were not affiliated with the dealership or manufacturer from whom the customers purchased their vehicles.

Many of the consumers were also unaware that they had purchased auto additives, not auto warranties, with limited value until they received them in the mail. The products were sold as auto additives to allow the companies to avoid Missouri's service contract laws, which provide some minimal protection for consumers.

The lawsuits against the four businesses follow six lawsuits filed in November against six companies using similar scams.

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