ST. CHARLES, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced a $53,000 settlement Friday with the owners of a former St. Charles-based auto service contract business to resolve allegations of deceptive practices.

The settlement resolves a lawsuit against William Webb, Tina Smith, Dustin Davis and Jonathan Stubblefield, and Enterprise Warranty Group LLC, doing business as Dealership Services.

Under the terms of the settlement, Webb, Smith and Davis must pay $53,177 and Stubblefield is permanently enjoined from selling unlawful auto service contracts in Missouri. The settlement also completely prohibits the sale of additive contracts in Missouri and requires the defendants to reform their business practices in the offer and sale of vehicle service contracts in the state.

Dealership Services operated a call center that sold vehicle breakdown coverage and marketed its services through direct mail advertisements. Once customers were on the phone, salespeople allegedly sold vehicle breakdown coverage with a generalized and misleading description. The company allegedly sold contracts that failed to provide promised coverage and put numerous objections and delays in place when customers tried to obtain partial refunds.

"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."

The settlement establishes a restitution fund of $38,177 to provide full refunds to consumers, pays $10,000 to the state for consumer law enforcement and imposes $5,000 worth of civil penalties and forfeitures.

More News