RALEIGH, N.C. (Legal Newsline) - North Carolina Attorney General Roy Cooper announced on Thursday that he has barred an auto service warranty company and its owner from doing any further business in the state due to alleged misrepresentation of products and services.
A consent judgment and permanent injunction was made against the California-based Credexx Inc., also doing business as Auto One Warranty Specialists, and David J. Tabb, its owner, stopping them from continuing business in North Carolina.
Cooper said that the ban will also apply to any business that Tabb owns, operates or manages now and in the future. Tabb is also not allowed to train anyone or sell materials to anyone in North Carolina.
"My office hears frequently from consumers who pay for service contracts that don't live up to the hype," Cooper said. "We're keeping a close eye on these auto service contract sellers to make sure consumers get treated fairly."
Cooper sought the court order to resolve a case that alleged the parties misled consumers about the benefits and coverage of service contracts. He also alleged that they failed to provide written contracts to numerous consumers and failed to disclose key terms and restrictions. The company also allegedly never made refunds when requested.
The suit alleged that Credexx mailed postcards or made telemarketing calls telling consumers that their auto warranties were about to expire. It followed that up with high-pressure sales tactics, Cooper claims.
Many consumers wanted to cancel their contract as soon as they read all the exclusions and limitations in the contract, but it was allegedly almost impossible to cancel and get a refund.
Cooper received complaints from 22 consumers about Credexx and Auto One Warranty Services.
"Don't let a high-pressure sales pitch convince you to buy a service contract you may not really want or need," Cooper said. "Before you agree to pay for any auto service contract, ask for a copy and read it carefully to make sure it lives up to the sellers' promises."
If Credexx or Tabb are in violation of the judgment at any time, they will be required to pay $50,000.
In November, Cooper won a similar agreement with U.S. Fidelis, formerly the nation's No. 1 seller of car service contracts.