OLYMPIA, Wash. (Legal Newsline) - Washington Attorney General Rob McKenna has reached a settlement with the former owner of an auto service contracting company that allegedly used illegal robocalls and misleading advertisements.
Credexx and its former owner, David J. Tabb, doing business as Auto One Warranty Specialists, allegedly sold more than 1,340 vehicle service contracts and protection products without providing the "bumper to bumper" coverage that consumers signed up for. The settlement was announced Monday.
The suit also alleged that the company used an illegal robocall system to contact people on the Do Not Call registry and used personal information it collected illegally.
Additionally, the company allegedly did not allow consumers to review their contracts, denied refund requests and violated state licensing and registration laws.
One man was sold a plan even though the fine print on his contract revealed that his vehicle was exempted due to a trailer hitch and towing modifications it contained, McKenna says. A woman who paid over $1,830 for coverage on her 2007 Prius learned that replacing the battery pack on her car wasn't covered, he added, and another man whose vehicle has transmission problems said the company failed to disclose significant limits on the cost of repairs.
"Credexx was one of a several companies that tricked consumers nationwide into buying expensive auto service contracts by claiming to extend manufacturer-provided warranties," McKenna said.
Numerous states filed civil lawsuits in April against Credexx and the Missouri-based U.S. Fidelis alleging that the companies deceived consumers by asserting their service contracts were provided by manufacturers or dealers.
Under Washington's settlement agreement, Tabb is now banned from doing business in the state. The settlement also imposed restrictions that are similar to those that the Ohio, North Carolina and Idaho attorneys general reached with the defendants in a November 2010 multistate agreement with U.S. Fidelis' founders.
The settlement requires Tabb to pay $5,000 to pay for costs associated with the litigation. A $70,000 civil penalty will be suspended if Tabb complies with the settlement.