Mo. AG reaches settlement with vehicle breakdown coverage provider

By Nick Rees | Nov 28, 2012

JEFFERSON CITY, Mo. (Legal Newsline) - Missouri Attorney General Chris Koster announced a $399,400 settlement with a St. Peters-based vehicle breakdown coverage service on Tuesday.

NRRM LLC, doing business as StopRepairBills since late 2009 and now advertising under the name Vehicle Protection Center, is required by the settlement to reform its business practices.

NRRM was formed by the merger of National Dealers Warranty and Auto Warranty Protection Services. In operating a call center to offer vehicle breakdown coverage, NRRM allegedly deceptively advertised nationwide in television and radio commercials that it would pay 100 percent of consumers' repairs bill.

The company allegedly trained its salespeople to use generalized and misleading descriptions of the coverage it offered to sell vehicle breakdown coverage and taught its staff to use delay tactics for consumers seeking a refund. The company would the only give 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."

Under terms of an injunction entered into on Tuesday by Jackson County Judge Edith Messina, NRRM must reform its business practices in the offer and sale of vehicle sales contracts.

The injunction also prohibits the sale of "additive contracts," which are structure as product warranties but sold as vehicle service contracts to avoid being regulated under insurance and contract laws. Such contracts were sold by NRRM, which arranged for the delivery of a bottle of ordinary oil additive with a contract that provided very limited breakdown protection and had no relationship to the performance of the bottled product.

A restitution fund of $187,200 was established by the consent judgment for Missouri consumers who purchased additive coverage. A total of $25,000 is provided to the state in the settlement to be used for consumer law enforcement. An additional $187,200 in civil penalties were also imposed by the judgment, which allows for potential future recovery for other complaints.

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