Attorney General's News Release

August 20, 2008

Nixon obtains order requiring seller of vehicle extended service contracts to change business practices, pay $29,955

Jefferson City, Mo. - A St. Louis-area business that sent misleading postcards and letters to consumers informing them that they had limited time to purchase renewed, extended warranties for their vehicles will pay $29,955 to consumers and the state, and make fundamental changes in the way it operates. Attorney General Jay Nixon had sued National Dealers Warranty Inc. and five other businesses in March as part of "Operation Taken for a Ride", a crackdown on fraudulent solicitations for motor vehicle extended service contracts (MVESCs).

The lawsuit against National Dealers Warranty (NDW) alleged that the St. Peters business failed to inform consumers that it was not affiliated with the dealers or manufacturers of the vehicles, or that it was actually selling motor vehicle extended service contracts instead of warranties. Because of the misrepresentations, Nixon said, some consumers purchased contracts they did not need.

"The common theme in the legal action we took in March was that consumers were frightened or misled into purchasing goods or services they didn't need, often at a cost of hundreds, or even thousands, of dollars," Nixon said. "Today's consent judgment forces one of these companies to change how it does business, and requires it to give consumers more accurate information in making a purchasing decision."

The consent judgment filed today in St. Charles County requires NDW to pay $4,955 in restitution to four consumers and $25,000 to the Attorney General's Office for its costs in bringing the lawsuit. Nixon said the order also requires NDW to make fundamental changes in its solicitations. Those changes include prohibiting the company from:

• Informing potential customers that their current auto warranties are expired unless this statement is true and is followed by a disclaimer stating that this assertion does not take into consideration any extended service contracts that the potential customer may have already purchased;
• Offering to sell MVESCs to potential customers without informing them that NDW is not selling an extended motor vehicle warranty;
• Offering to sell MVESCs to potential customers without informing them that NDW is not affiliated with the manufacturer that produced the customers' motor vehicles or the dealers who sold the motor vehicles when they were brand new;
• Offering to sell MVESCs to potential customers without giving them, when requested, an opportunity to review the MVESC contract form before they agree to purchase same;
• Omitting to inform potential customers that NDW is merely selling MVESCs on behalf of a third party who will actually be responsible for administering the MVESC; and
• Offering to sell MVECS through the use of automated telemarketing calls unless such calls are administered in full compliance with laws including, but not limited to, Do-Not-Call regulations/laws at both the state and federal level.

Lawsuits against five other businesses that were sued as part of Operation Taken for a Ride are still pending.

Nixon encouraged consumers who have complaints about businesses selling motor vehicle extended service contracts to file complaints with his office, either by going online to ago.mo.gov, or by calling the Consumer Protection Hotline (Missouri only) at 1-800-392-8222.

Learn more about extended car warranty offers

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818