November 9, 2011
Jefferson City, Mo. -– Attorney General Chris Koster said today his office has obtained a consent judgment against a St. Peters-based company, Vehicle Services, Inc., and its owner, Steven Chapa, for alleged violations of Missouri’s Merchandising Practices Act.
According to Koster, Vehicle Services, which is no longer in business, marketed what appeared to be “extended auto warranties” to consumers through direct mail, the internet, and by telephone. The “extended warranties actually were “service contracts” or “automotive additives.” He said the consumers were mistakenly led to believe their current vehicle warranties were about to expire and that they would not have another opportunity to purchase an extended warranty unless they acted immediately. Many potential customers were not informed that Vehicle Services was not affiliated with the dealership or manufacturer from whom the customers bought their vehicles.
“I want to emphasize to consumers their right to see a written service contract and agree to its terms. Under Missouri law, the failure to contract in writing is a violation of Missouri’s Motor Vehicle Extended Service Contract law,” Koster said.
Customers who purchased coverage under “service contracts” by telephone often later realized the significant limits to coverage. Customers asking for a cancellation or refund when they discovered the provider would not pay a claim were often denied a refund or made to go to great lengths to obtain a partial refund.
Koster said under the settlement agreement, Chapa must pay the state $25,000 in restitution and civil penalties and is prohibited from any further violation of Missouri’s Merchandising Practices Act and Vehicle Extended Service Contract law.
Koster encourages consumers who have complaints about businesses selling motor vehicle extended service contracts to contact the Attorney General’s Office at ago.mo.gov or by phone calling the Attorney General’s Consumer Protection hotline at 1-800-392-8222.