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Attorney General's News Release

January 28, 2014

Consumers to get refunds in auto service contract settlement

Jefferson City, Mo.Attorney General Chris Koster said today his office has reached a settlement with the owners of a former St. Charles-based vehicle extended-service-contract seller, Dealer Warranty Services, LLC, which also did business under the name "Certus" and "Certus Assurance Group." Under the terms of the settlement, the company and its vice president and president, Theodore Conrad and Jeff Zykan, are ordered to pay $60,000 to settle claims of deception, unfair practices, and unlawful insurance practices. The men are permanently prohibited from selling unlawful vehicle service contracts in Missouri.

According to Koster, Dealership Warranty Services marketed throughout the United States primarily through direct mail advertisements, urging consumers to call for a limited-time extended warranty program to save thousands of dollars on repair bills. Once on the phone, salespeople would sell vehicle breakdown coverage with a generalized and often misleading description of the coverage. Many customers later discovered their contracts were actually provided by a third party, and did not contain the coverage promised. Consumers who asked for refunds faced numerous objections and delays.

"Consumers who purchase vehicle repair coverage over the phone often later realize significant limits to coverage in the written contract," Koster said. "Before purchasing a service contract, we encourage Missouri consumers to carefully review its provisions to ensure that the contract contains everything promised."

The injunction entered by St. Charles County Judge Daniel Pelikan requires the defendants to reform their business practices in the offer and sale of vehicle service contracts in Missouri to comply with state law. It also completely prohibits the sale of "additive contracts" in Missouri. Typically, the defendants would mail to the consumer a contract that provided very limited breakdown protection, along with a bottle of ordinary oil additive. The defendants characterized the oil additive as a "product warranty," in a scheme to circumvent Missouri's insurance and service contract laws. In reality, items included in the breakdown protection contract, such as air conditioning, had little or no relationship to the oil additive.

The settlement establishes a restitution fund of $55,000 to provide refunds to Missouri consumers who were sold this additive coverage. The settlement also provides $3,000 to the state for consumer law enforcement. The judgment imposes civil penalties and forfeitures in the amount of $2,000.

"Our office has prosecuted a number of businesses that disregarded our consumer laws," Koster said. "This settlement highlights our efforts to clean up the auto service contract industry in Missouri and protect consumers from future deceptive sales practices."

The case was brought by the Attorney General and Director John Huff of the Department of Insurance, Financial Institutions and Professional Registration. Missouri law requires that both motor vehicle extended service contract sellers and providers of such contracts be registered with the Department of Insurance. Koster and Huff encourage consumers to verify that a business is licensed to do business in Missouri by calling the Department of Insurance at 800-726-7390 or visiting

Koster suggests that consumers who have complaints about service contract fraud contact the Attorney General's Office at or by calling the Attorney General's Consumer Protection hotline at 800-392-8222. Consumers should also report service contract complaints to the Department of Insurance at 800-726-7390 or

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