Any readers experiencing these 'expired auto warrranty' solicitations?

Minnesota Attorney General Lori Swanson took action in August barring National Auto Warranty Services, Inc., d/b/a Dealer Services (“NAWS”), and National Dealer’s Warranty, Inc. (“NDW”) from using misrepresentations and other questionable marketing tactics to sell motor vehicle service contracts in Minnesota. Under the court-approved Assurances the companies must pay civil fines totaling at least $85,000 and change their direct mail and telemarketing practices significantly.

“Minnesotans who receive mailings indicating that their vehicle’s warranty expired, is about to expire, or that their vehicle is subject to a manufacturer recall may feel intimidated into calling and then be sold a product that they don’t want or need,” said Swanson. “I encourage consumers to be on guard against deceptive motor vehicle service contract offers.”

NAWS and NDW led consumers to believe that the manufacturer or dealer of the consumer’s automobile sent the solicitations. In fact, NAWS and NDW are unrelated to any vehicle manufacturer or dealer. The solicitations included urgent language that caused consumers to believe they had to act immediately or lose their warranty coverage, even though many still had years remaining on their existing warranty and the company marketing the product had no actual knowledge when the consumer’s true warranty was scheduled to expire. Mailings used urgent language that included bold-faced writing proclaiming ‘IMPORTANT SAFETY RECALL INFORMATION’ or ‘Final Notice - Expiring Auto Warranty.’ Consumers also complained that they received automated telephone calls and other harassing telemarketing calls from NAWS and NDW. For example, NAWS made over 120,000 telephone calls to Minnesota residents using automated announcing-dialing devices.

The Attorney General’s Office obtained court-approved Assurances requiring NAWS and/or NDW to:

* Stop representing in any solicitation that a consumer’s vehicle may be unsafe, may be subject to a recall, or otherwise cause a likelihood of confusion or of misunderstanding that NAWS has information regarding the safety/operation/recall of a consumer’s vehicle;
* Stop identifying a consumer’s vehicle’s make and/or model in a written solicitation in a way that causes a likelihood of confusion or of misunderstanding as to connection between them, and the vehicle’s manufacturer;
* Include an affirmative statement in every written solicitation that they are not affiliated with an automobile manufacturer or dealer;
* Inform consumers that they merely sell motor vehicle service contracts on behalf of a third party who will actually be responsible for administering the service contracts;
* Stop using automated dialing-announcing devices unless such calls meet the narrow statutory exceptions articulated in Minnesota law;
* Stop engaging in fraud, false pretense, false promise, misrepresentation, deceptive practice in connection with the offer for sale or sale of motor vehicle service contracts in Minnesota; and
* Record every written complaint each organization receives from Minnesota residents and provide a copy of these records to the Attorney General’s Office.

The Minnesota Attorney General’s Office has produced bulletins entitled Motor Vehicle Service Contracts and Buying a Car -- Optional Products, which provide information to assist citizens to become informed buyers. In addition, the Attorney General provides these specific tips to citizens for dealing with motor vehicle service contracts:

* Do not rely on solicitation notices that state that your auto warranty has expired or is about to expire. In most situations, the company that sent the notice has no idea when your warranty is scheduled to expire. Check your own records to determine when your warranty will expire.
* Do not assume that the warranty solicitation notice you received came from your automobile manufacturer or dealer. Some companies that sell motor vehicle service contracts impersonate manufactures and dealers, or otherwise imply they are affiliated, when in fact such companies generally are not affiliated with your manufacturer or dealer.
* Review the contract before you buy. Few service contracts cover all repairs. Determine what repairs are covered, the amount of the deductible, if any, and the process for filing a claim. Some motor vehicle service contracts require you to obtain prior authorization from the contract provider before the repair is made. If you fail to call, your repair may not be covered.
* Determine what company administers the motor vehicle service contract. In most situations, a motor vehicle service contract broker sells you a contract that is administered by a separate contract administrator. As such, all claims are made with the administrator, not the broker. Find our what company is the administrator and research the company to determine if is a company you are comfortable entering into a contract with.
* Before you purchase any motor vehicle service contract, call the Minnesota Department of Commerce at 1-800-657-3602 or (651) 296-2488 to confirm that the service contract has been filed with the Department of Commerce and that there is an insurance policy backing up the obligations in the event the service contract provider fails to pay a claim or becomes insolvent. No motor vehicle service contact may be issued, sold, or offered for sale in Minnesota unless the provider of the service contact is insured under an insurance policy that backs up the obligation under the insurance contract. The insurance policy must be issued by an insurance company authorized to do business in Minnesota. The service contract and the insurance policy must be filed with the Minnesota Department of Commerce.

Consumers who wish to file a complaint or have questions about consumer protection may contact the Minnesota Attorney General’s Office by calling 1-800-657-3787 or 651-296-3353. Consumers may also download a Complaint Form by clicking here and returning the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.