Texas Attorney General Charges California Telemarketer with Selling Fraudulent Auto Warranty Coverage

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According to FortBendNow.com, the Texas Attorney General has charged a telemarketing company based in California and its owner with selling fraudulent auto vehicle warranties.

Investigators with the office of the Texas Attorney General allege the company made thousands of unsolicited phone calls to residents in Texas to market its vehicle coverage services. They also allege the company’s marketing plan relied upon deceptive direct mail solicitations that did not disclose details about certain exclusions and limitations in their service contracts. In addition, while the company claimed they offered extended vehicle warranties, the warranties were actually expensive vehicle service contracts. The company claimed their service would give vehicle owners coverage up to 250,000 miles. However, the company did not disclose that any claim that was paid under a service contract could not surpass the vehicle’s cash value. According to the Texas Attorney General’s office, it is important for companies to disclose this information since used vehicle owners buy the warranty coverage to increase the viability of the vehicle by making sure repairs are made at costs that are reasonable and affordable. Without this type of disclosure, necessary information is not given to vehicle owners to help them conclude whether it is worthwhile to invest in a vehicle service contract.

The Texas Attorney General’s office alleges that the company utilized sale tactics that were unlawful and fraudulent to sell their product. For example, consumers were assured that a contract could be cancelled readily, and that quick refunds would be granted. However, investigators found that it was enormously difficult to obtain a refund, if not impossible. The company has been charged with violating the Texas Deceptive Trade Practices Act, in addition to other charges, and is seeking penalties of $20,000 per violation, as well as attorneys’ fees.

If a consumer believes they have been the victim of unfair or deceptive business practices, contact a California deceptive business practices lawyer to have their rights properly restored. Since 1987, Howard D. Silver has exclusively focused on protecting consumers from vehicle fraud, lemon cars, and other forms of unfair business practices. Call (855) 341-2611 to learn how Mr. Silver can help you.