Minnesota Attorney General Bans AutoAssure From Selling "Extended Warranties" in Minnesota
Settlement bars vehicle service contract firm for 4 years and requires restitution of $400,000
Posted by Tony Russell
December 16, 2019
Minnesota Attorney General Keith Ellison today announced that his office has obtained a settlement that bans AutoAssure, LLC, also known as Vehicle Services Department, from marketing in Minnesota for four years, and requires it to overhaul its sales practices if it ever does business in the state again after the ban expires. As part of the settlement, AutoAssure is also required to pay $400,000 to be used for refunds to around 1,000 Minnesota consumers who it solicited to purchase “motor vehicle service contracts,” often referred to as extended warranties.
In April 2018, the Attorney General’s Office filed suit against AutoAssure, alleging violations of state laws against consumer fraud, deceptive trade practices, deceptive sale of service contracts, and deceptive acts perpetrated against senior citizens related to the company’s marketing and sale of service contracts in Minnesota.
“My job is to help Minnesotans afford their lives. Protecting them from companies that sell them products they may not need and that don’t deliver on their promises is part of that job,” Attorney General Ellison said. “There’s no place for these sorts of deceptive sales practices in our state. Thanks to this settlement, this company won’t be taking advantage of Minnesotans anymore.”
AutoAssure is a Texas-based seller of motor vehicle service contracts, which provide limited repair coverage for vehicles after the expiration of the vehicle’s manufacturer warranty. AutoAssure sent mailings to Minnesotans that were designed to look like they were associated with an automobile manufacturer or dealer, indicated that a consumer’s manufacturer warranty “has expired” or was “about to expire,” and included urgent language designed to prompt Minnesotans to call AutoAssure for more information. When consumers called, AutoAssure further deceived them about who it was and misrepresented the quality and scope of the coverage it sold by telling them, for example, that their service contracts would “literally protect everything on your Ford.” In reality, the service contracts that AutoAssure sold contained up to 40 paragraphs of coverage exclusions, despite often costing thousands of dollars.
In April 2018, the Attorney General’s Office filed suit against AutoAssure, alleging violations of state laws against consumer fraud, deceptive trade practices, deceptive sale of service contracts, and deceptive acts perpetrated against senior citizens related to the company’s marketing and sale of service contracts in Minnesota. The lawsuit followed an investigation by the Attorney General’s office that began in 2014. On multiple occasions during the investigation, the office sought court intervention to force AutoAssure to produce relevant documents.
If you purchased a service contract from AutoAssure, you may be entitled to restitution or a refund under the settlement. The Attorney General’s Office will contact you about your options. In the meantime, if you have any questions about the settlement, you may contact Assistant Attorney General Collin Ballou at (651) 757-1474 or (800) 657-3787.
With the amount of motor vehicle service contract solicitations that Minnesotans receive on the rise, it is important that consumers be on the alert for scams. A mailing or phone call that claims a consumer’s warranty has expired or uses the make, model, and year of a consumer’s car is not necessarily from a vehicle dealership or manufacturer. It is important for consumers to be on the lookout for companies that pose as their car dealership or manufacturer, or promise better coverage than the service contracts that they are selling actually provide.
Additional information about service contracts, including about service contract scams, is available on the Attorney General’s website. Consumers who have questions or concerns about a motor vehicle service contract or wish to file a complaint about one are strongly encouraged to file a complaint online or contact the Attorney General’s Office.
A copy of the settlement can be found here.
A copy of the original lawsuit can be found here.
Read more at Office of Minnesota Attorney General Keith Ellison