April 29, 2010 – Attorney General Steve Six announced today that his office filed lawsuits against a pair of extended auto warranty companies, alleging an array of deceptive advertising, marketing, and sales practices used to mislead consumers into purchasing motor vehicle service contracts. The filings allege US Fidelis, formerly National Auto Warranty Service, of St. Louis, MO, and Credexx Corporation of Irvine, CA made false and misleading statements in connection with the sale of extended auto warranty plans in violation of several Kansas statutes, including state and federal no-call laws.
Kansas joins several other states in suing US Fidelis and Credexx. According to the lawsuits, the companies represented to consumers they were selling extended warranties to cover “just about anything mechanical that can go wrong,” when in fact they offered and sold service contracts covering only certain repairs. The suits also allege the companies falsely represented themselves as offering products on behalf of the manufacturer of the consumer’s vehicle and falsely indicated the consumer’s existing warranty was about to expire.
“Every time a company tricks consumers into purchasing a phony product, it sheds a negative light on the business community,” said AG Six. “The Attorney General’s office is committed to protecting consumers and giving Kansans confidence in knowing they are dealing only with reputable firms. If you’re breaking the law in the name of making the sale, we will come after you.”
The Attorney General’s Office is also alleging US Fidelis and Credexx violated the Kansas No Call act with aggressive telemarketing techniques and robo-calling. In addition, the US Fidelis suit alleges US Fidelis instructed consumers to “push 8 to be removed from our lists” but would instead simply disconnect the call.
“Violations of our No Call act demonstrate how important it is to strengthen this law,” said AG Six. “That is why my office introduced the Robo-Call Privacy Act this year to establish a comprehensive restriction on robo-calls in Kansas, including both commercial and political calls. Unfortunately, the Legislature has failed to act on this much needed bill.”
The Attorney General’s Office is asking for restitution for all Kansas consumers, investigative fees and over $75,000.00 in civil penalties for violations of the Kansas Consumer Protection Act. The cases were filed in Shawnee County District Court. As many as nine states filed lawsuits today, and more states are expected to file in the near future.
Attorney General Steve Six has committed himself to making the Consumer Protection Division in the Kansas Attorney General’s Office one of the best in the nation. This Division investigates scams, mediates and prosecutes violations of the Consumer Protection Act, the Restraint of Trade Act, Kansas Charitable Organization and Solicitations Act, the Funeral and Cemetery Merchandise Agreements Act and the Kansas Cemetery Corporation Act.
Last year, the Consumer Protection Division saved or recovered $8 million on behalf of Kansas consumers.