Minnesota AG files lawsuit in car warranty 'vehicle alert' mailings

- The Minnesota attorney general is suing a Missouri-based company that sold service contracts to consumers after sending postcards suggesting their cars needed repairs or their warranty was about to expire.

The lawsuit filed by Attorney General Lori Swanson says United Auto Defense, LLC (UAD) UAD sold service contracts costing between $2,500 and $4,750 to people whose vehicles were already covered under a warranty even though its contracts excluded coverage for repairs covered by a manufacturer’s warranty.

The postcards looked like they were from manufacturer or dealership and included the vehicle’s make and year. The company was not affiliated with any dealer or manufacturer.

One of the mailings was labeled “Technical Service Bulletin” and said:

“Technical Service Bulletins…are recommended procedures for repairing vehicles.  Not to be confused with a recall, a TSB is issued by vehicle manufacturers and authorized repair facilities when there are several occurrences of an unanticipated problem.”  The mailing asked people to call before an “inspection cutoff date.”  Another mailing, called a “Vehicle Alert Notice,” was marked “VERY URGENT AND TIME SENSITIVE” and sent “to inform you that the factory warranty on your [name of car] has expired or is about to expire.”

When people called the phone number on the postcard, the lawsuit says UAD falsely told some callers their existing warranty had expired and told others UAD’s warranty covered “everything” on the vehicle. The actual contracts contained a long list of exclusions, including for repairs attributed to “normal wear and tear.”  It falsely told one caller that “we’re the preferred broker that handles the long-term service contracts for your manufacturer” and told another that the contract would cover a vehicle with a salvage title, even though the service contract excluded coverage for salvage vehicles.

The lawsuit seeks injunctive relief, civil penalties and restitution.

People may report complaints about similar situations to the Minnesota Attorney General’s Office by calling (651) 296-3353 or (800) 657-3787. People may also download a Complaint Form by clicking here, and mailing the completed form to the Attorney General’s Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.
 


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