Minnesota is suing a company called United Auto Defense (UAD) over what state Attorney General Lori Swanson says are deceptive business practices.
Swanson warned consumers that UAD is posing as a vehicle manufacturer to sell unnecessary and expensive service contracts.
The lawsuit claims UAD mails postcards that appear to be from a manufacturer or dealer falsely telling owners that their vehicle needs repairs or that its warranty is expiring, Swanson says. She says the company winds up selling service contracts that range in price from $2,500 to $4,750 to drivers whose vehicles are already covered by warranties.
The suit filed in Dakota County asks the court to order UAD to stop deceptive practices, repay victims, and pay a penalty.
The company's CEO, Gary Primm, told the Associated Press he was unaware of the lawsuit and declined further comment.
The Better Business Bureau has not given a rating to United Auto Defense in St. Charles, Missouri, saying it is evaluating a pattern of complaints against the company before giving it a rating.
But the Bureau gave a UAD office in Douglasville, Georgia, an F (the lowest rating) because of customer complaints and unsubstantiated advertising claims – including a claim that the company's administrators all had A+ ratings from the Better Business Bureau.