Task force sets goals for extended auto warranty industry
St. Louis, MO – A task force set up by Attorney General Chris Koster has released the changes it wants to make for the way auto service contracts are marketed.
The task force wants to require companies to allow customers to examine the warranty contracts for several days before signing. It also wants to limit the ways companies can sell the products.
Koster sued many of the companies offering the contracts over sales tactics that would be changed by the recommendations. He said the recommendations are designed to let the players know the new rules and avoid future suits.
"What we're trying to do here is actually put this industry on a good path, if that can be done," Koster said.
The new regulations have the support of a group representing the companies that sell the service contracts. The Vehicle Protection Association sprang up after the lawsuits to help the industry survive, said its legal counsel, Helen MacMurray.
"We adopted standards last year that already covered most of this, so really lot of what you're hearing about in terms of the bad business practices are ones that occurred one, two years ago," she said. "And really the industry has moved a lot, and we support these laws that would then make even our non-members comply."
MacMurray said some members of the industry are still concerned about some specific language in the guidelines.
The recommendations will still need legislative approval and do not have regulatory force.