Minnesota Attorney General Lori Swanson is suing a Texas auto warranty company, alleging it uses deceptive tactics to avoid giving customers refunds.
According to the lawsuit filed in Hennepin County District Court, Enterprise Financial Group Inc. of Irving, Texas, has sold more than 3,700 extended auto warranties to Minnesota customers since 2009. The warranties, also called service contracts, typically cost between $1,600 and $2,600.
Swanson contends in the lawsuit that the company is violating its promise of a full refund within 30 days.
EFG tells people they can cancel the contracts within 30 days of purchase for a full refund if no claims have been paid. However, the company makes it difficult for people to cancel with confusing instructions and giving customers the “runaround” if they try to cancel, the lawsuit said.
Refunds are late or never come, and sometimes don’t include the extra penalty payment Minnesota requires if a refund takes more than 45 days, the lawsuit alleges. In one case, a 78-year-old Minnesota woman trying to get her refund was transferred to about a dozen people on the telephone, some of whom hung up on her, Swanson’s office said.
The lawsuit is part of a broader investigation into extended auto warranty practices, Swanson said. The state is seeking unspecified civil penalties, and restitution for affected customers.
EFG did not immediately return a phone message from The Associated Press seeking comment.
In an interview with the Star Tribune Swanson said she thinks the improving economy is creating an opening for bad sales practices.
“These companies really seem to be on the uptick here,” she said.
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