Warranty USA Consumer Alert
Update on Warranty USA - November 2002
Warranty USA and related companies recently sent a notice to consumers concerning the ongoing Chapter 11 bankruptcy case in the United States Bankruptcy Court of Nevada. The notice states that consumers have until November 11, 2002, to file claims arising from extended vehicle service contracts. The notice also includes a form on which to file the claim. Consumers are encouraged to file claims with the court if they believe that Warranty USA owes them money. The notice is available for download (237 kb PDF file) and the form is available for download (144 kb PDF file).
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The claim filings as part of the Bankruptcy Court notice are separate from the actions currently being pursued against Warranty USA by TDLR and the Office of the Attorney General. The Attorney Generals office has sued Warranty USA for violating Texas state law. TDLR will update consumers with any further actions related to this case. Consumers should not rely on the law suit filed by the Attorney General for recovery of funds from Warranty USA. All claims should be filed in the bankruptcy proceeding.
If you did not receive a claim form from Warranty USA, please contact TDLR at email@example.com, 800-803-9202, or 512-463-6599.
The Texas Department of Licensing and Regulation is warning consumers in Texas that Warranty USA, Inc., a service contract provider covering automobiles, is not licensed to offer contracts in the state of Texas. The company was placed in federal receivership on December 20, 2001. Consumers are encouraged not to enter into any warranty or coverage agreements with Warranty USA until these matters are resolved.
Consumers who purchased service contracts from Warranty USA or its affiliates and wish to file a complaint are encouraged to do so electronically by using our online Warranty USA complaint form or by calling 800-252-8026 or 512-936-6891. Contracts offered by Warranty USA may be administered by Independent Warranty Management Corporation, Cambridge Risk Management, or Warranty and Financial Products. These contracts may be guaranteed by Dealers Assurance Company, Heritage Warranty Mutual Insurance Risk Retention Group, or other insurers.
State law requires service contract providers to be licensed as of January 1, 2000. In September 2001, TDLR received an incomplete application from Warranty USA. TDLR did not approve this application because Warranty USA failed to satisfy the required financial security requirements set by statute. TDLR pursued enforcement actions while Warranty USA continued to operate without a license. The federal receiver estimates that Warranty USA has outstanding obligations to approximately 47,000 Texans who paid on average $1,347.00 per contract. TDLR has been working with the Office of Attorney General and the Texas Department of Insurance to protect Texas consumers to the fullest extent possible.
Warranty USA complaint form
Frequently Asked Questions Concerning Warranty USA:
I tried to call Warranty USA, but I can't get through.
A federal court appointed a Receiver to take over the business on December 20, 2001. On March 6, 2002 Warranty USA filed Chapter 11 Bankruptcy (case number 02-12318-rcj in the US Bankruptcy Court for the District of Nevada). For more information about the bankruptcy (or to file a claim), you will need to contact the Bankruptcy Court or visit their website, www.nvb.uscourts.gov.
Although Warranty USA is in Bankruptcy, depending on the terms of your service contract and the date on which you purchased that service contract you may have recourse against parties other than Warranty USA. You may want to contact a private attorney to discuss your legal remedies.
How do I file a complaint, if I have a service contract?
You may report a complaint online at www.license.state.tx.us/warrantycomplaint/. To have a Warranty USA complaint form faxed to you through TDLR's "fax back" system call 512-477-2719 from your fax machine. Then follow the instructions and request document number 605. You may return the complaint form via fax at 512-475-2872 or via mail at TDLR, P.O. Box 12157, Austin, Texas 78711.
What other parties may be listed in my service contract?
Independent Warranty Management Corporation; Cambridge Risk Management; Dealers Assurance Company; Heritage Warranty Mutual Insurance; Risk Retention Group, Inc.; and Warranty and Financial Products, Inc. These parties may have acted as administrators or reinsurers for your service contract.
What did TDLR do to prevent Warranty USA from operating without a registration?
TDLR made a request to the Attorney General for a Temporary Restraining Order and Injunction against Warranty USA to force them to stop doing business in Texas. Before that request was completed, however, Warranty USA was placed in federal receivership in Washington state on December 21, 2001 and on March 6, 2002 filed Chapter 11 Bankruptcy in the US Bankruptcy Court for the District of Nevada.
The Attorney General's Office, in coordination with the Texas Department of Insurance and the Texas Department of Licensing and Regulation, is investigating potential complaints against Warranty USA, its affiliates, and other related companies. The Attorney General's Office, however, is prohibited by law from providing legal advice or representing individual consumers.
Can I get my money back?
Unfortunately, there is no guarantee that you will be able to get your money back. But under the law, you have several options for attempting to obtain a refund.
You may seek a refund through the bankruptcy court by filing a proof of claim (you can download a claim form at www.nvb.uscourts.gov). It is important to understand, however, that refunds from the bankruptcy court may not be available for many months, if at all.
Depending on the terms of your service contract and the date on which you purchased that service contract, you may be able to get a refund from a company other than Warranty USA or you may be able to get another company to honor your current warranty policy.
You may also want to contact a private attorney to discuss any other legal remedies you may have.
Can I get a refund from my credit card company?
If you paid for your warranty policy with a credit card (but not a debit card), you may have a right to what is commonly called a "charge-back" from the credit card company. The federal Fair Credit Billing Act establishes procedures that require creditors to correct mistakes quickly and resolve disputes between consumers and merchants. Your rights and an explanation of how to request a charge-back should be summarized on the back of your credit card statement. To obtain more information regarding ATM, Debit and Credit Cards, including "charge-backs" visit the Texas Attorney General's web site at http://www.oag.state.tx.us/consumer/brochure/credit.htm.
I already had my car repaired, how do I get reimbursed?
My car needs repairs, what should I do?
Depending on the terms of your service contract and the date on which you purchased that service contract, you may be able to get a reimbursement or obtain coverage from a company other than Warranty USA. For example, look at your policy to see if it lists an insurer or other business that will cover your claims. If it does, you may wish to contact that business to see if they will cover your warranty claim.
Also, you may seek reimbursement for covered repairs through the bankruptcy court by filing a proof of claim. You can download a claim form at www.nvb.uscourts.gov.
S. Houston, Texas
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