Mepco / First National Warranty / Consumer Direct Warranty Services, Sold a Car Warranty, collect almost all payments, cancelled agreement, refused to refund Carol Stream, Illinois / Fort Lauderdale, Florida / Redding, California

CDWS Responded via the BBB:

On April 14, 2009, the business provided the following information:
Thank you for your letter dated on 04/07/2009, regarding Ms. XXX and for giving Consumer Direct Warranty Services (CDWS) the opportunity to respond to this matter.

Again, CDWS is the administrator, not the sales center, of the Great Choice product warranty. CDWS genuinely apologizes for the inconvenience that Ms. XXX has experienced during the purchase and cancellation of this product warranty.

The Great Choice product warranty that Ms. XXX purchased through North American Warranty Solutions did not provide the payment to CDWS for Ms. XXX product agreement. Every attempt was made to collect the monies that were owed to CDWS, unfortunately this was unsuccessful.

The only information that CDWS has regarding the seller is the address we provided on the last response.

North American Warranty Solutions
1847 Banks Road
Pompano Beach, FL 33063

Again, CDWS apologizes to Ms. XXX and appreciates the opportunity to explain this matter.

Thank you.

I SELECTED THAT I DID NOT ACCEPT THE RESPONSE, AND WROTE THE FOLLOWING REPLY:

I have forwarded this matter to the state Attorney General. It makes no sense whatsoever that CDWS would acknowledge my account and "cancel" my policy if they never received my payment of $2200. How could I be a customer if I never paid?

Also, I heard NOTHING from the company that there was an issue until 6 months after the purchase. What proof can they provide that they tried to collect the money? That they didn't just abscond with the funds?

I have researched this issue at length and found that the same complaints against CDWS exist for multiple direct sellers of their products. Since customers cannot purchase warranties from CDWS directly, we MUST go through a direct seller/broker. CDWS appears to make no attempt to maintain a list of approved brokers/sellers of their products to the general public.

Also, based on my research, these direct sellers purchase the warranties from CDWS up front and then resell them at a considerable mark-up. If that is the case, CDWS already made their money when they sold NAWS the package in the first place. They may not have been able to collect an additional mark-up fee, or whatever other arrangement they had with the seller. But this makes more sense then the story that MANY of us are currently getting with these cancellation notices, which is that they were not "paid".

CDWS practices have cost consumers tens of thousands of dollars, and customers are still posting complaint after complaint on being ripped off by sellers supposedly authorized to sell their products. Their high rating with the BBB also misleads individuals into believing that they can trust that their warranty will be serviced.

This experience has made me believe that no direct sellers of CDWS can be trusted. Its not as if I purchased a fake Prada bag. CDWS acknowledged working with the direct seller by recognizing me as a customer. They had a relationship that apparently went sour, and now have left their customers holding the bag.

All of these fly-by-night establishments clearly work with CDWS, and at one time authorized to sell their products. Again, this has to be the case, because otherwise CDWS would have had no knowledge of my account.

CDWS selling practices put customers at risk. Unless they change their ways, more consumers are at risk when purchasing their warranty products. I will do everything in my power to tell everyone I know that sellers of this companies products cannot be trusted, and they are taking a HUGE risk if they purchase anything from a seller of these warranties.

I would hope that the BBB takes a good, hard look at this company and the way it deals with the public and it's customers. This issue will not go away with my complaint. I have seen 3 new companies in Florida crop up in the last few months, all selling products for CDWS. As I have monitored this situation over the last 2 months, I have seen at least one of those companies BBB rating drop from a C to an F. It is now, apparently, out of business.

It appears that these sellers take peoples money, go out of business, set up shop under a new name. I believe that while CDWS can no longer collect money from "North American Warranty Solutions", there is another company in Florida that has started up, selling these products, and the same people are in charge. They allow changes in the names of these brokers to collect money, violate FCC regulations and other state regulations, and sell their products without any sense of liability or responsibility.

I urge the BBB to continue to monitor this company and it's practices. These sellers fail to comply with the Do-Not-Call registry, they sell products that CDWS then refuses to service, and they go in and out of business in the blink of an eye. All roads, however, lead back to CDWS, who have subcontracted their selling, allowing customer after customer to be duped while CDWS tries to remain at arms length, consistently blaming the "sellers" of their products for their repeated failure to provide the service as sold, if not cancelling the contract outright.

from website 800notes - you can check those phone numbers you do not recognize on this site

This is one of 16 telemarketing scams listed under articles

One of the hottest' scams in the telemarketing industry these days involves companies that sell Auto-Warranties. It's usually a robo-call. The recording starts with: This is your final notice! The warranty on your car is about to expire Of course, the caller has no idea whether you even have a car, not to mention its warranty. After the recording is played you are connected to a live operator who often refuses to send anything in the mail until you make your first payment. The experienced salesman will use high-pressure tactics rushing you into making a payment.
Victims, who fell for the scam and extended their warranties report that the companies often fail to send any paperwork and routinely deny policy payments.

Tracing the calls to the companies is difficult. The calls often come from telemarketing centers located overseas. Also, the companies often spoof their caller ID information to display someone's else's real number. When people receive these calls they dial the number they see on Caller ID and leave angry messages for an unsuspecting victim. Two-three days later the telemarketers change the Caller ID number and the scam continues.

IF YOU ARE READING THIS, AND HAVE AN ISSUE WITH CDWS OR ONE OF IT'S STOREFRONT DIRECT SELLERS/BROKERS, PLEASE FILE A COMPLAINT WITH THE BB AND WITH THE ATTORNEY GENERAL. THE ONLY WAY TO PROTECT MORE CUSTOMERS IS TO FLOOD THESE AGENCIES WITH CONCERNS. IT APPEARS THAT THE BBB IN PARTICULAR HAS NO COMPELLING TO PROVIDE CUSTOMERS WITH CURRENT INFORMATION ON LOUSY COMPANIES, UNLESS WE MAKE IT TOO PAINFUL FOR THEM TO CONTINUE TO OFFER OUT-DATED, MISLEADING, OR FALSE INFORMATION TO THE PUBLIC.

THE FACT THAT THE STATE ATTORNEY GENERALS RECOMMEND USING THE BBB TO CHECK OUT BUSINESSES MAKES THIS ISSUE ALL THE MORE CONCERNING. ALL COMPLAINTS CAN BE FILED VIA THE WEB, EVEN WITH THE ATTORNEY GENERAL. DON'T DELAY - COMPLAIN TO EVERYONE YOU CAN TO STOP THESE PRACTICES AND TO PREVENT THIS FROM EVER HAPPENING TO ANOTHER CONSUMER.

REGARDING MY CASE:
I have contacted the state attorney general offices in both FL (home of North American Warranty Solutions) and CA regarding CDWS. Though the BBB in FL did nothing but close my account (they didn't even note on their website that the company was out of business - I will probably harass them about this), the I have been diligent about following up with the CA BBB, though I would rate their performance at maybe a C.

I updated my complaint on 3/30/2009 when I found more information, like this original complaint. My original complaint was filed on 3/23, and there was a statement from the BBB that the company had until 4/7 to reply. When I checked on the status yesterday afternoon (4/6), the comments I added on 3/30 were missing, and the status stated the company had until 4/2 to respond. When I tried to call the BBB, no one answered the phone, and there was no recorded message. I promptly emailed the BBB about my concerns with the conflicting and now missing information related to my complaint.

This morning, when I checked the concern, the notes were restored, only with yesterday's date associated with them rather than the 3/30 date. I also noticed one additional complaint was filed against the company. The company now has until 4/17 to respond, according to the most recent update.

After reading about the concerning fashion in which the BBB works with companies, "resolves" complaints, and often fails to contact customers with resolutions, I got concerned. After reading the resolutions more carefully, I noticed that on several occassions, it stated that the company was will to settle or engage in arbitration, but the consumer didn't respond or rejected the offer. I am getting more concerned that the Attorney General's recommendation to consumers to check out businesses with the BBB is bad advice. I did my homework, checked out the businesses, and I was scammed - big time.

I guess the only thing to do is to FLOOD these agencies with complaints.

Maybe what it takes is getting on the news:

http://www.wsoctv.com/money/16980563/detail.html

The same thing has happened to me. It apparently has been happening to many customers. The direct seller in my case was North American Warranty Solutions, and my extended warranty on my Honda was about to expire when I was contacted. NAWS has shut their doors, and tried to cut off all of their valid phone numbers, though there were some that were still active a few weeks when I tried to follow-up with them directly on the issue. It appears they have simply changed their name.

It appears that Consumer Direct Warranty Services is at the heart of the issue, even though they claim they have no responsibility to their customers since they are not "direct sellers" to the public.

I have filed a claim with the BBB in California and Florida. The Florida BBB closed my account after they couldn't get a hold of NAWS. Oddly, they still left them up on their website as an active company with an "ACCEPTABLE" rating even after I followed up with them on the issue.