The Federal Commerce Fee has filed a federal lawsuit towards a Florida-based car guarantee agency and associated firms, charging that the corporations’ telemarketers illegally mentioned they represented automobile producers and bilked customers out of greater than $6 million.
“AVP blasted customers with unlawful calls and made bogus claims about bumper-to-bumper warranties,” Samuel Levine, director of the FTC’s Bureau of Client Safety, mentioned in an announcement this week. “The reality is that the warranties didn’t come from the producer, didn’t cowl the repairs folks wanted, and weren’t offered legally. We’re holding AVP accountable.”
AVP and its house owners instantly counter-sued the FTC, searching for a declaration that the company had overreached and had primarily based its complaints on flawed data from a whistleblower who’s a convicted felon.
“AVP makes use of telemarketing to market and promote car service contracts administered by a 3rd occasion and backed by an insurer,” the guarantee firm’s complaint reads. “In different phrases, AVP sells an precise product—reputable prolonged auto warranties on which customers could—and in reality do—make claims for repairs which might be lined. There isn’t a doubt {that a} profit is conferred on customers.”
The FTC made its issues identified to AVP final 12 months, and the guarantee firm mentioned it revamped its insurance policies and procedures accordingly, then stopped all gross sales efforts in November. Firm leaders then employed a consulting agency, which retrained telemarketers in compliance with federal telemarketing legal guidelines.
Nonetheless, the FTC commissioners voted 4-0 to file the swimsuit within the U.S. District Court docket for the Southern District of Florida, arguing that firms proceed to violate the legislation. The transfer is an element of a bigger crackdown by the FTC on what it calls misleading commerce practices which have lured customers into paying for subscriptions, warranties and different companies.
The company seems to tug no punches in its criticism towards the auto guarantee corporations.
The lawsuit mentioned that Pompano Seashore-based AVP violated federal legislation by calling customers whose cellphone numbers are on the nationwide Do Not Name Registry. The telemarketers additionally falsely promised a full guarantee for lower than $3,400 and that customers might obtain a full refund inside 30 days in the event that they weren’t pleased with the guarantee plan. However the refunds are by no means despatched, the complaint mentioned.
The corporate additionally used remotely created checks to acquire cash from folks, which is taken into account an unlawful methodology of cost, the FTC mentioned. The fee is asking the court docket to challenge an order barring AVP from persevering with in its telemarketing practices.
The defendants named within the swimsuit, all primarily based in Florida, are: 1) American Automobile Safety Corp.; CG3 Options Inc., additionally d/b/a My Safety Plan Inc.; Tony Allen Gonzalez, individually and as an proprietor, officer, and/or supervisor of American Automobile Safety Corp., CG3 Options Inc., and Tony Gonzalez Consulting Group, Inc.; Tony Gonzalez Consulting Group, Inc., additionally d/b/a The Gonzalez Group; Charles Gonzales, individually and as an proprietor, officer, and/or supervisor of American Automobile Safety Inc. and CG3 Options Inc.; Daniel Kole, individually and as an proprietor, officer, and/or supervisor of American Automobile Safety Corp. and Kole Consulting Group, Inc.; and Kole Consulting Group, Inc.
Telemarketers pitching the prolonged warranties, also referred to as “mini insurance coverage insurance policies,” have change into infamous across the nation. AVP has been the topic of quite a few complaints filed with the FTC and with the Higher Enterprise Bureau, the FTC criticism notes. Two of the principals of the defendant firms, Tony Gonzalez and his brother, Charles, had beforehand been ordered by the Florida Workplace of Insurance coverage Regulation to stop working an unlawful auto guarantee enterprise, the lawsuit notes.
Tony Gonzalez and Daniel Kole couldn’t be reached for remark by the Insurance coverage Journal Thursday morning.
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