New Year, New Laws: Missouri Car Shoppers Have New Protections From Extended Service Contracts

Companies offering contracts must have a license and may not call the plans "warranties"

January 02, 2012|by Jonah Kaplan, KSPR News | jkaplan@kspr.com

Missouri car shoppers have new laws to protect them this new year.

The new rules protect consumers from fraudulent extended service contracts.

Missouri's Attorney General's Office shut down a company that sold extended service contracts, but denied every claim.

Companies offering extended service plans now have to get a license from the state, and you get the benefit of more transparency. In some cases, you can even get your money back.

When you buy a car, salesmen offer you these service contracts, or sometimes called warranties.

They can cover the cost of repair, replacement parts and regular maintenance.

Dealers and factories sell plans, but so do third parties who reach out with TV, radio or telemarketing.

Over the past few years, consumers filed hundreds of complaints of false advertising against such companies - and the attorney general sued 12 of them.

Attorney General Chris Koster brought his recommendations to the House and Senate, who unanimously voted them into law.

Senator Bob Dixon (R-Springfield) says the credit goes to citizen initiative.

"This was a direct result of people calling the Attorney General's Office," said Dixon. "They said, 'Something's not right here. These are deceptive practices and we thing something sould be done.' It's an example of things working the right way and corrective action being taken."

If you want an extended service contract, you're now entitiled to a free-look period. You can cancel the plan within 20 business days.

If you do that, you're entitled to a full refund, minus a fee of no more than $50.

Service companies must show you the full plan details before signing upon request.

Also new in 2012, no salesman can advertise the plan to you as a warranty, which by definition is already included in the product price. A service contract is in addition to a warranty.

For information on the new laws, visit http://insurance.mo.gov/consumers/vehicleservice

For helpful tips and FAQs on extended service contracts, visit http://consumeraffairs.com/news04/2005/extended_warranty.html

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