Texas AG Charges California Telemarketer With ‘Do Not Call’ Violations

April 12, 2011

A California-based telemarketing firm and its owner were charged with unlawfully selling fraudulent automobile vehicle warranties and violating state and federal “do not call” laws, according to Texas Attorney General Greg Abbott.

The state’s enforcement action charges Credexx Corp. – which also does business as Auto One Warranty – and its owner, David J. Tabb, with illegally contacting Texans whose telephone numbers are on the national Do Not Call Registry or the Texas No Call List.

According to investigators within the Texas Attorney General’s Office, the defendants marketed their automobile coverage services by making thousands of unsolicited calls to Texas residents. The defendants’ marketing scheme also relied upon fraudulent direct mail solicitations that failed to disclose material details about the limitations and exclusions of their service contracts. Further, although the defendants claimed they were selling extended vehicle warranties, those purported warranties were actually nothing more than costly vehicle service contracts.

According to the state, the defendants claimed their service would provide vehicle owners “peace of mind” and coverage “up to 250,000 miles.” However, Credexx’s mailers failed to disclose any claim paid under the contracts for repair could not exceed the cash value of the vehicle. Without the disclosure, vehicle owners are not given the necessary information to help them determine if investing in the vehicle service contract is worthwhile to them.

Documents filed in federal court by the Attorney General charge the defendants with multiple violations of the Telephone Consumer Protection Act and the Texas Telemarketing Disclosure and Privacy Act. The state also charged the defendants with violating the Texas Deceptive Trade Practices Act and is seeking penalties of up to $20,000 per violation of this law, plus attorneys’ fees.

Source: Texas Attorney General’s Office

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