Ariz. AG Settles with Phoenix-Based Used Car Service Company

February 27, 2006

Arizona Attorney General Terry Goddard reported a $170,000 settlement with Auto Connection and its owner Gail Oleaga.

The Phoenix-based business sold extended service agreements for used cars to consumers. Auto Connection advertised and sold automobile service agreements over the Internet, acting as an agent for warranty companies responsible for paying automobile repair
claims filed by consumers.

Between 1998 and 2004, Auto Connection reportedly failed to forward hundreds of service agreements or the money paid by consumers for the agreements. As a result, many consumers were denied claims.

In most of these cases, consumers reportedly had to pay for automobile repairs out of their own pockets, despite having paid Auto Connection for a service agreement to cover such expenses.

The settlement agreement includes the following provisions:

* Oleaga must pay restitution in the amount of $120,000 to consumers who filed complaints with the Attorney General’s Office or the Better Business Bureau of Central/Northern Arizona before Nov. 22, 2005.
* Oleaga must refrain from selling any type of automobile warranty or insurance product for a period of six years.
* Oleaga must reimburse the Attorney General’s Office for the costs of its investigation in the amount of $50,000.

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