"We are investigating whether the company is violating Iowa's Consumer Fraud Act, and we are encouraging Iowans to contact us if they have complaints," Miller said. Warranty USA, of Las Vegas and Seattle, already is making refunds to some Iowans, he said. The Securities Bureau of the Iowa Insurance Division is working with Miller's office in the matter.

Miller said Warranty USA is sending post cards that some Iowans take to be official notices about their manufacturer's auto warranty or even a safety recall. The cards include the year and make of car and vehicle identification number. Card recipients are advised to "call at your earliest convenience concerning your vehicle."

"The card itself is misleading to some, but it is just the start of several practices by Warranty USA that we consider to be questionable and possibly illegal," Miller said. "When people make the phone call, they are subjected to a classic, hard-sell telemarketing pitch urging them to buy the company's extended warranty auto service contract. Then the problems begin," he said.

Miller listed several concerns his office is investigating:

• Questionable representations by the telemarketers, such as misrepresenting the coverage offered by the service plan and terms for cancellation and refunds.

• Unauthorized charges to consumers. Some were signed up even though they declined or did not believe they were accepting the offer. Others were charged for completely unrelated products, such as health insurance billed automatically to consumers' accounts. "We are concerned that the company may be deceiving some older Iowans, because this kind of charge sometimes was only noticed by adult children helping aging parents," Miller said.



• Problems with the service plan. "Consumers tell us the plan is portrayed as 'bumper-to-bumper,' but in reality it is full of exclusions and may be virtually useless," Miller said. Consumers have had difficulty reaching the company, obtaining refunds if they tried to cancel, and receiving payment for repairs.

• Questionable credit card practices. "We believe Warranty USA telemarketers may be obtaining people's credit card, debit card, or checking account numbers by making misrepresentations early in the phone call," Miller said -- for example, by telling people they needed the account information for "verification" purposes. Iowans also have complained that deductions were made from their checking accounts without authorization after they gave checking account information to Warranty USA telemarketers.

Miller said Warranty USA has made 37 refunds so far to Iowans ranging from about $95 to $1300 and totaling $17,135.62. If Iowans paid the entire warranty cost "up front," the cost could range up to about $1500. Other consumers made initial payments ranging from $250-300, and then made monthly payments of about $50-60 per month. The charge for the health insurance usually was about $95 per year.

Miller said his office has received about 150 consumer contacts about Warranty USA, including complaints and many tips from Iowans who provided the post cards which they considered misleading after they made the call to Warranty USA.

Miller said his office's Consumer Protection Division is seeking an Iowa customer list from Warranty USA. He also encouraged Iowans to contact his office if they have complaints. The phone number is 515-281-5926. Iowans also can find complaint forms and information online at www.IowaAttorneyGeneral.org (click on "Protecting Consumers.")

"This is under investigation," Miller said. "Meanwhile, consumers should feel free to discard the Warranty USA post cards and should be careful about the company's sales tactics."

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