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Texas Attorney General Charges California Telemarketer With “Do Not Call Law” Violations

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Credexx Corp. cited for robo-calls, fake extended auto warranties

 

AUSTIN – Texas Attorney General Greg Abbott today charged a California-based telemarketing firm and its owner with unlawfully selling fraudulent automobile vehicle warranties and violating state and federal “do not call” laws. 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 with 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.

 

In a direct mail solicitation obtained by the State, the defendants claimed that their service would provide vehicle owners “peace of mind” and coverage “up to 250,000 miles.” However, Credexx’s mailers failed to disclose that any claim paid under the contracts for repair could not exceed the cash value of the vehicle. This type of disclosure is important because used vehicle owners purchase the coverage to extend the vehicle’s economic viability by ensuring that repairs are made at a reasonable, affordable cost. 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. 

According to the State’s enforcement action, the defendants employed unlawful and fraudulent sales tactics to sell their products. For example, the defendants’ sales personnel assured purchasers that their contract could be readily cancelled – and that cancelled contracts would be granted quick refunds. However, State investigators revealed that the defendants’ customers found it was extremely difficult, if not impossible, to actually obtain refunds. 

Court documents filed 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. 

Texans who believe telemarketers are violating the Texas No Call law are encouraged to call the Office of the Attorney General’s toll-free complaint line at (800) 252-8011 or file a complaint online at www.texasattorneygeneral.gov.

 


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Nelson Propane

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