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Vehicle Protection Association Backs Legal Action Against Industry Fraudsters

Two former auto service contract sellers plead guilty in federal court.

ST. LOUIS – June 20, 2012 – The Vehicle Protection Association (VPA), a not-for-profit trade association promoting regulatory transparency, education and accountability for marketing and servicing automotive service contracts, today announced its support for the prosecution of industry fraudsters Cory Atkinson and Robert Dolan. Atkinson is the former co-owner of auto service contract vendor US Fidelis, and Dolan worked for Transcontinental Warranty. Both pleaded guilty to charges of fraud in unrelated federal cases over the past week.

Atkinson pleaded guilty to charges of fraud and lying on a tax return in U.S. district court Monday. This follows his plea of guilty on Thursday to state charges of fraud and theft. Dolan pleaded guilty on Friday in federal court to a similar charge. The Vehicle Protection Association fully supports the criminal prosecution of these individuals.

Among the acts that led to regulatory action were the use of deceptive sales pitches, giving false names and marketing to consumers through the use of robo calls. The Federal Communications Commission has since issued strict rules limiting the use of robodialing for marketing purposes.

The VPA has made significant efforts to increase transparency of the vehicle service contract industry since Atkinson and Dolan were served indictments for their separate charges.

“He decided to accept responsibility and thought it was in the best interest for himself and his family to resolve it,” Bill Margulis, attorney for Cory Atkinson, was quoted in the St. Louis Post-Dispatch as saying following his client’s Thursday plea.

Sentencing for Cory Atkinson is set for Sept. 28, and Dolan could receive up to 10 years in prison. Transcontinental President Christopher Cowart and Vice President Cris Sagnelli were sentenced to five years in prison on Oct. 31.

“The Vehicle Protection Association stands firmly behind the prosecution of any individuals and companies who intentionally deceive consumers with illegal marketing practices or otherwise profit from illegal activity,” said Chris Carenza, executive director of the VPA. “Consumers should be aware that an auto service contract is a valid purchase to help extend the life of a vehicle, and we encourage consumers to purchase contracts from certified sellers.”

The VPA urges consumers to be alert of fraudulent companies by looking for the following:

  • Robodialing, or telemarketing, in an effort to sell extended auto warranties
  • Promises to “extend” or “reinstate” a vehicle’s factory warranty
  • References to the sales team as “warranty specialists”
  • Suggestions that the company has pre-existing information about the consumer

Members of the VPA are required to abide by the VPA Standards of Conduct, an ethical code of conduct established to uphold the rights of consumers who purchase auto service contracts.

In accordance with the Refund Policies and Procedures code, all refund policies must be disclosed to consumers prior to the sale of any products and services. Members must also honor customer refund requests for a minimum of 30 days following the date of sale and maintain cash reserves sufficient to issue refunds to all customers entitled to a refund at any particular time.

Consumers can view a full list of VPA-certified vendors on the VPA website.

About the Vehicle Protection Association
The Vehicle Protection Association (VPA) is a not-for-profit trade association representing firms that are active in the automotive service contract industry. Members include service contract marketers, administrators, insurers, payment providers and software providers. VPA currently has more than 60 members. The organization is committed to ensuring regulatory compliance among members, educating consumers on their rights, and otherwise ensuring the integrity of the automotive service contract industry. For more information, visit www.vpainfo.org.

For more information:
Chris Carenza, Executive Director
Vehicle Protection Association (VPA)
Phone: (314) 667-5654
info@vpainfo.org

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