The VPA Voice
"Giving a Voice to Industry Members"
January 27, 2015
Notice to Members and Non-members…
To All Member and Non-Members: Unfortunately, it is necessary once again to send out a notice to members and non-members alike, warning of actions to be taken in 2015.
There has been an increase in the number of companies whose activities are not in compliance with state and federal laws. We are very concerned that this violative conduct threatens our members who are in compliance, and the industry as a whole. We have received information from various sources about non-compliant activity such as illegal dialing to cell phones, non-compliant mailers and the transfer of customer contracts from one administrator to another without the customer’s knowledge or consent. We have also become aware of companies who persist in allowing employees who do not have a Missouri license (i.e. screeners, customer service reps, etc.) to talk with customers on the phone, which appears to be a blatant disregard for compliance.
This message is to provide notice that we have started a number of investigations on various companies. We intend to pursue these investigations very aggressively. We further intend to take the necessary action to resolve these issues in whatever way we believe is best for our members and the industry as a whole. If you are a member, we will come to you first to discuss compliance issues, and attempt to resolve these as efficiently as possible. If you are a not a member, we will not hesitate to escalate the issue in the most appropriate way possible in order to protect our members and the industry as a whole.
We also want to remind you that there have been a number of investigations over the past year that have been addressed and successfully resolved, including the expulsion of some members. In some of those situations we were able to resolve it behind the scenes. For example, we received a complaint and then contacted the call center with the problem, and then provided the business partners with the information (administrators, payment providers, data fulfillment providers), who then worked together to resolve the issue.
In the past there has been a reluctance to publish potentially negative information, but starting this month, the Board of Directors has resolved to start publishing the results of the BPA Quality call monitoring program. In this way, everyone can see the companies who are participating and in compliance, as well as identify those companies who did not provide us with calls despite our requests. We anticipate there will be more of this type of reporting on other compliance issues throughout 2015 as well.
As we have said in the past, we encourage anyone who has information relating to a compliance issue to contact us. We always follow up on these situations and work to correct the compliance issue(s). There are legal reasons that may preclude the VPA from publishing the result.
As you may know, the VPA increased its access to Attorneys General nationwide through our membership in both the Republican and Democratic Attorneys General Associations. We have been attending each of these organization’s regular meetings, which gives us the opportunity to discuss the vehicle service contract industry directly with AGs. We are scheduled to attend the next National Association of Attorneys General conference in Washington D.C., coming up in February. Last year’s event featured U.S. Attorney General Eric Holder and CFPB Director Richard Cordray as keynote speakers.
Finally, we thank you again for your support and strongly encourage you to contact us if you know of any issues or concerns. While we recognize there is a lot of gossip and rumors throughout the industry, we are committed to following up on all substantive complaints until there is a successful resolution.
Minnesota Lawsuit Against EFG Dismissed
In September, we reported that the Minnesota Attorney General filed a lawsuit against Enterprise Financial Group, Inc. (EFG), alleging that some of the company’s distributors had not provided timely refunds to consumers who cancelled their vehicle service contracts. We’re pleased to report that this lawsuit has been settled and dismissed.
After the suit was filed, EFG conducted an internal audit and found that 96% of all consumer refunds were made within the 45-day period required by Minnesota law. As part of the dismissal, there was no finding of fault against EFG.
While we’re pleased to see this suit against EFG dismissed, it’s a great opportunity to emphasize again the importance of providing timely refunds and cancellations. This is an important issue within our industry, and failure to properly handle refunds and cancellations in a timely manner is one of the quickest ways to become a target for a law enforcement or regulatory agency.
Reliant Repair Protection Expelled from VPA
The VPA is committed to promoting regulatory transparency, education and accountability compliance in the marketing and servicing of vehicle service contracts. As such, the VPA conducted an investigation of Reliant Repair Protection for alleged violations of the VPA Standards of Conduct. Pursuant to the SOC’s, we asked for specific information on a number of consumer contracts, but Reliant failed to fully cooperate and provide the VPA with the information that was requested. Consequently, the Board voted to expel Reliant from membership in the VPA.
Call for New Members
Last year saw VPA membership at an all-time high and we’d like to continue that trend through 2015. Thank you for your continued interest in the Vehicle Protection Association. I’d like to take this opportunity to extend an invitation to any nonmembers to join our association.
Membership in the VPA says a lot about your business and its commitment to ethical, transparent practices in the automotive service contracts industry. Our primary goal is to ensure our members are doing right by consumers, so we work hard to provide you with the knowledge and resources necessary to make that possible. This includes timely updates on the latest regulatory requirements and developments in our industry.
Our member base includes service contract marketers, administrators, insurers, payment providers and software providers – all of whom are committed to the ethical delivery of quality, cost-effective vehicle protection programs.
If you’re interested in joining our organization, please fill out a membership application here. Please mail it to address below with a check for annual dues.
Vehicle Protection Association
PO Box 3491
St. Louis, MO 63139