Horizons April 2009

HORIZONS e-NEWSLETTER
Volume 2, Number 3
Member Issue

Latest update of news and items of importance to members of the Automotive Warranty & Service Contract Association (AWSCA).

ATTORNEY GENERAL MULTISTATE UPDATE!!

The Attorney General multistate investigation of our industry is expanding and moving forward.

The following states have recently joined the multistate investigation: FL, TX, NY, MA, MO and MN. California is also considering joining the group. The leader (Assistant Attorney General from WA state), indicated that they may seek a relatively uniform consent judgment for all parties of the same sector (e.g. Marketers). The multistate group recently identified (but did not announce) a second group of marketers to investigate. The group is also now looking at requiring the administrators and finance companies to enter into some type of agreement that would dictate how those entities conduct adequate due diligence on the marketers’ conduct.

The multistate group is looking at the following industry practice issues which impact all sectors: (1) disclosures to customers, (2) marketing practices, (3) refund procedures, (4) misrepresentation to customers of product purchased, etc.

AWSCA is considering creating a task force of finance companies and administrators to get ahead of the enforcement action by drafting a Code of Conduct and Standards of Operation for these two sectors. The Association hopes that its meaningful self-regulation tool could be the basis of an agreement with the multistate. Under this agreement, AWSCA certification would be the “gold standard” that regulators will look to in identifying companies who fully comply with the law.

The following items are still “on the table”:

  • Use of the terms “warranty,” “factory warranty” or “extended warranty.”
  • Affirmatively disclose that you are not affiliated with a dealer, the manufacturer or the warranty administrator and that you are not selling an extended motor vehicle warranty.
  • Disclosing all material terms in solicitations and during marketing contacts with consumers.
  • Obtaining driver/vehicle information directly/indirectly from state motor vehicle departments.
  • Offering the consumer a right to review the service contract before they buy it and at least 10 days to cancel without any penalty after receiving the written contract.

If you have any direct or specific input to the investigation, please contact Helen MacMurray, the AWSCA attorney as soon as possible.

LETTER TO MEMBERS:

At the request of several members, we have developed a draft update Letter to Members which outlines what your organization has been doing for the past few months and with your dues dollars. We are frustrated that we can not do more to help our industry – and especially those companies who are operating completely legally and ethically. The letter is attached. Please review the letter and provide us your feedback.

AWSCA TRAINING

Certified Audit Training took place on Thursday, March 5, 2009. We thank all who participated. They learned about current Marketing Laws, Legal requirements including UDAP, Fax laws, registration statutes, Do-Not- Call requirements, Privacy Policies, required Disclosures, Outbound Telemarketing and much more.

Annual Membership Meeting

Tentative plans are to hold the AWSCA annual membership meeting in September in conjunction with VSCAC in Orlando. Watch this newsletter to get more information as it becomes available.

Best Practices for AWSCA

Distribution of the AWSCA CODE OF CONDUCT, formerly Best Practices for Marketers, is still being delayed as is implementation of the AWSCA Certification Program. More information will follow as the Multistate continues its work.

AWSCA Membership

 Please take this opportunity to encourage your colleague and business associates to join AWSCA. They’ll want to be dues paying members so they can include their opinions at one or more of the quarterly membership meeting committees and vote for recommendations to the Board. Equally important, ONLY MEMBERS will be receiving news and important updates. So, please join very soon so no one misses out.

Regulatory News

On March 31st, the first "Do Not Mail" resolution was passed by the San Francisco Board of Supervisors, which calls upon California to create a Do Not Mail Registry similar to the National and State Do Not Call lists. It passed 9-2.

The FTC and four state Attorneys General have sued Dish Network for multiple alleged violations of the Do Not Call list. The satellite TV firm is facing civil penalties and possible injunctions in connection with their purported violation of the Telemarketing Sales Rule by assisting and supporting in the telemarketing of their services by their authorized dealers. The FTC also entered into a $2.31 million settlement with DirecTV for Do Not Call violations by failing to conduct due diligence on the marketers they hired to make their calls.

Outbound calling is prohibited in Alabama, Louisiana, Mississippi, Rhode Island and Utah on Monday, May 25, 2009 in observance of Memorial Day. Information Courtesy DNC.com

Other items

If you have any suggestions for newsletter items or any other recommendation, please send me an e-mail at any time. I'll appreciate it.
Larry Hecker, Executive Director, AWSCA, Phone: 302 524 1150, e-mail: larry@vpanet.org