Oregon Department of Justice

Attorney General Ellen F. Rosenblum

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Attorney General Closes Vehicle Warranty Company For Accepting Money & Not Providing Services

August 7, 2000

Attorney General Hardy Myers today announced that a Tigard vehicle warranty company marketing on the Internet is out-of-business after accepting money and not providing services. Named in an Assurance of Voluntary Compliance filed today in Washington County Circuit Court are GLS Development Corporation, which did business as GLS Warranty Company and its president, Terence Gunnari of Tigard.

"Consumers throughout Oregon and across the country paid an average premium of $800 to this company for automobile extended service contracts that did not cover their needs." Myers said. "Internet users should comparison shop standard retail insurance dealers before purchasing goods and services electronically."

The Oregon Department of Justice received 73 written complaints about GLS between March 1999 and July 2000, but Department investigators estimate the total number of victims to be 300. Additional law enforcement agencies are reviewing the GLS complaints.

Department of Justice investigators determined that the company collected fees for service contracts but failed to return payments after the warranty administrator severed its relationship with GLS. Gunnari instead elected to keep the money and issued "dummy" warranty certificates, in effect becoming his own warranty company. Problems developed when claims outpaced revenues.

GLS will provide restitution to any consumer who paid for services not received. Consumers who paid premiums and were not issued a valid contract, and who did not have a covered claim, or whose claims totaled less than the premium, will receive the paid premium less any claim actually paid. Consumers who have claims exceeding the premium will be paid the claim amounts under the same terms and conditions as if the protection had been issued.

GLS also agrees to pay the Oregon Department of Justice $5,000 for its Consumer Protection and Education Fund.

Companies selling extended warranties are required by law to register with the Department of Consumer and Business Services' Insurance Division and comply with stringent filing requirements. According to Insurance Division statistics, 108 such companies are currently registered. GLS was not registered. In fact, regulators from Oregon's Insurance Division revoked Gunnari's insurance agent's license in 1996 for failing to remit premiums to an insurance carrier.

Consumers checking licensure of a seller of extended warranties can call the Insurance Division at (503) 947-7980 or the Insurance Consumer Assistance toll-free line at 1-888-877-4894. Information is online at www.oregoninsurance.org. Consumers wanting information on consumer issues can call the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only), toll-free at 1-877-877-9392 or by writing Financial Fraud/Consumer Protection, 1162 Court Street, N.E., Salem, Oregon 97310. Information is online at www.doj.state.or.us.

Contact:

Jan Margosian, (503) 947-4333 (media line only) jan.margosian@doj.state.or.us |
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