Complain about a product or service

1SourceAutoWarranty.com

7935 E. Prentice Ave. Suite 400, Greenwood Village, CO

Alethea of Wallingford PA (03/02/06)
I purchased a Diamond Term Vehicle Service Agreement on 9/13/05 which had a 24 month, 24,000 mile term for $2025. On 1/9/06, I received the Notice of  Liquidation Order. I never had a chance to use the policy and am wondering if I will be reimbursed?

Dale of Lacey WA (01/23/06)
I purchase the Diamond Plan extended auto warranty on a 2001 BMW 750il in May 2005. When I took the vehicle to the dealer for a couple of problems, I asked the service manager to call 1SourceAutoWarranty to determine if any failed parts were covered and obtain authorization. When contact was finally established with the company, the administrator was very unprofessional to the point of rudeness and denied any repairs most arbitrarily; however, he did justify denial of coverage for the failure of rear suspension components as I had indicated that I suspected front suspension component failure. My inability to properly diagnose the issue apparently provides grounds for denial.

PS: I just received a notice from the Insurance Commissioner of Hawaii who issued a Cease and Desist order against 1SourceAutoWarranty. I suppose the company owners will now take off with our premiums and go start some other scam.

I had no recourse but to pay a $2000.00 bill for repairs, most of which should have been covered according to the terms of the contract.

Craig of Grand Rapids MI (10/10/03):
I bought a 1997 Chevrolet Suburban via Ebay. While driving it home the check engine light came on. I took it to a Chevrolet dealership and the transmission was the culprit. I was within the warranty period and mileage period. The company would not stand behind the warranty. They admitted there was no way for me to know the product was defective. I thought that is what warranties were for...to protect against events like this.

I had to stay in Atlanta, GA for five days waiting for the warranty company to "inspect" the transmission. Since the inspection "proved" the transmission would not be covered under warranty I had to pay the dealership the cost to have the transmission completely torn down. Had I known this was simply a ruse, I could have foregone that expense and simply had the transmission replaced. Overall I am out $3600.00 and that does not include what it cost be in lost wages and having to stay 1200 miles from home.

T.A. of Austin TX (6/30/03):
My daughter faxed the required information to cancel the auto warranty to 1Source Auto Warranty on 4/21/2003 and followed that up by sending the original documents by mail. On 5/14/2003 I talked with Mr. Troy H regarding the status of the refund since I, her father, was the one that paid the premium and the credit had not yet been posted to my Mastercard account.

Mr. H referred me to Gretchen who advised me that the refund request would be denied. I asked why and she referred me to Loni H, President of 1Source. I discussed the situation with Ms. H and she told me that "there was clear evidence of misrepresentation and fraud to secure a lower premium". When asked for an explanation she told me that the mileage for the vehicle had been reported as 35,922 on 9/25/2002, the date the original policy was issued, but (and I can only assume that she has access to the Ford dealers service records) on 9/19/2002 the dealer (Bay Area Ford – Houston) reported mileage of 37,257 and again on 10/9/2002 of 37,799.

She also told me that 1Source had called my daughter to inquire about the difference and was told that, “She now had to put a lot more miles on the car since moving to Houston.” Apparently her understanding of the question was, “Why are there so many miles on the car?” and not, “Why is the mileage you reported on 9/25 less than the 37,257 what the dealer reported on 9/19?”. I questioned the validity of the dealer’s mileage entry on 9/19/2002. She reiterated that “there was evidence of fraud and misrepresentation to secure a lower warranty premium”.

Since I was the one that insisted my daughter get an extended warranty, recommended 1Source (I am a previous customer), arranged for the warranty by phone and paid the premium, I can assure you that my daughter was not concerned about the fact that additional mileage might increase what it cost me for the policy. I detailed my understanding and recollection of the conversation with Ms. H on 5/14/2003 via e-mail. Later in the evening I was reviewing the situation and sent her another e-mail where I used an average monthly mileage calculation (which I explained in detail) to show that the mileage my daughter reported to me on 9/25/2002 was consistent with her overall usage and pointed out that, in all probability, the mileage entered by Bay Area Ford on 9/19/2002 was in error by 2,000 miles.

I could have made a mistake since all of the information provided to me by my daughter and by me to 1Source to initiate the policy was by phone. 1SOURCE DOES NOR REQUIRE INDEPENDENT VERIFICATION OF ACTUAL MILEAGE TO ISSUE THE WARRANTY. This leaves the consumer in the position of not being able to prove the actual mileage at initiation of the contract should a dispute arise later.

Having tried to describe the situation a succinctly as possible, I contend:

1.) 1Source issued the first policy for an incorrect term on 9/25/2002 and charged my Mastercard account for $999.00. Then, when I called, I was told that the policy would have to be cancelled and reissued, my Mastercard charged for an additional $999.00, and then credited $999.00. This was all done.

2.) 1Source states that they called my daughter and inquired about the mileage. Therefore you must have had access to the dealer’s records on 9/25/2002 and again when the corrected policy was issued on 10/7/2002 and were aware there was a discrepancy and,

3.) 1Source had the responsibility to either secure an independent confirmation of the actual mileage or cancel the policy immediately.

Therefore, regardless of where the mistake in reporting the mileage was made, whether my fault, my daughter’s fault or that of Bay Area Ford, the essential facts are:

1.) 1Source knew that there was a mileage discrepancy in the first two months of the policy term,

2.) the only claim presented against the policy was denied as being a pre-existing condition (part of the problems that Bay Area Ford could not diagnose or fix) consequently, no claims have been paid under the terms of the policy, and

3.) the policy remained in force without challenge by 1Source until the cancellation and refund request was presented on 4/21/2003.

The 1Source policy (Rev. 09/2002) states in regards to cancellation after being in force for greater than 30 days that “If this VSA is cancelled thereafter and/or a claim has been filed, an amount of the unearned VSA purchase price paid will be refunded according to a pro rata refund method reflecting the greater of the days in force or the mileage driven based on the terms of the VSA and the date or miles when the VSA began.”

Applying the facts we have to the cancellation terms in the policy we know:

A.) The policy was in force from the original issue date of 9/25/2002 to 4/21/2003, a period of 209 days.

B.) The final mileage was 43,302. Determining the total mileage put on the car from policy issue to cancellation is the problem. The correct beginning mileage to ascertain the total miles driven is the issue and was: 1) either 43,302 less 35,922 (reported by my daughter on 9/25) giving a total of 7,380 miles driven, 2) OR – 43,302 less 37,257 plus an additional 487.8 (an average of 27.1 miles per day for 18 days from 9/19 to 9/25 – the average of 27.1 is the difference between the mileage reported by the dealer on 9/19 and 10/9 divided by 20 days) giving a total of 6,533 miles driven.

It is clear that using 209 days and the greater figure of 7,380 miles driven is the most advantageous terms for 1Source to calculate a refund on. Using the dealer’s numbers actually gives you a lower total mileage figure. Regarding Ms. H's assertion that 1Source was witholding the refund of the premium "under their rights regarding misrepresentation" in the warranty, I can find no expression of that "right" in the document dated "Rev. 09/2002".

There is a statement in the Cancellation section which in summary says that 1Source may cancel the agreement if [it] "was obtained by material misrepresentation or fradulant misconduct in submitting a claim." In the event We cancel ... You may not be entitled to a refund." In this case 1Source DID NOT CANCEL the agreement, my daughter and did after it had been in force for seven (7) months with no challange by 1Source. In conclusion I am convinced that, regardless of the errors made in the beginning mileage and by whom, there is a strong supportable case that 1Source is obligated to provide a full refund as stated in the terms of the policy. As I pointed out above, using the days the policy was in force or my daughter’s original mileage statement is, in fact, the most advantageous method for 1Source to calculate a refund.

Damage Resulting: I stand to lose approximately $800.00 which should be refunded from the $999.00 premium when 1Source has paid no claims and been out no expense but administrative costs.

On Aug. 11, T.A. sent us a follow-up:

I e-mailed you a complaint involving 1SourceAutoWarranty.com on 6/30/2003. As yet nothing has appeared in your Consumer News & Alerts nor can I find anything on your website. After being unable to resolve the issue of getting a refund, I have complained to the Federal Trade Commission and have filed complaints with the Attorneys General of the states of Colorado and Texas. The issue is the lack of documented proof of actual mileage when the warranty is issued. If a mistake occurs the company will accuse you of fraud and material misrepresentation and deny claims, cancel your warranty and confiscate your premium.

I also have been unable to find any complaint sites on the Internet for 1Source. The Colorado BBB previously have listed complaints but have now removed them from their website. What gives? Is this characteristic of all Internet auto warranty companies? Have you received other complaints and investigated?

Answer: T.A.'s is the only complaint we've received. We normally don't post complaints until we've seen enough similar reports to establish a pattern but we're posting T.A.'s to see if others come forth with similar experiences.

Follow-Up from T.A. (10/10/03):
This is another chapter in the long and frustrating story. I complained to the Attorney General of Colorado who bucked the complaint to the Denver BBB. We attempted resolution but 1Source is now charging us with odometer fraud. I have admitted that I mistakenly submitted the mileage in error by a couple of thousand miles (now verified by dealer service records) and was totally unaware of this untill challenged when we cancelled the warranty and requested a refund. However, by entering both mileage figures in 1Source's online program we found that there would be absolutely no difference in the cost of the warranty. So, 1Source has suffered no loss, paid no claims, knew about the error in the first month of the warranty yet left the warranty in force for seven months. They will not provide a refund and we are now going to arbitration as required in the warranty. I don't have much hope of ever getting the $800 back.

According to 1Source, the warranty, which involves and affects interstate commerce, contains a binding arbitration provision. Under the Federal Arbitration Act, 9 U.S.C. ?? 1, et seq. (hereinafter "FAA"), specifically, 9 U.S.C. ?2 provides in pertinent part: "A written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exists at law or in equity for the revocation of any contract." So, we can't bring a lawsuit and the arbitration must be held in Denver (I live in Austin TX) and to be successful we will probably have to hire an attorney incurring additional expense in addition to the $800 we are trying to recover. I'd never advise anyone to purchase an extended warranty.

That's right and T.A. lives in a state, Texas, that is seldom inclined to be let consumers break out of arbitation clauses.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Back to the top | Extended Warranties