Pennsylvania Attorney General Tom Corbett has filed suit against a company he alleges sold thousands of fraudulent warranties to unsuspecting consumers.
Eagle Warranty, based in Eynon, Pa., sold warranties for used cars, working in tandem with dealers in a number of states.
Eagle offered four-year warranties, ranging from $400 to $2,500. According to Corbett's suit, the company authorized a number of repairs but then failed to pay for them, leaving consumers to fend for themselves when confronted with payment demands from repair shops. A number of consumers received checks from Eagle, only to have them bounce when they tried to cash them.
In a statement, Corbett said that consumers "believ[ed] that they were protecting their vehicles and guarding against future repair expenses," but instead have encountered "unanswered calls, unpaid claims, bounced checks, unrepaired vehicles and worthless warranties."
On December 11, Eagle promptly closed its doors, dashing any hope that the company was in the process of getting its act together.
Nils Frederiksen, a Corbett spokesman, told the Scranton Times-Tribune that Eagle boasted on its website of having 65,000 customers. Frederiksen said that Corbett's office is treating all of those customers as "potential victims."
Corbett is seeking compensatory damages and a penalty of up to $3,000 per consumer for violations of the Consumer Protection Law, which renders illegal unfair methods of competition and unfair or deceptive practices used in commerce. The statute gives the attorney general the power to bring a suit whenever he "has reason to believe that any person is using or is about to use any method, act or practice" prohibited by the law.
The suit also requests an injunction barring Eagle from selling any used car warranties until it has fully compensated all of its alleged victims. Corbett has already achieved a preliminary injunction freezing Eagle's bank accounts and other assets; a court will decide on Tuesday whether to extend the injunction.
Corbett's office has received at least 160 complaints about Eagle. ConsumerAffairs.com has received several complaints as well. Bill of Farragut, TN provides a representative account:
"I purchased the extended warranty 18 mos. ago when I purchased a 03 saab 93 from a dealer. There have been alot of mechanical problems ... Chad at Eagle Warranty claims told me they would be responsible for 767.38 ... I have talked to him and left messages at least 20 times since and he refers me to Holley in accounting. The last time she actually answered the phone she said a check would be mailed out on Aug. 17th. It did not happen and she has avoided answering all calls since. I cannot get in touch with her after trying 40 times ... I am out 2200.00 plus a week of car rental that was authorized and not payed for at 150.00, plus 120.00 of cell phone bill over and above our normal plan because of all the calls to Eagle."
Katheryne of Los Angeles, CA, found herself shafted after Eagle shut its doors:
"I purchased a used 2002 Honda Accord on 12/11/08 from Emmons Motor Company of Pasadena, Texas and with this purchased a $1400.00 warranty (4 yrs unlimited mileage and unlimited repairs Liberty plan). Emmons informed me that Eagle Warranty Corp. closed down and that I must file a complaint with Attorney General of Pennsylvania (which I am currently doing). Emmons informed me that there are other consumers in my situation also."
In addition to Eagle, the suit names as defendants Charles Yaskulski, the company's president, and Charles Yaskulski Jr., a vice president and the elder Yaskulski's son.
Eagle provided warranties for dealerships in Pennsylvania, New York, New Jersey, Michigan, Texas, Delaware, Ohio, Rhode Island, South Carolina, Tennessee, Kentucky, and West Virginia.
Consumers who have experienced a problem with an Eagle warranty should call the Consumer Protection Hotline at 1-800-441-2555 or file a complaint at www.attorneygeneral.gov.