If you've been considering an extended warranty for that car you're buying, you may want to proceed with caution.

Illinois Attorney General Lisa Madigan is going after a Will County used car dealership and its two owners, who allegedly pocketed thousands of dollars paid to them by customers for extended warranty coverage.

The lawsuit filed by Madigan alleges that customers of Alpine Auto Group found themselves without the extended warranty insurance coverage they believed they had purchased along with their used cars. On two separate occasions, consumers reported to Madigan's office that only after they had taken their cars in for repairs did they learn of the missing coverage.

Madigan calls it a "truly horrible feeling" to pay for a service or product only to learn that your money has been pocketed by the wrong person," She calls such conduct "intolerable and illegal."

Alpine Auto went out of business in February, 2004. The dealership and its co-owners, Jeffrey Star of Joliet and Joe Demarco of Monee, are charged with multiple violations of the Illinois Consumer Fraud and Deceptive Business Practices Act.

According to Madigan's suit, between September, 2002 and February, 2004, the two sold used cars and offered to sell to consumers extended warranty packages at their dealership. Star and Demarco filled out consumer applications and collected fees for extended warranty packages, acting as agents for the warranty company.

However, Madigan says the men pocketed the money they received for the extended warranties, leaving their customers without the extra coverage.

In one alleged instance, a consumer paid the defendants $2,500 for an extended service warranty contract, but when he took his car to be serviced at another shop just six months later, he was told the insurance company had never received a contract or payment for the coverage. Despite repeated requests for reimbursement, the defendants refused to return his money.

Madigan's suit seeks to revoke the defendants' business licenses and prohibit them from advertising, offering for sale and selling vehicles in Illinois. Additionally, Madigan seeks a civil penalty of $50,000 and additional penalties of $50,000 for each violation of Illinois law found to have been committed with intent to defraud.

Madigan urges consumers to research a dealership thoroughly before making a new or used car purchase. She also warns that extended warranty contracts are a high-profit item for auto dealers and, like other products at the dealership, may be negotiable.