Service Contract Industry Council: Deceptive practices in marketing service contracts will not be tolerated

Feb 25, 2016, 12:41 ET from Service Contract Industry Council

TALLAHASSEE, Fla., Feb. 25, 2016 /PRNewswire/ -- The national trade association representing service contract companies today said the industry has worked hard to raise the bar on the marketing of service contracts through model legislation and best practices and will not tolerate deceptive practices in the marketing of these products. These comments came after an announcement by Minnesota Attorney General Lori Swanson that she has filed a lawsuit against a Missouri-based marketer of vehicle service contracts for falsely telling consumers their existing warranty had expired, misrepresenting the terms of coverage under the service contract being marketed, and falsely implying an affiliation with the vehicle dealer or manufacturer.

"The Service Contract Industry Council (SCIC) has worked hard to develop fair and uniform regulation to protect consumers and is an advocate for regulation of the service contract industry that aims to prevent the type of conduct that is at the heart of the Attorney General's complaint," said Executive Director Tim Meenan. "Service contracts fill an important consumer need, and we will not stand for deceptive practices in the marketing of them."

The SCIC played a significant role in the development of the Service Contract Model Act adopted by the National Association of Insurance Commissioners, and has played a key role in the enactment of legislation in more than 35 states. Furthermore, the SCIC has worked with state regulators in numerous states to either modify existing regulations or conform state regulatory policies in a manner consistent with the standards of practice appropriate for the industry and its customers.

Service contracts provide car buyers with a sense of security up front by covering more than the original manufacturer's warranty. Without additional coverage, consumers can find themselves responsible for replacing many "non-essential" items, even before the manufacturer's warranty expires.

Attorney General Swanson's action is directed at deceptive marketing practices and not the worthiness or effectiveness of the service contracts themselves. Meenan said the SCIC favors quick action against any company that fails to adhere to the highest standards of customer service and integrity.

"We strongly encourage consumers who are considering the merits of a service contract to check to see if the provider is registered as a service contract provider in their state, an important step that will help ensure that they are receiving the highest levels of professionalism and reliability," Meenan added.

For more information, visit

SOURCE Service Contract Industry Council