State Attorney General and Consumer Affairs File Suit
Against Company Offering Service Contracts for Vehicle Repairs
NEWARK – The Office of the Attorney General and State Division of Consumer Affairs
have filed suit against a company that advertised vehicle repair coverage plans that
purportedly offered bumper-to-bumper coverage – even including parts subject to
normal “wear and tear” -- and then allegedly refused to fully pay when repairs were
Direct Buy Associates Inc., which does business as Direct Buy Auto Warranty, allegedly
committed multiple violations of the state’s Consumer Fraud Act. The company has
maintained various business addresses in Middlesex County since at least June 2009.
Nearly 250 consumers nationwide to date have filed complaints against Direct Buy
Associates, one of the highest amounts against any active company in the state.
Despite its advertising statements that it sold warranties, Direct Buy Associates sold
vehicle service contracts. Warranties are offered by the manufacturers or sellers of a
product, while vehicle service contracts are offered by third-parties such as Direct Buy
Associates. Further, the vehicle service contracts sold by Direct Buy Associates
provided limited coverage and numerous exclusions.
The company also functioned as the administrator of the vehicle service contracts it
sold, determining whether consumers’ claims for repairs would be approved.
Consumers reported that they had to pay for repair costs themselves when the
company denied repairs that were covered under the plans. The company issued its
denials verbally, often changing the reasons for a specific denial when a consumer
questioned company representatives.
Some consumers also stated in their complaints that they did not receive full refunds in
a timely manner when they tried to cancel their contracts with Direct Buy Associates.
“Consumers are out thousands of their hard-earned dollars because of the alleged
business practices of this company,” Acting Attorney General John J. Hoffman said.
“We are seeking court approval to get restitution paid back to the affected consumers.”
Additionally, the State is alleging Direct Buy Associates violated the Consumer Fraud
Act because on its website no details were listed for the various plans offered, such as
the price of the plans; the Plain Language Act because the vehicle service contracts
were not written in a clear and understandable way; the state’s Advertising Regulations;
and the Business Corporations Act because it is not authorized to operate in New
The State also is seeking assessment of civil penalties and reimbursement of its legal
and investigative expenses from Direct Buy Associates.
“Direct Buy Associates offered consumers a product that sounded too good to be true,
and, unfortunately, it allegedly was, as evidenced by the hundreds of consumer
complaints,” said Eric T. Kanefsky, Director of the Division of Consumer Affairs.
“Consumers hoping to save on vehicle repair costs instead were taken for a ride by this
company so we have brought legal action to hold it accountable.”
Deputy Attorneys General David M. Reap and Jeffrey Koziar in the Division of Law’s
Consumer Fraud Prosecution Section are representing the State in this matter.
Investigator Aziza Salikhov in the Office of Consumer Protection conducted the
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file an online complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey) or 973-504- 6200.
Follow the Division of Consumer Affairs on
Facebook , and check our online calendar of upcoming
Consumer Outreach events.