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State sues used car warranty company

| Friday, Nov. 16, 2001

The state Attorney General's Office filed suit Thursday against the operators of a used car warranty company who closed their business while owing $45,000 to customers in Westmoreland County and in Pennsylvania and New York.

Authorities allege that Kevin and Kristen Smith, operators of Northeast Warranty Corp. of Taylor, Lackawanna County, did not offer refunds or pay outstanding claims to more than 70 consumers when they closed their business without prior notice in September 2000.

Officials in the Attorney General's Office allege the Smiths sold six-month to three-year car repair reimbursement warranties through several used car dealers in Pennsylvania and surrounding states.

Officials said more than 70 customers throughout Pennsylvania and in New York claim they paid between $195 and $395 for repair coverage, and wound up either having the coverage canceled or receiving bills for unpaid claims.

Included in the suit were Pennsylvania customers from Westmoreland, Allegheny, Greene, Lackawanna, Lawrence, Luzerne, Monroe, Wayne and Wyoming counties.

Individual losses ranged from $135 to $3,555. Two auto repair centers also reported losses.

In addition to more than $45,000 in restitution for the 70 customers and others who come forward with proof of losses, the Attorney General's Office is seeking $7,100 in civil penalties and the forfeiture of the Smiths' right to engage in warranty business until restitution is arranged, officials said.

The Attorney General's Office is asking those who suspect they may be eligible for restitution to phone 800-441-2555 or to file a complaint online at www.attorneygeneral.gov .

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