Our North American Dealer Co-Op order -- and what it means if you're a customer

In October, many consumers across Washington received notices from the North American Dealer Co-op (NADC). Our office ordered NADC to send out those notices.

Here’s the background: Washington car dealers would sell people vehicle service contracts, offering a money back guarantee as an incentive to buy them. If you didn’t use the vehicle service contract after a certain period of time and met other conditions, you were promised your money back.

NADC, in essence, insured that money-back guarantee. (The service contracts themselves are a separate product, and are NOT affected by our order. More on that below.) In 2007, Insurance Commissioner Mike Kreidler told the company that they were acting as an unauthorized insurer in Washington state. The company disputed that; a hearing was held and the commissioner’s decision was upheld.

In October 2010, Thurston County Superior Court Judge Thomas McPhee affirmed the order, which requires NADC to do the following things:

-Stop offering the program to any Washington auto dealers.

-Send a copy of the order to all member dealers.

-Send a copy to all Washington consumers who’d bought an NADC auto dealer extended service contract reimbursement guarantee.

-Tell consumers that should they file a valid claim against that guarantee when their extended service contract expires, it will be honored.

Here’s the critical thing to know: The underlying vehicle service contract should still be in effect. Those service contracts are a different product, covering repairs to the car. Those contracts are not affected by this order.

Our order does, however, require NADC to honor all valid money-back guarantee claims made for unused service contracts under NADC’s money-back guarantee offer.

If you’re a Washingtonian and have questions or concerns that NADC’s improperly denying your money-back claim, contact us at 1-800-562-6900.

Consumers can also contact:

North American Dealer Co-Op
1-800-637-2277
ATTN: Claims Department
1661 Wadsworth Blvd.
Lakewood, CO 80214