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Contract spells out warranty refund

Amount of warranty refund is spelled out in contract

Q: I am hoping you can help me with a warranty problem I am having.

Continental Warranty would not cover work that was done on my car so I called the company and was told by a representative to state in writing that I wanted a refund.

I did that and also sent in proof of purchase and canceled checks, which were required to cancel the contract. I expected to get a full refund after I completed this tedious gathering of information.

I received a check from Royal Administration Services Inc., administrator of my contract with Continental Warranty. The check was for $245.92, but I paid a total of $1,145.50 for a plan that would not cover essential maintenance work on my car.

I asked Debra O'Keefe at Royal Administration Services why I only received $245.92 as a refund when the total amount I paid was almost five times that. She told me it was because Continental Warranty had gone out of business. When I called originally about the claim for maintenance on my car, no one told me it was out of business.

She explained that when requesting a refund, you only get a prorated refund and the amount I received is all I am entitled to.

I want to know if there is anything else that can be done to at least get half of my money back. If not then I will let it go.

Lawanda McCarter

A: Continental Warranty is no longer establishing new warranties, according to its automated phone message, which, after pressing a few buttons as instructed, transfers the call to Royal Administration Services.

Paul Sporn, general counsel for Royal Administration Services, said the company has advised the state of Florida it would assume any refund responsibility for current contracts. "No Florida consumer will be penalized or suffer economic loss because Continental is no longer in business. Any contract that we administered will be adjudicated under the contract terms."

Under your contract terms, as well as Florida law, you are entitled to at least 90 percent of a prorated refund, determined by time and mileage.

Your contract was established on Oct. 11, 2004, with 16,000 miles on the car. Although your contract expired on Oct. 11, 2010, you canceled on May 27 and reported a mileage reading of 64,201.

Due to the time elapsed and miles driven, Royal Administration Services calculated a prorated refund for 23.92 percent of your plan payments made, minus fees. That comes to approximately $274, or $245 after fees.

In the cancellation section of your contract terms, this process to determine your prorated refund is clearly laid out. It is unfortunate that Continental would not cover the maintenance you sought, but those terms should have been investigated before you purchased the warranty. A quick inquiry with the Better Business Bureau before making the commitment would have let you know Continental had an F rating.

Contract spells out warranty refund 07/11/09 [Last modified: Saturday, July 11, 2009 4:31am]
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