For Immediate Release
Media Contact: Bob Cooper
(208) 334-4112

Date: June 4, 2009

Attorney General Recovers Restitution in Post Falls Mazda Case

(Boise) - Consumers who paid Post Falls Mazda for auto service or debt cancellation contracts they did not receive will collect restitution, Attorney General Lawrence Wasden said. Wasden’s office obtained a judgment against the former auto dealership and recovered $20,000 in restitution. The restitution will be distributed to eligible consumers whose contracts are invalid because their insurance company was not paid.

Last month, the Attorney General’s Office notified consumers of their eligibility for restitution. Those restitution checks are expected to be mailed later this month.

In addition, Mark Gibson, the owner of Post Falls Mazda, agreed not to own or operate another Idaho vehicle dealership without supervision until he reimburses the state for its litigation costs.

Wasden filed lawsuits in state court and bankruptcy court alleging that Gibson and Post Falls Mazda accepted money from consumers for extended vehicle service and debt cancellation contracts but failed to forward the money to the insurance company. This left numerous consumers without the contractual coverage they believed they purchased.

“This is not a unique situation,” Attorney General Wasden said. “Consumers have complained about other Idaho dealerships that sold service or debt cancellation contracts and received money from consumers for those contracts but never paid the insurance company. Usually, the consumer does not discover the vehicle is not covered until it needs repairs or is in an accident.”

Shortly after receiving the state’s complaint, Gibson filed for bankruptcy. The Attorney General pursued an adversary action against Gibson in bankruptcy court.

“Filing for bankruptcy does not protect businesses from a possible consumer protection lawsuit,” Wasden said. “In situations involving significant consumer losses, the consequences of a business’s unlawful actions will follow it into bankruptcy court.”

Although CNA National Warranty Corporation subsequently agreed to honor consumers’ service contracts, dozens of debt cancellation contracts and some service contracts remained unpaid. “The company recognized the harm that Post Falls Mazda caused consumers and stepped forward to minimize that damage,” Attorney General Wasden said.

Consumers who have purchased service or debt cancellation contracts may contact the program’s administrator to verify the purchased contract is in effect.

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