Department issues Cease and Desist Order to protect Californians from illegal extended warranties sales
News: 2020 Press Release
SACRAMENTO, Calif. - The California Department of Insurance (CDI) issued a Cease and Desist Order effective immediately upon Omega Vehicle Services, LLC doing business as Delta Auto Protect, and its controlling manager, Charles Seruya, for allegedly selling illegal Vehicle Service Contracts (“VSCs”) to over twenty California consumers.
The Cease and Desist Order alleges both Delta Auto Protect and Seruya were not licensed by the Department of Insurance and improperly denied claims, illegally sold contracts they did not first file with the Department directly to consumers, and used an unapproved backup insurer.
Under the Order, Delta and Seruya are to immediately stop selling VSCs in any capacity and cease acting as an insurance agent or producer or in any other capacity in the State of California for which they do not hold a valid license, permit, or Certificate of Authority.
Generally, VSCs, often called ‘extended warranties’, are offered to consumers by car dealers when they buy a car. Most typically provide coverage for repairs due to mechanical failure. Others offer coverage for routine services, such as oil changes and tire rotation, or other services such as paintless dent removal, glass or key replacement, or tire and wheel repair.
VSCs may be sold legally to Californians only when specific criteria are met, which Delta and Seruya failed to do.
- Every VSC must be filed with CDI before it can be sold.
- Companies responsible for paying the claims on VSCs must be licensed by CDI, unless the company is a vehicle manufacturer, distributor or dealer.
- These companies must carry CDI-preapproved backup insurance insuring every VSC they sell, unless they receive an exemption from CDI by proving their company has a net worth of at least $100 million.
- VSCs can only be sold through dealerships licensed by the Department of Motor Vehicles. Direct sales to consumers are illegal.
Californians who purchased a Delta Auto Protect vehicle service contract should contact CDI Investigator Leanne Borden at (707) 751-2059.
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Media notes:
- Cease and Desist Order
- More information about Vehicle Service Contracts (VSCs).
- According to public records, including a civil complaint filed by the Pennsylvania Attorney General, Delta maintains addresses at 600 Eagleview Blvd, Suite 300, Exton, Pennsylvania and 1735 Market Street Suite 3750, Philadelphia, Pennsylvania. Public records also indicate that Charles Seruya maintains an address at 1 Ross Court, Oakhurst, New Jersey.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.
