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Department issues Cease and Desist Order to protect Californians from illegal extended car warranties sales

Infinite Auto charged consumers a total of $58,216 and is ordered to stop selling VSGs immediately

Sacramento, Calif.—The California Department of Insurance issued Orders to Cease and Desist and to Show Cause effective immediately upon Opulent Marketing, Inc. doing business as Infinite Auto Protection (Infinite Auto) for allegedly selling illegal Vehicle Service Contracts (VSCs) to 25 California consumers across the state.

The Orders to Cease and Desist and to Show Cause allege Infinite Auto was not licensed by the California Department of Insurance and improperly denied claims, illegally sold contracts that they did not first file with the Department directly to consumers, and failed to use a backup insurer. Infinite Auto charged consumers a total of $58,216.

Under the Orders, Infinite Auto is 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 and show cause why a $5,000-per-day penalty against it should not issue.

VSCs may be sold legally to Californians only when specific criteria are met, which Infinite Auto failed to do, namely:

  1. VSCs can only be sold through automobile and watercraft dealerships licensed by the California Department of Motor Vehicles. Direct sales to a consumer is illegal.
  2. Every VSC must be filed with the Department before it can be sold.
  3. Companies responsible for paying the claims on VSCs must be licensed by the Department, unless the company is a vehicle manufacturer, distributor, or dealer. 
  4. These companies must carry Department-preapproved backup insurance insuring every VSC that they sell, unless they receive an exemption from the Department by proving their company has a net worth of at least $100 million.

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