Solicitations to purchase vehicle warranties targeted to the owners of specific makes and models led to a new putative class action in a Wisconsin federal court.
After receiving two notices in the mail that the manufacturer’s warranty on her vehicle was about to expire, Linda Kundinger sued CarSure, LLC, for violating the Driver’s Privacy Protection Act (DPPA). The federal statute makes it “unlawful for any person knowingly to obtain or disclose personal information, from a motor vehicle record, for any use not permitted” by the law.
Congress intended to provide drivers with a privacy interest in the personal information that they provide to state departments of motor vehicles, Kundinger told the court, when it enacted the DPPA to provide a private right of action to protect those privacy interests. While the statute contains exemptions for permissible uses of drivers’ personal information, it does “not permit such information to be obtained, disclosed, or used for marketing or solicitation purposes—which is precisely what CarSure does,” according to the complaint.
CarSure obtains sales leads from third-party data suppliers that provide “personal information,” including names, addresses, and vehicle make and model numbers, and then directly solicits consumers, Kundinger claimed. She received two letters in the mail that implied they were sent from a dealer or manufacturer and that contained statements such as “FINAL ATTEMPT” and “IF [THE WARRANTY] HAS EXPIRED YOU WILL BE RESPONSIBLE FOR PAYING FOR ANY REPAIRS” that were designed to induce her to contact CarSure about purchasing a vehicle services contract.
The complaint cited a warning from the Better Business Bureau (BBB) “urg[ing] consumers to use caution when considering doing business” with CarSure, as it has “received numerous complaints” about the company, and 95 percent of the customer reviews on the site are negative. Kundinger also included a laundry list of complaints from the BBB’s site (“THIS IS A SCAM and should be investigated and punished for what it is” and “The advertising mailer for this company is completely misleading,” for example).
Seeking to certify a nationwide class of consumers whose names and mailing addresses were obtained from a motor vehicle record and acquired and used by CarSure for purposes of marketing and/or solicitation dating back four years, the complaint requested injunctive relief as well as punitive and monetary damages, including the $2,500 statutory award under the DPPA.
To read the complaint in Kundinger v. CarSure, LLC, click here.
Why it matters: Relying in part on a negative rating from the BBB and other consumer complaints for support, the Wisconsin federal court complaint alleged that CarSure violated the DPPA with its targeted ads.