Updated on: December 1, 2024 / 5:04 PM MST / CBS Colorado
The state of Colorado wants to talk to two men about their company's extended warranty program. stretch wrap film
Not randomly via phone, but face-to-face in a courtroom. Before a judge.
The men -- Jack Yedid and Ralph Anteby, both of New York -- own and operate Champion Car Warranty. They've worked out of an office in Colorado Springs for the past three years.
The Colorado State Attorney General's Office filed a civil lawsuit against the men and their business on Oct. 31. It accuses them of failing to fulfill the car warranties they've sold, advertising falsehoods and misrepresenting their products and reputation. An El Paso County judge also approved the state's request to put a stop to the business's operations and freeze its assets.
Champion Car Warranty sells extended warranty coverage to vehicle owners. An extended warranty is insurance coverage for repairs once a vehicle manufacturer's warranty expires. An extended warranty can also supplement or overlap with other coverage.
In the case of Champion, state prosecutors claim its owners have unlawfully earned more than $2 million from customers across the country.
A month later, the exhaust part failed. Champion did not honor the agreement to cover the cost of the repair.
"Champion rejected a claim for the exact services it had promised would be covered," prosecutors said.
The Saguache couple tried to cancel the warranty contract and get a refund. They received no refund, according to the complaint, nor a purported $400 "courtesy check" a representative promised them.
That the couple received a response to their inquiry was unusual, according to the complaint. A state investigator called the company and was put on hold for an hour. Seconds after the automated system told him he was next in line to speak with a company representative, the call was disconnected. Many customers have reported the same experience when trying to contact the company, according to the state's complaint.
In addition to the alleged customer service issues, the state's investigation also cited blatant examples of the company misleading the public.
For instance, Champion's website included a statement about a donation being made to Operation Military Family -- a Washington-based organization that helps military and veterans' families -- for every new customer contract received by the company. Investigators discovered Champion has made only a single $100 donation to the charity. And that check bounced.
"In fact, the military charity has never received a cent from Champion," the complaint reads.
"S.G." is a disabled veteran and Champion's claims of charity toward veterans may have swayed the Saguache couple, prosecutors noted, as well as other customers. Prosecutors went so far as to speculate the company opened its office in Colorado Springs to lure in members of the military community there. Colorado Springs is home to Schriever Space Force Base, Peterson Space Force Base, Cheyenne Mountain Space Force Station, the Air Force Academy and the U.S. Army's Fort Carson Garrison.
"Defendants targeted Colorado consumers by purporting to support a military charity and told at least one Colorado consumer (who was himself a veteran) that Champion had 'served the veteran community for decades,'" prosecutors stated in the complaint. "Again, these representations were false."
Prosecutors cited other deceptive claims from the company's website:
All of the claims, according to state prosecutors, are false. The claimed positive reviews were particularly confounding to state prosecutors in light of Champion's current rating on commercial review sites Yelp and Trustpilot. Those ratings are 1.7 (out of 5) and 2.3, according to the complaint.
Prosecutors also point out that Yedid and Anteby have created similar businesses in other states. They named three:
Customer complaints about all three have been received by state and federal regulatory agencies, according to the complaint.
Lastly, prosecutors claim Yedid and Anteby never obtained a "motor vehicle service contract," a consumer protection instrument issued by the state, for Champion. That contract is required by Colorado law for any company offering extended warranties. Nor does the company's direct contracts with customers contain language required by state law, according to the complaint.
"Champion intentionally holds itself out as a legitimate provider of extended car warranties, making promises of coverage, accessibility, reliability and trustworthiness that entice consumers into paying thousands of dollars for warranty coverage," the complaint states. "But Champion's actual services are nothing like advertised, and its advertised affiliations and acclamations are false."
"Put simply, Champion takes the money and runs," prosecutors said.
The state is seeking a monetary judgment against Yedid and Anteby for violations of the Colorado Consumer Protection Act.
CBS News Colorado called Yedid and Anteby's Colorado Springs-based defense attorney for comment, but the call disconnected after one ring.
The next court hearing in the case is scheduled for Dec. 12.
Logan Smith is an assignment desk editor at CBS Colorado in Denver with more than 30 years of journalism experience in digital, television and print media.
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