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GM Faces Class Action over Extended Warranty Refunds

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Beaumont, TX: General Motors is facing a class action lawsuit over alleged unfair business practices associated with its extended warranty plans.

Class representative, Jimmy Hendon, filed the suit against General Motors Co, and General Motors LLC on April 21, 2010. He claims that GM improperly calculated his prorated cancellation refund associated his GM Major Guard Vehicle Service Contract. Hendon purchased the extended warranty in 2006 as additional 12 month/44,000 mile coverage to the GM standard 36 month/ 36,000 mile factory warranty which came with the new 2006 Chevy Avalanche he had just bought. Hendon canceled the extended warranty in 2009, with 18,483 miles remaining on the contract.

Specifically, the complaint alleges that GM calculated Hendon's refund by taking the remaining miles divided by the 80,000 total miles under warranty, resulting in a $295 refund. Hendon claims GM should have calculated his refund by dividing his remaining miles by the 44,000 mile extension, resulting in a $580 refund.

The suit claims that GM should be prorating the canceled refund by dividing the remaining miles or days by the number of miles or days that the service contract extended the factory warranty.

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