Auto warranty company accused of kicking consumers to the curb

HOUSTON -- With his Chevy Tahoe getting up in miles, Samuel Nah wanted to prepare for the future.

"You don't know what might happen, today your car is driving fine, the next day there's something wrong with it," Nah said.

So he plunked down $2,400 for a five-year warranty administered by Houston based Tier One Warranty. It was a "very wise decision" his paperwork stated, that would give him "peace of mind."

But instead, it brought headaches.

"They will make it all sound good, and then when it's time for them to cough up some money for your repairs, they start giving you problems," Nah said.

Nah had a transmission problem, got an estimate, and the mechanic began the work. But when it came time to collect on the warranty, Nah said he got stonewalled.

"Called, called, called, put on hold for one hour, two hours, nobody responded," he said.

Nah said he never spoke to a live person at Tier One Warranty, and in the end, had to pay the $2600 transmission bill himself.

"I feel really bad, I feel used, I feel abused, I feel like, duped," Nah said.

And he's not the only one.

"I was very mad," said Christina Willett, who also bought a warranty administered by Tier One, and who also had her transmission break down.

"I call the accounting office, it rang and rang," Willet said.

"I stayed on the phone for two hours, nobody picked up, no voicemail, nothing," she said.

Willett said that seemed strange because her mechanic had received the go-ahead to do the work from a Tier One adjustor.

"They had authorized about 1400 dollars," said mechanic Ronnie Smith.

But Smith said the last word he heard from Tier One Warranty, was a false promise.

Smith: "The check would be issued and it would be mailed on a certain, certain date, but it never come (sic)."

I-Team: "'Check is in the mail."

Smith: "In the mail, but it never come (sic)."

Turns out, Tier One Warranty has dozens of complaints with the Texas Attorney General and with the Better Business Bureau, which gives the company a failing grade. And according to the Texas Department of Licensing and Regulation, Tier One Warranty has been operating without a license since 2012, when the agency fined the company $3,750.

The I-Team tried tracking company executives down. But a North Houston office building no longer lists Tier One as a tenant, and letters sent to home addresses were never answered.

We also reached out to the Better Business Bureau's Monica Russo.

I-Team: "We've tried to reach out to the owners and the principles of this company and have had no luck, has the BBB?"

Russo: "No we haven't, not in several months."

Russo said Tier One Warranty used to respond to consumer complaints, but that around the first of this year, her office stopped receiving any type of communication from the company.

Whether Tier one is still operating is unclear. But Russo said either way, it doesn't bode well for consumers.

"I'm not sure there is a good answer or a good outcome for them in this case," Russo said.

In fact, when it comes to any extended auto warranty, there's very little protection for Texas consumers. The Department of Insurance doesn't regulate them because, as a representative told us, it doesn't consider extended auto warranties a form of insurance. And the Department of Licensing is primarily limited to handing out administrative penalties--which companies sometimes just ignore.


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