Cheated customers fight worthless car warranties with $80m lawsuit

Andrew Munro 20 June 2017

car dealer

The law firm filing the class action was "astonished" the product has been on the market for so long.

The courts are poised to rule on an $80 million class action lawsuit being levelled against the National Warranty Company (NWC), a subsidiary of McMillan Shakespeare. The case has been brought against NWC for offering "worthless" warranties that cost thousands of dollars.

"We look forward to... bring[ing] NWC to account for its worthless warranties. This is a chance for consumers to claim a refund of the warranty and exorbitant interest that was bundled into the cost of their purchase," says Tom McDonald, counsel at Vannin Capital, the company initiating the lawsuit.

Damian Scattini, a partner at law firm filing the class action Quinn Emanual says "it is astonishing that a product like this has been on the market for so long."

The NWC warranty was sold with used cars and trucks, with the fine print saying that NWC will "consider" a claim, rather than actually offer any kind of compensation or repairs. "Whether or not they pay anything is entirely at NWC's discretion," explains Damian Scattini. "...and guess which way they usually decide..."

NWC is a subsidiary of McMillan Shakespeare, Australia's largest provider of salary packaging and novated leasing services, as well as a leading fleet and asset management and financing services.

If you have a novated lease or are financing a business vehicle, be aware of this and check to see whether you are affected.

While the terms of these extended warranties were particularly egregious, it still flew under the radar for years. This is despite coming from a brand as large and well known as McMillan Shakespeare.

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