My boyfriend Brett recently ran into a problem with GAP insurance that he purchased, and we are looking for a little direction to see where he can go from here. It looks as though he was defrauded by the car dealership that he purchased his car from, as well as potentially by the GAP provider, but the car dealership is now in bankruptcy, no one will return our calls, and he is stuck with $3200 in debt that he can't afford.
Here's the detailed story. In April 2007, Brett purchased a car from a used car dealership in Spokane, WA called Town and Country Auto, Inc. He didn't have money for a down payment, but really needed a more flexible mode of transportation (other than walking or the bus) as he was picking up a second job and planned on moving away from the area in the next several months. Brett realized that GAP insurance (to cover the difference should something happen to the car while he was upside down on the loan) would be a good idea for him since he was rolling everything (down payment, taxes, warranty, etc) into the loan for the car. The total came to around $8,000, which he financed with Wells Fargo.
A few months later he moved to Maryland. In November 2008, Brett got into an accident with the car. Though the damage wasn't huge, the insurance company decided the car wasn't worth enough to repair it and declared it totaled. At this point the loan was down to $5500, and they declared the value of the car to be $2700 with a $500 deductible, leaving Brett with a total of $3300 to pay off to Wells Fargo. Once things settled down, Brett called Wells Fargo to inquire about how the GAP payoff should work, and they told him to call the GAP insurer to file a claim.
This is where it got strange.
Brett calls Beacon Industries, Inc and tries to file a claim. They ask him for a policy number, which he can't find anywhere in his paperwork (though he does have a copy of the GAP form that was typed up with Beacon's logo on it, as well as the receipt from the dealership that shows he paid $400 for GAP). They then attempt to search under first the VIN, then his name, but cannot find him in their system. At this point they tell him to consult the dealership. In the meantime, Brett calls Wells Fargo and asks them to fax a copy of the contract directly to Beacon, which shows both the GAP form and the itemized receipt from the dealership.
Brett calls Town and Country Auto, only to find that they've filed for bankruptcy. After many calls and an in-person inquiry at the office (during a well-timed visit back to WA for the holidays), it sounds as though Town and Country Auto never sent in the GAP paperwork to Beacon. The man we spoke with identified himself as Don Hess (who claimed on the phone not to have anything to do with Town and Country Auto, then claimed in person to be a contractor hired by the company, but is clearly listed by the BBB as the VP of Town and Country Auto). Don attempted to convince us to take Beacon to small claims court, since Brett would be unlikely to get anything from Town and Country Auto in bankruptcy. Don said that Town and Country Auto could be considered an authorized "agent" of Beacon and thus Beacon would still be responsible for Brett's GAP claim (and would have to go to Town And Country Auto for the $400 they never received). We were also able to get the number for the lawyer who is supposedly handling the bankruptcy, who we called and have yet to receive a call back from.
I did a little research on Town and Country Auto and called the Eastern District of Washington's Bankruptcy Court office. They couldn't find any record of Town and Country filing for bankruptcy. The person at the court office suggested that they might have filed under a different company name since they are incorporated, but when I inquired over the phone at the Town and Country Auto office, they refused to tell me what name it was filed under. When I had the opportunity to inquire in person, they said it should be filed under their own name (no incorporation).
Doing a little more research, it seems that Beacon Industries Inc. is not without its own problems. It has an F rating with the BBB and (according to the internet) a history of ignoring, losing, and underpaying claims with GAP. See
this article. This information is troubling, and seems to reflect our situation. After Wells Fargo faxed Beacon copies of Brett's paperwork, Brett has called Beacon to follow up numerous times, but no one will return his calls.
So, Brett still owes $3200 to Wells Fargo, is already pretty strapped financially (and recently started college again in order to fix that problem for the longer term but will have to cut back on working hours in the meantime), and everyone is pointing the finger at someone else. In the short term we've been carpooling, but due to work and school schedules he will most likely have to get another car in the next few months, and since he doesn't want to take on more debt, his plan is to have at least a little money saved and hopefully pay for a cheap-ish "beater" car in cash. However, with this additional debt and his lessened hours at work, this will be extremely difficult.
It seems pretty clearly that the fault of the non-filed GAP paperwork lies with Town and Country, but if they are truly in bankruptcy (can this be verified somehow?) then the chance of Brett getting any money is extremely small. Beacon could potentially be held accountable as Don Hess claimed, but they won't return any more phone calls and clearly have a pretty shady reputation.
What should we do? Is there any government agency to turn to? Call a lawyer? Sue someone in small claims? Try to get the debt rolled up in Town and Country's bankruptcy (assuming we can finally get in touch with their lawyer)? The worst thing Brett has done in this situation is trust the wrong people, and this is debt he truly can't afford.
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posted by cuddles.mcsnuggy at 9:32 AM on December 29, 2008 [1 favorite]