A new state law in Florida makes dealers responsible in certain circumstances for maintaining records proving that customers who were supposed to receive a refund on a canceled extended-service contract actually got the refund.
Fla. dealers soon to track service contract refunds
The law eliminates a gray area in the existing law, according to the Service Contract Industry Council, a trade group based in Tallahassee, Fla.
Under the old law, service contract administrators were legally responsible for providing refunds. The administrator could pay the customer directly or choose to pay the refund via the selling dealer. But if the dealer handed over the refund, there was no formal requirement for the dealer to provide proof that the customer got the money.
That meant that if and when the state Office of Insurance Regulation audited a service contract administrator, the administrator might not be able to prove that the required refund had reached the consumer.
The new law is expected to go into effect July 1.
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