Independent Glass Professionals Association

17719 Pacific Ave. So. #222

Spanaway, WA 98387

 

News Release 

July 24, 2002 

For more information contact: 

Jim MacFarlane, (253) 846-3441

David Smith, (206) 628-6654

Doug Walsh, Asst. AG for Consumer Protection, (253) 593-2904 

 

Olympic Auto Glass Cash Back Program Ruled Illegal 

A King County Superior Court judge has ordered Olympic Auto Glass of Kent to immediately cease it’s marketing campaign offering customers up to $125 Cash Back for replacing their windshield. Judge Sharon S. Armstrong found that the Cash Back marketing offer violated a 1997 Permanent Injunction Agreement signed by Olympic with the Washington State Attorney General and the Independent Glass Professionals Association (IGPA).

The IGPA brought the current legal action against Olympic in September 2000. The trial concluded in late January 2002 and Judge Armstrong issued her ruling in Seattle on July 10, 2002.

The 1997 Permanent Injunction prohibited Olympic from violating the Insurance Fraud Act by offering to waive or rebate all or part of a customer’s insurance deductible as a regular practice. The IGPA argued in this lawsuit that Olympic’s cash back program violated the law and the Injunction.

Under the Washington Insurance Fraud Act, it is illegal for companies to make a regular practice of waiving or rebating all or part of a customer’s insurance deductible. The court found that “over 96% of Olympic’s customers are insured.”

Judge Armstrong wrote that, “by offering to give cash back to each customer, Olympic is essentially rebating some or all of the deductible. Since the most common deductible amount is $100, in most instances the deductible is completely rebated. When the customer sees Olympic’s advertising, he or she knows that the cash back will cover the cost of the deductible, and so the purpose of the insurance deductibles, to discourage frivolous insurance claims, is frustrated.”

Judge Armstrong concluded, “Defendant’s (Olympic Auto Glass) cash back program is another form of illegal insurance deductible waiver.”

The court also ruled that the Cash Back offer violated the Consumer Protection Act that prohibits misleading and deceptive advertising. Judge Armstrong found that “Defendants (Olympic) use of cash quote pricing is misleading and deceptive and a misstatement of the price of services because it suggests the cash back is a refund off a regular price. In fact, the cash quote has been inflated from a regular market price to cover the cost of the cash back, and consumers do not receive the promised benefit of a $125 savings.” 

Judge Armstrong also found that, “Olympic’s pricing was widely distributed in Washington and had the tendency and capacity to deceive a substantial portion of the purchasing public. Misleading and deceptive commercial speech is not entitled to constitutional protection.”

“The IGPA is extremely happy with the outcome of this case,” said David Smith, IGPA legal counsel. “The industry has worked long and hard to establish a standard of honesty in the auto glass industry that consumers can count on. This ruling goes a long way toward that.”

 

Editors Note: Copies of Judge Armstrong’s order and the 1997 Injunction are available by emailing jim@mjmww.com and requesting IGPA Orders.