(Phoenix, Ariz. – January 11, 2005) Arizona Attorney General Terry Goddard today announced an agreement with State Farm Mutual Insurance Company to compensate consumers who unknowingly purchased vehicles with questionable titles after the insurance company admitted it had failed to properly research those titles.
Goddard joined the District of Columbia and 48 other state Attorneys General in this agreement, which will return $40 million nationwide to consumers who purchased vehicles with dubious titles. State Farm conducted an internal review that showed the company was unable to confirm it had properly titled vehicles it had taken ownership of due to damage or theft.
“This agreement compensates consumers who depended on the seller to provide a vehicle with a clean title,” Goddard said. “I hope this agreement will encourage other companies to step forward when necessary, take responsibility, improve practices, and make things right for consumers.”
Once State Farm completes its research, about 30,000 consumers nationwide may be eligible for payments. The payment amounts will be based on various factors including the vehicle’s value and the number of people who participate in the compensation program. Most payments are expected to range from $800 to $1,850.
State Farm also agreed to pay the expense of identifying the vehicles, tracing current owners, taking claims from owners and making compensation payments. Consumers who complete a claim form and are approved will receive a compensation payment from State Farm later this year or early 2006.
Under the agreement, State Farm will work with the Arizona Departments of Motor Vehicles to determine specific vehicles affected by this settlement. Vehicle owners will receive a letter from the Arizona Attorney General’s Office and a claim form to complete and return to an independent Claims Administrator company. It is expected that current owners of eligible vehicles will be contacted by Fall 2005, after the identification process is completed.
State Farm also is making a payment of $15,000 to the Arizona Attorney General’s Office to be used for consumer education and public protection. All states but Indiana signed onto this agreement. Indiana is working on its own agreement with State Farm.
The agreement was filed Monday in Maricopa County Superior Court and signed by Judge Colin F. Campbell.