On 23 April 2025 a class-action complaint in San Francisco Superior Court (CGC-25-624694) charges cross-border warranty provider Xcotton Co. with selling and administering extended “service contract” plans to Californians without the Service Contract Administrator registration the state demands.
If the court certifies the statewide consumer class, every purchaser since 2021 will be swept into the case unless they opt out, exposing Xcotton to refunding all collected premiums and facing an injunction that halts further sales until it is properly licensed and its contract forms are on file.
Merchants that embedded Xcotton’s protection plans could be subpoenaed for sales records and may ultimately shoulder chargebacks, customer-service costs, or contribution claims should restitution be ordered, making rigorous partner-license checks an immediate priority.
California Business & Professions Code § 9855.1(a) flatly states that “it shall be unlawful for any person to act as a service contractor in this state unless that person first registers with the bureau.” Section 9855(b) then details the regulated work: a “service contract administrator” is any party that “performs or arranges the collection, maintenance, or disbursement of moneys to compensate any party for claims or repairs” and also “(1) providing service contract sellers with service contract forms; (2) participating in the adjustment of claims arising from service contracts; (3) arranging on behalf of service contract sellers the insurance required by Section 9855.2.”
Reference Links:
Reference Link 1: San Francisco Superior Court Legal Document Disclosure Page
Reference Link 2: Complaint Download Link
Reference Link 3: California License Query Official Website
