According to information we were able to find at the Federal Trade Commission site (www.ftc.gov), a service contract is a promise to perform (or pay for) certain repairs or services. Sometimes called an "extended warranty," a service contract is not a warranty as defined by federal law.

A service contract may be arranged at any time and always costs extra; a warranty comes with a new car and is included in the original price. The separate and additional cost distinguishes a service contract from a warranty.

Many service contracts sold by dealers are handled by independent companies called administrators. Administrators act as claims adjusters, authorizing the payment of claims to any dealers under the contract. If you have a dispute over whether a claim should be paid, deal with the administrator.

The FTC states that to report contract problems with a service contract provider, contact your local and state consumer protection agencies, including the state insurance commissioner and state attorney general.

If you need help resolving a dispute the FTC suggests contacting the Better Business Bureau, the state attorney general, or the consumer protection office in your area. They say you may also consider contacting law schools in your area and ask if they have dispute resolution programs.

From this information given by the FTC, we would suggest contacting the New York consumer protection agency or NYS Insurance Department for help since that is the state which the service contract or warranty company is located and thus likely the state laws they are regulated by. It is unlikely to will make a difference that you bought the contract over the Internet.

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. You may want to call their toll-free line, 1-877-FTC-HELP (1-877-382-4357), for more consumer help if the remedies above do not help.