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2 Santa Fe, NM, Self-Storage Operators Accused of Insurance Fraud

April 29, 2022

2 Min Read
2 Santa Fe, NM, Self-Storage Operators Accused of Insurance Fraud

The Office of the Superintendent of Insurance (OSI) has issued an order and fines against two self-storage facilities in Bernalillo and Rio Rancho, New Mexico, for allegedly selling unapproved insurance products. 528 Armor Storage and Northern Boulevard Storage, which are owned by New Crescendo LLC (dba Crescendo Self Storage Management), have been charged $120,000 for violating 1,300 Self-Storage Insurance License Act violations, according to sources.

OSI found that the protection agreements sold at 340 Calle De Las Lomas and 3301 Northern Blvd. N.E. as a “Customer Storage Protection Agreement” are insurance products under New Mexico law. The operators allegedly sold the program while unlicensed and carried out unfair insurance practices by charging tenants for it even though they didn’t agree to the purchase, according to OSI. The businesses have been ordered to cease and desist selling it.

The liability disclaimer from the operators impose an insurance requirement and prohibit an insurer’s subrogation rights that are “potentially unenforceable,” according to Russell Toal, superintendent for OSI. He deemed it “unfair or deceptive” for the companies to force consumers into buying insurance. He also said certain statements on the rental agreements were “unfair and deceptive,” the sources reported.

“The OSI takes consumer protection very seriously and will take aggressive action to protect consumers against businesses who fail to comply with the state’s insurance laws,” Toal said.

New Crescendo agreed to pay $60,000 for each property. It includes a $50,000 administrative penalty and a $10,000 penalty for violating the Insurance License Act.

Zaiere Hill, property manager at Northern Boulevard Storage, said he’s been instructed not to charge customers for the protection plan. His understanding was that the company didn’t research the program before introducing it, a source reported. “It’s part of the law or whatnot, at least that’s what they tell us. Every time I do take payments, I make sure I don’t add the protection plan,” he said.

Crescendo acquires, develops and manages self-storage facilities. It operates locations under various names in six states.     

Sources:
LA Daily Post, OSI Takes Action on Self Storage Facilities
Rio Rancher Observer, Two Sandoval County self-Storage Facilities Accused of Insurance Fraud

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