Law firm Quinn Emanuel Urquhart & Sullivan is to file an $80 million class action against a McMillan Shakespeare Group subsidiary offering extended car warranties.

The claim is for a refund to tens of thousands of consumers sold “worthless” products from National Warranty Company when they bought a used car, truck or other machinery, the law firm says.

Litigation funder Vannin Capital and Quinn Emanuel decided to bring the action after the Consumer Action Law Centre highlighted the problems.

“They were concerned that a number of people had bought these worthless financial products and, having paid for them, were not getting any benefit whatsoever,” Quinn Emanuel partner Damian Scattini told insuranceNEWS.com.au.

The claim is likely to be lodged in Queensland next month, although a final decision is yet to be made.

McMillan Shakespeare says the potential claim is said to cover the 2011-15 period, and appears to mostly relate to a timeframe before it became involved in the business.

“Full details of the potential claim are yet to be provided,” it said in a response to the ASX.

The Consumer Action Law Centre says the class action highlights the risks from “junk” products.

“We’ve seen people misled and ripped off by these useless extended warranties for years,” CEO Gerard Brody said.

“You think you’re protecting your car, but if you read the fine print, you’re at the mercy of the warranty company. There’s no guarantee you’ll be covered when you need it.”

Dealer-issued warranties are administered by warranty companies or insurers that are not legally liable if a consumer makes a claim, while often car dealers are also not responsible, he says.

The Australian Competition and Consumer Commission has increased its focus on these products in the past couple of years.