When condemning the way extended auto-service contracts are sold over the phone, regulators and consumer advocates often refer to a pattern of deceptive — even fraudulent — business practices.

But another pattern may better explain how the industry dominated St. Louis, reaping huge profits despite mounting consumer complaints and rising pressure from authorities. It's a trend often seen in the drug trade: When the heat comes down on one operator, maybe even forcing its closure, another pops up to scoop up the share of the market left behind — with many of the same employees, using the same practices.

The phenomenon explains why dozens of service-contract companies have opened and closed here in the past decade. The call centers can be unbelievably profitable, and the rewards tend to land with the owners. In our area, they haven't been exactly shy in flaunting their Ferraris and mansions. Nor did their cash-flashing escape the notice of their best call-center workers.

These employees quickly learned the call center's sales secrets. And in the world of service-contract marketing, you don't need a lot of start-up money to hang out your own shingle. Pretty soon, they launched their own companies — and bought their own Italian sports cars, motivating another generation to do the same.

Other patterns emerged, too. Because the start-up companies were spawned from the boiler rooms of the established service-contract peddlers, questionable sales tactics spread like diseases, growing from isolated infractions to industrywide abuses.

Sales scripts from rival companies included virtually identical passages — because both were lifted from the playbook of another company, which itself might have been smuggled from the office an earlier firm.

In the last two years, I've interviewed more than 20 former call-center workers from several different firms. They told similar stories of how they were trained to deceive. They'd tell consumers that the factory warranties on their cars had expired — when they hadn't — or that their firms were affiliated with an automaker or dealer — which they weren't. All repairs were covered, they told their marks, which they wouldn't be.

Many of the St. Louis companies also ventured into the world of illegal telemarketing. Using random-dialing machines, they'd call consumers' cell phones and solicit people who registered their numbers on do-not-call lists.

When the ranks of ticked-off customers got too big — when lawyers started threatening class-action lawsuits or regulators hinted at a crackdown — firms started changing their names, or shutting down only to reorganize as a "new" company.

Other companies responded to criticism by pledging reform — and failing to follow through.

In 2008, two local service-contract sellers settled suits by then-Attorney General Jay Nixon by paying fines and agreeing to follow consumer-friendly tactics. It seemed a victory for consumers, at least until 2009, when Nixon's successor — Chris Koster — lobbed new consumer-fraud allegations in suits against the same firms.

That same year, Wentzville-based US Fidelis patted itself on the back for supposedly having discontinued its worst practices. And yet consumer complaints kept pouring in as new shady practices came to light. (The company filed for bankruptcy on March 1.)

By April, Koster had sued 10 area service-contract companies, and he seemed plenty aware of the patterns defining the service-contract industry here. So many new companies were starting, folding and reopening that he found it virtually impossible to regulate the industry through litigation. New state laws were needed, Koster said.

On Tuesday, his office released recommendations for new regulations, including making service-contract sellers obtain licenses that could be yanked by regulators if companies employed fraudulent, coercive or dishonest practices.

Another recommendation comes in response to consumer complaints that they never knew their coverage was riddled with exclusions — because companies never sent the paperwork. Companies would be required to send written contracts to consumers within 30 days of an over-the-phone purchase.

State Sen. Scott Rupp, R-Wentzville, this week introduced a bill that incorporated most of Koster's recommendations.

If Rupp's bill becomes law, regulators will have to stay vigilant.

Missouri's service-contract sellers didn't become a national embarrassment without learning a thing or two about avoiding official scrutiny. After all, it's taken legislators nearly a decade to address the problem.