thursday, april 9, 2009, 2:58pm cdt | modified: Thursday, april 9, 2009, 4:47pm
thousands complain about u.s. Fidelis


St. Louis Business Journal - by kelsey volkmann

A Wentzville, Mo., company that touts itself as “America’s leading provider of extended auto warranties” is facing a storm of criticism from consumers nationwide who say they were misled and pressured into buying unnecessary vehicle service, the Better Business Bureau said Thursday.

In the past three years, the BBB has received more than 1,100 complaints and more than 33,000 inquiries from all 50 states about U.S. Fidelis, the nonprofit membership organization said.

Michelle Corey, president and chief executive of the BBB of Eastern Missouri and Southern Illinois called the volume and ongoing complaints against U. S. Fidelis “nothing short of astonishing.”

“We continuously are receiving reports from consumers saying they have been pressured or misled into buying warranty contracts they either don’t want or don’t need, or have been left holding the bag when the claim processing company refuses to pay for costly repairs,” she said in a statement.

Some of the cases involve seniors and people on fixed incomes who feel they were misled or pressured into signing up for plans often costing thousands of dollars.
For its part, U.S. Fidelis said it stood by its product and said that customers who bought programs from the company received more than $20 million in paid-out claims during 2008 alone.

U.S. Fidelis said the complaints against it represent "less than 0.3 percent of our customer base."

"Like any business, we have some customers who have issues with our company," the company said in a statement. "And, when these are brought to our attention, we work hard to resolve them. In fact, we have been working with the Better Business Bureau to ensure that all of the customer concerns are resolved, including some that were inaccurately filed and related to other companies."

Complaints about U.S. Fidelis and other Missouri-based warranty companies have continued after a lawsuit filed in March 2008 by the Missouri attorney general’s office. In papers filed with the court, the firm denied it did anything to misrepresent its products or deceive customers.

U.S. Fidelis said it has 1,100 workers, making it the second-largest employer in Wentzville.

The company, which previously has been known by the names Dealer Services and National Auto Warranty Services, is headed by brothers Darain and Cory Atkinson of St. Charles County.

"We are the leader in a very young industry and firmly believe that the legislative and regulatory oversight of our industry needs to catch up with the market," U.S. Fidelis said. "That is why we are actively involved in supporting legislative and regulatory changes that will protect consumers from companies that may not share our commitment to excellence. And, we are already making changes to tighten up the way we communicate with our customers, including recording all phone calls to ensure customer quality is adhered to at all times."

Recently, Chris Riley was named chief executive of the company. Records reviewed by the BBB show the company, founded in early 2003, sells extended vehicle service contracts throughout much of North America.



kvolkmann@bizjournals.com