Consumers in all 50 states report company used misleading tactics to sell vehicle service contract of dubious value

Consumers across the United States are alleging that Wentzville, Missouri-based US Fidelis, a company touting itself as “America’s leading provider of extended auto warranties,” pressured them into buying expensive and unnecessary vehicle service contracts from which they received little or no benefit.

In the past three years, BBB has received more than 33,000 inquiries and more than 1,200 complaints and reports from consumers expressing dissatisfaction with US Fidelis or its services.

Consumers say that in some cases they spent thousands of dollars for extended warranties and yet still ended up paying thousands more for repairs that were not covered under plans sold by US Fidelis.

A number of state attorneys general have also taken complaints from angry consumers alleging the company’s business practices are unethical and misleading.

“The sheer volume and ongoing pattern of the complaints involving US Fidelis are nothing short of astonishing,” said Fred T. Elsberry, Jr., president and CEO of the BBB Serving Metro Atlanta, Athens & Northeast Georgia. “We continue to get reports from consumers saying they have been pressured or misled into buying warranty contracts they don’t want or don’t need, and many others tell us they’ve been left holding the bag when the claim-processing company refused to pay for costly vehicle repairs.”

US Fidelis calls itself a “faith-based company” with a “commitment to treating every customer with honesty and integrity.” Its logo, topped by a shining halo, can be seen in national television commercials.

US Fidelis is also a primary NASCAR sponsor of the No. 66 Chevrolet Impala SS, participating in 2009 NASCAR Nationwide Series events and owned by 1989 Sprint Cup champion Rusty Wallace, owner of Rusty Wallace Racing, LLC (RWR).

The company – previously operating under the names Dealer Services and National Auto Warranty Services – is owned by Darain and Cory Atkinson, two brothers from St. Charles County, west of St. Louis. Chris Riley was recently named the company’s chief executive.

Records show the company, founded in early 2003, sells extended vehicle service contracts across North America. US Fidelis’ TV and Internet commercials ask car owners to call a toll-free phone number for information. The company also has solicited customers by mail and by phone, and BBB notes consumers are especially critical of letters and postcards that appear to be associated with their manufacturers’ warranties. Riley has stated that the company has recently stopped making outbound telemarketing calls.

The nature of complaints against US Fidelis ranges from rude and uncooperative sales representatives to the company’s refusal to provide consumers with copies of coverage contracts before purchase. Some consumers allege contracts were written to make it extremely difficult to obtain payment for repairs. Others said repairs they thought should have been covered were not.

Following are examples of US Fidelis’ practices provided to BBB by customers.

A letter sent by US Fidelis earlier this year to a man in Westerville, Ohio, is titled, “2003 Buick Regal Owner Notification” and opens by saying:

“Our records indicate that the factory warranty on your vehicle has expired or may be expiring soon. As a loyal Buick owner, you qualify for extended vehicle coverage of up to six additional years or 140,000 miles. Only your vehicle qualifies for this program.”

The letter lists several expensive repairs said to be covered under an extended repair contract and states, “due to the nature of this program, we can only authorize your vehicle for 72 hours from the receipt of this notice.”

A woman in Philadelphia said she received a telephone call informing her that the warranty was about to expire on her Hyundai. She said she bought the contract because she was convinced she was speaking with a manufacturer’s representative.

A woman from Mission, Texas, said a mailing she received in November 2008 stated the manufacturer’s warranty on her 2006 Chevy Malibu was about to expire. She called US Fidelis and asked that more information be sent. Soon after the call, she noticed the company had made two unauthorized withdrawals from her bank account — despite the fact that she claims she never gave out her bank account number — totaling about $650.

A suit filed by the Missouri attorney general against National Auto Warranty Services (US Fidelis) is still pending in St. Charles County, Mo. In papers filed with the court, the firm denied misrepresenting its products or deceiving customers.

The attorney general claimed the company violated the Missouri No Call Law, failed to inform consumers that it was not affiliated with the dealers or manufacturers of the vehicle and that it was offering to sell motor vehicle extended service contracts instead of warranties.

BBB offers the following advice for dealing with firms offering extended auto warranty contracts:

• Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer.

• Read your manufacturer’s warranty and contact your dealer or manufacturer to ensure that you are not purchasing duplicate coverage.

• Consumers can place their phone numbers on the Federal Do Not Call List by visiting www.donotcall.gov. If a consumer is already on the list but continues to receive telemarketing calls, he or she can use the same website to report incidents to the Federal Trade Commission.

• To find trustworthy auto warranty companies, consumers can check out BBB Reliability Reports online and free of charge at www.bbb.org.

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