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Re-activateA statement on the company's Web site says USfidelis stopped selling auto service contracts, commonly referred to as extended warranties, in December. It says the coverage it already has sold remains in effect.
"Customers who purchased a vehicle service contract can rest assured that their claims are still being adjudicated and paid by the top rated providers," the statement said.Generally, under Chapter 11 bankruptcy reorganization, a company seeks relief from its creditors in an attempt to remain in business. From news reports, it's not clear what the company's plans are.
The Wentzville, Missouri-based company used high-profile national advertising to sell automobile service contracts provided by third parties. Some of its ads featured NASCAR legend Rusty Wallace. According to bankruptcy petition filed in United States Bankruptcy Court for the Eastern District of Missouri on March 1, the company owes Rusty Wallace Racing of Mooresville, NC more than $535,000. The petition listed more than $25 million in estimated liabilities, including numerous "potential refund claims," and more than 74 million in assets. The petition has been posted on the St. Louis Business Journal Web site.
US Fidelis has been the target of hundreds of consumer complaints alleging difficulty in canceling policies and obtaining refunds; misleading company advertising; misleading, high-pressure, or improper sales tactics; a failure to pay for vehicle repairs; difficulty in contacting the company; misrepresented coverage; harassing phone calls; and a failure to remove names from mailing lists.As of March 4, the Better Business Bureau reported that it had received 1,319 complaints against the company of the past 36 months, 76 of which remain unresolved. It gives the company an "F" rating on a letter-grade scale of A to F.
In March 2008, the Missouri Attorney General accused the company, doing business as National Auto Warranty Services Inc., of using deceptive marketing practices and violating the state's Do Not Call law.What to do: Consumer Reports does not recommend buying auto service contracts, advising consumers instead to purchase a vehicle with a top reliability rating and servicing it according to the manufacturer's recommendations listed in the owners manual.—Anthony Giorgianni
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