Ask Andy: US Fidelis - WMC Action News 5 - Memphis, Tennessee

Reported by Andy Wise

Ask Andy: US Fidelis

40 states' attorneys general are investigating US Fidelis for what they call "unfair and deceptive practices" in the sale of its extended auto warranties.

The St. Louis-based company boasts more than 250,000 customers, despite 1,012 complaints logged in the last three years with the Better Business Bureau.  The bureau gives US Fidelis a "F" rating for everything from poor customer service to misleading advertising. (Here's the BBB's record:  http://www.bbb.org/stlouis/business-reviews/extended-warranty-contract-service-companies/u-s-fidelis-inc-in-wentzville-mo-310016763).

The most common complaint investigated by NBC News is the company's urgent flyers, mailed and designed to look like they're coming from your auto dealer's warranty division.

The mailers breathlessly warn you that your factory warranty has expired or is about to expire.  They say as a "loyal" customer, you "qualify" for a US Fidelis extended warranty.

But the truth is in its fine print:  "...not  affiliated with a dealership or manufacturer."

NBC News reporter Jeff Rossen interviewed US Fidelis CEO Chris Riley about those flyers after Rossen had profiled former employees of the company who said they were taught to mislead consumers about the company's association with auto dealers and manufacturers.

Riley told Rossen the company does not mail the flyers anymore, but in his interview, he said the flyers were designed to connect with a targeted customer base.

"The way that we connect with our customers is to try and find those customers that need to protect their vehicle as it is coming out of a manufacturer's warranty," Riley said in the NBC interview.

Rossen asked Riley about the 40 states' investigations, including the attorney general of US Fidelis's home state of Missouri (see Missouri's allegations here against US Fidelis, aka National Auto Warranty Services, Inc.:  http://ago.mo.gov/newsreleases/2008/030608.htm).

Riley answered, "US Fidelis, at all times, is committed to treating its customers with honesty and integrity."

Generally, I do not recommend extended warranties on vehicles.  I'll admit, I've bought a few, but only one of them benefited me in the long run -- and I would never buy one from a third-party unless that third-party had an iron-clad contract with my car's dealer or manufacturer. 

Most of the time, those companies have no connection whatsoever to your dealer or manufacturer.

If you must shop a third-party warranty company, always check its Better Business Bureau record first (www.bbb.org/us or www.midsouth.bbb.org). 

Consider shopping only dealer-backed or manufacturer-backed extended warranties/service contracts.  That way, you have someone and someplace to go back to and hold accountable.

Even then, make sure there's no dual coverage.  The extended warranty should not duplicate the coverage of the manufacturer's warranty, except to extend that coverage when the manufacturer's warranty expires.

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