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The U. S. Fidelis Auto Warranty Problem:
Aftermarket Auto Warranties Reports

Watch Dog Reporting

Recent news indicates trouble on the horizon for some aftermarket extended car warranties. Here are a few alarming reports from the bankrupt US Fidelis Auto Warranty filing. If you know of anyone that has a used vehicle extended warranty with these fail business, they can receive information concerning pro-rated refunds and other contact information at: http://www.usfidelis.com/

You can learn how to check the AM Best Insurance Ratings and Better Business Bureau ratings of any insurance company you have concerns fr including US Fidelis auto warranty here.

Monday, March 1, 2010  |  Modified: Tuesday, March 2, 2010

US Fidelis auto warranty files for Chapter 11 bankruptcy

St. Louis Business Journal - by Christopher Tritto

US Fidelis aftermarket used car warranties filed for Chapter 11 bankruptcy protection Monday, with the brothers who founded the firm owing about $66 million.

The company, which until recently claimed to be the nation’s largest marketer of best extended car warranties, suspended all sales and marketing activity in December amid a barrage of consumer complaints, government investigations and lawsuits.

US Fidelis listed assets of $74.4 million and liabilities of $25.8 million, according to the bankruptcy filing with the U.S. Bankruptcy Court for the Eastern District of Missouri.

Brothers and co-founders Darain and Cory Atkinson and their real estate companies owe US Fidelis about $66 million, according to the filing.

US Fidelis, once one of St. Charles County’s largest employers, now has 109 workers, down from more than 1,000 less than a year ago. The company said it would continue to provide customer service to existing holders of the auto-service contracts it sold. US Fidelis noted all contracts remain valid with third-party insurance and administration companies whose funds are used to pay vehicle service claims and are not affected by the bankruptcy.

Last April, US Fidelis and another automobile extended warranty company each agreed to pay Verizon Wireless $50,000 as part of a settlement over allegations of illegal telemarketing using autodialing. US Fidelis denied any wrongdoing. The Atkinsons face allegations they and their company misled customers and used deceptive sales tactics.

Pressure mounted throughout the summer. In July, BMW sued US Fidelis and alleged it used the carmaker’s name in mailers to mislead customers into thinking the two businesses were affiliated.

Heightened scrutiny and customer dissatisfaction spurred more customers to seek refunds, while fewer new customers became willing to sign on. With company cash flow drying up, the Atkinsons and Riley slashed hundreds of jobs and ultimately suspended new sales.