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BBB Warns of Extended Auto Warranty Companies

07-30-2009 04:11 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: BBB of Eastern North Carolina

/ PR Agency: articulon
Local Complaints Continue Against National Vendor, USfidelis

RALEIGH, N.C. (July 28, 2009)—Better Business Bureau of Eastern North Carolina (bbb.org) announces today it has seen an increase in complaints and inquiries concerning one of the largest auto warranty companies in the United States.

From April 7 through July 20 of 2009, consumers have filed 206 complaints against USfidelis. For the same period last year, consumers filed 132 complaints against the company. In the past 36 months, BBB has received nearly 1,500 complaints against USfidelis, coming from all 50 states. More than 40 complaints were generated in North Carolina within that same period of time.

A consumer in Nash County called BBB to inquire on the company after seeing their ad on television. Similar inquiries and other complaints have been voiced by consumers all over North Carolina, including some Wake County residents.

BBB regularly receives reports and complaints against USfidelis for its misleading, high pressure sales tactics communicated through harassing phone calls and written notices. These notices indicate that the company representatives are from a "Dealer Warranty Division," but the fine print at the bottom denotes they are "not affiliated with a dealership or manufacturer."

Beverly Baskin, president & CEO of BBB serving Eastern North Carolina, notes that the complaint volume against companies offering extended automobile warranties is "astounding." She adds that many extended warranty companies have significant restrictions on repairs they cover, and consumers should clearly understand the warranty coverage before purchasing.

"We continue to receive inquiries and complaints from consumers who have been misled by representatives and advertisements from USfidelis," says Baskin. "It is unfortunate that countless consumers have been left to pay for costly repairs after sending payment after payment and trusting that needed service would be covered."

Attorneys General in at least 40 different states are investigating USfidelis. BBB representatives met with company CEO, Chris Riley on April 7, 2009. At that meeting, Riley said many of the complaints came from persons who took out coverage after noticing problems with their vehicles. He also acknowledged past problems with how USfidelis sold its product and dealt with consumers, calling the company's past practices "deceptive." He said USfidelis had begun a strong effort to change its operations. Riley noted that it is crucial to improve USfidelis' "F" rating with the BBB, in part to convince government officials investigating the company that it was making progress, but locally the pattern of complaints continues to increase.

BBB offers the following advice for dealing with a firm selling extended auto service contracts:
o Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer.
o When considering an extended service contract, insist on getting a copy of a contract that clearly explains all terms and conditions before signing up or providing credit card or other payment information.
o Read your manufacturer's warranty and contact your dealer or manufacturer to ensure you are not purchasing duplicate coverage.
o Consumers can place their phone number on the federal do not call list by visiting www.donotcall.gov. If the consumer is already on the list but continues to receive telemarketing calls, he or she can use the same Web site to report the incident to the Federal Trade Commission.
Additional information on this and other scams is available at www.bbb.org.

# # #

About BBB of Eastern North Carolina:
The Better Business Bureau of Eastern North Carolina is a 501 (c)(6) not-for-profit corporation serving 33 counties in eastern North Carolina. The organization is funded primarily by BBB Accredited Business fees from more than 3,200 local business and professional firms. The BBB promotes integrity, consumer confidence and business ethics through business self-regulation in the local marketplace. Services provided by the BBB include, reports on companies and charitable organizations, general monitoring of advertising in the marketplace, dispute resolution services, and consumer/business education programs. All services are provided at no cost to the public, with the occasional exception of mediation and arbitration. Visit www.bbb.org.

BBB of Eastern North Carolina
5540 Munford Rd., Ste. 130
Raleigh, NC 27612-2655

Media Contacts:
Cindy Stranad
919.232.5008
cindy@articulon.com

Beverly Baskin
919.277.4202
bbaskin@raleigh.bbb.org

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