Attorney General Bob Ferguson joined three other state attorneys general today in announcing that approximately 19,000 consumers nationwide will share more than $9.3 million to compensate them for their problems with U.S. Fidelis, a now-defunct dealer of vehicle service contracts. Checks are going in the mail today for those who filed a claim.
A vehicle service contract provides protection against unexpected or costly vehicle repairs.
“Consumers received a bad deal from U.S Fidelis,” said Ferguson. “My office will go after businesses that mislead consumers and don’t play by the rules.”
U.S. Fidelis deceptively marketed and sold vehicle service contracts for itself and other businesses. It also operated under the name of National Auto Warranty Services and Dealer Services. U.S. Fidelis filed bankruptcy in March 2010.
Attorneys general sue U.S. Fidelis for deceptive business practices
In April 2010, Washington and 11 other states sued the business and its owners over U.S. Fidelis’ deceptive solicitations, illegal telemarketing, robo-calls and misleading TV ads. The states later agreed to settle claims against the owners in exchange for their agreement to turn over their assets to the bankruptcy estate.
Attorneys general increase refunds to consumers
Washington advocated for consumers during the bankruptcy process that resulted in creation of the Consumer Restitution Fund.
Because of the hard work of Washington and other states, every eligible claimant will receive a minimum of $250.
All U.S. Fidelis’ customers were provided restitution fund claim forms in 2012. Checks are going in the mail today to eligible consumers who filed claims. Those who didn’t already file a claim can still do so until January 2015.
Consumers can still file refund claims
The Consumer Restitution Fund will remain open until January 2015. Consumers who have unexpired contracts or money back guarantees, may still file claims. Other claims may be paid, if funds are available. No distribution, however, is guaranteed.
Consumers who have outstanding claims against U.S. Fidelis, and have questions about their claims, or whose contact information may have changed should contact Garden City Group by calling (877) 691-8477. Additional information about the settlement, including frequently asked questions can be found at www.usfbankruptcy.com.
Service contract purchase tips
The AGO recommends consumers follow these tips when considering purchase of a vehicle service contract.
• Insist on seeing a copy of the contract before you make a purchase, if possible.
• Read the contract in detail to see what is covered and what is not. Most industry experts recommend that you purchase an automotive service contract that is exclusionary (lists what isn’t covered), rather than inclusionary (lists what is covered).
• Understand what typical repairs there may be for your vehicle, and what they cost. This will help ensure you buy a vehicle service contract that is right for you and right for your car.
• Beware of contracts that come with a product you must put into your vehicle. You may be buying a vehicle protection product warranty that does not come with any refund rights and may have extremely limited repair rights.
• Check that the marketing company and business providing contract services are registered with the Office of the Insurance Commissioner and are compliant with Washington laws at http://www.insurance.wa.gov/consumertoolkit/search.aspx.
