More than three months after its new chief executive officer promised sweeping changes in the way U. S. Fidelis does business, the Better Business Bureau (BBB) continues to receive complaints from dissatisfied customers about the Wentzville company.
In fact, the number of complaints reported to the BBB shows an increase since April 7 – the day CEO Chris Riley met with the BBB and said the company’s owners had given him an “open checkbook” to institute reforms and “clean up everything” with the company. Riley also said it was crucial to improve U. S. Fidelis’ “F” grade with the BBB, in part to convince government officials investigating the company that it was making progress.
U. S. Fidelis, owned by brothers Darain and Cory Atkinson, is the largest of several extended auto service contract brokers operating in the St. Louis area. The company sells vehicle repair contracts throughout the United States, including the St. Louis area. The company has said it formerly used telephone solicitations and direct mail to attract customers, but in recent months has relied solely on TV and internet advertising.
From April 7 through July 20 of this year, consumers filed 206 complaints against U. S. Fidelis. For the same period last year, consumers filed 132 complaints against the company. In the past 36 months, the BBB received nearly 1,500 complaints against the company. It has an “F” grade, the lowest grade possible.
Many of the recent complaints to the BBB are similar to those filed against the company a year earlier. Customers allege problems getting reimbursed for repairs, problems canceling contracts, misleading sales practices and problems in contacting company representatives. In one recent complaint, a customer said he had phoned the company repeatedly about receiving payment for a repair, but received no response. Another said he called the company about a transmission repair and was placed on hold for 30 minutes before he was transferred to a voice mail.
Michelle Corey, president and CEO of the St. Louis BBB, said the BBB and consumers have been waiting patiently for U. S. Fidelis to make good on its promise to improve its relations with its customers. “We have told the company repeatedly that the proof is in the pudding. When we see their complaints drop, we’ll know then they are making progress. So far, we haven’t seen that.”
The April meeting involved representatives of the BBB, Riley, and Dan Lo Iacoho, vice president of consumer relations for U. S. Fidelis. Lolacono is described as president of a Kansas City area mergers and acquisitions company on that company’s Web site. Riley has worked as a broker for that company.
At that April meeting, Riley said many of the complaints came from persons who took out coverage after noticing problems with their vehicles. But he also acknowledged past problems with how U. S. Fidelis sold its products and how it dealt with consumers, calling the company’s past practices “deceptive.” He said U. S. Fidelis had begun a strong effort to change its operations. He said the company was setting up a separate division to handle customer relations and address complaints and said the company was about “two weeks away” from finalizing a proposal to a group of more than 40 state attorneys general investigating extended vehicle service contract companies. To date, no announcement has been made regarding a U. S. Fidelis proposal and the investigation is continuing.
On March 20, Riley posted a “written pledge” to company customers on the
U. S. Fidelis Web site. “We are committed to treating our valued customers fairly and with complete honesty,” the statement said. “When customers bring concerns to our attention, we work hard to resolve them.” In a U. S. Fidelis statement, the company said it paid out $20 million in claims in 2008.
Several consumers filing complaints with the BBB said they were frustrated by attempts to get reimbursed on vehicle repairs they believed should have been covered by contracts sold through U. S. Fidelis salespersons.
A man from Edgewood, Tex. told the BBB that he had purchased an extended service contract for his 2002 Chevrolet Silverado truck in December 2006. The cost of the coverage was $2,900. He said that when he attempted to get the company to pay $600 for repairs to a leaking hydrobooster in June of this year, U. S. Fidelis denied the claim saying the truck was driven commercially. “We have never used it commercially,” the man’s wife told the BBB. “We only use it to go to the store, or to visit family.” She said the family was forced to pay for the repairs themselves, even though they believe the work should have been covered. “My husband said, ‘I wish I’d never taken it (the contract) out,’ ” she said. “We definitely would not recommend them. They did not tell us the truth.” After the man filed a complaint with the BBB, the company refunded all of the coverage payment.
A woman from St. Louis said she paid $2,275 for an extended service contract for her vehicle in early February of this year. In June, a repair facility told her she needed $2,500 in repairs, but U. S. Fidelis told her the claim would not be covered. After she contacted the BBB, the woman said U. S. Fidelis offered to refund most of the money she had paid for the contract.
A social worker in Hamilton, Ohio said she purchased an extended service contract on a 2004 Malibu in July 2007. Over the next two years, she said, she filed three claims totaling $1,400, none of which was paid. When she canceled her contract in April 2009, she said she initially received a $376 refund from the $1,213 in payments she had made. After contacting the BBB, she received an additional $514.
The BBB offers the following advice for dealing with a firm selling extended auto service contracts:
· Never give personal information, including Social Security, bank or credit card numbers, over the phone to an unknown telemarketer.
· 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.
· Read your manufacturer’s warranty and contact your dealer or manufacturer to ensure you are not purchasing duplicate coverage.
· 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.
· Consumers should check out a company at www.bbb.org or by calling (314) 645-3300.