Extended car warranty company US Fidelis already stopped selling new car service contracts and laid off over half of their staff at the end of 2009, and has now filed for Chapter 11 bankruptcy protection.
Remember US Fidelis, one of the nation’s leading companies in the useless auto warranty market? Since the company’s anti-consumer practices were uncovered this spring in a Today Show exposÃ©, they haven’t been doing very well. The company has laid off over half of its employees, and now has stopped selling new service contracts altogether.
Auto service companies in St. Louis have found a way to avoid issuing refunds when customers cancel vehicle-protection contracts: by selling warranted vehicle additives in place of service contracts.
U.S. Fidelis, the auto warranty company that’s currently being investigated by 40 state attorneys general for questionable business practices, has hired the law firm headed by former U.S. Attorney General John Ashcroft. The firm won’t represent the company in litigation, but is supposed to provide an internal review of their practices. They’ll also provide draping cloths for any immodest statuary, and wiretap kits for employees of interest. Hey, it’s hard to do topical humor on someone who’s been out of office for 4 years.
The Today show recently aired a terrifically entertaining exposé of US Fidelis, one of the biggest companies behind the auto warranty racket that you’ve probably encountered via junk mail, telemarketing, or even on TV. They start by looking at an individual who spent $3,180 on one of their auto warranties only to be left stranded when her car overheated and they refused to pay.