Despite rising public awareness of problems in the nation’s vehicle service contract industry, consumers continue to tell Better Business Bureau they feel tricked by misleading advertising or duped into spending thousands of dollars for contracts with little or no value.

Typical is a complaint received last month from a Fort Lauderdale, Fla., consumer: “I pay on time and follow all terms of the policy but they won’t cover anything.”

Another consumer, from South Holland, Ill., made a similar claim last month: The company has “fraudulently taken my money with no thought of ever (paying for repairs).”

A consumer from Ladson, S.C., who said she received a misleading mailer from a vehicle service marketer in April, was more blunt: “These guys were slime.”

BBB suggests caution to consumers who may be considering purchasing a vehicle service contract.

In the past 12 months, the BBB has received nearly 800 complaints involving 24 auto service contract companies in the St. Louis area.  While now-defunct US Fidelis has received the biggest number of complaints – 200—three other firms have received at least 60 complaints during the 12 months. Those companies are:

• National Dealers Warranty, doing business under the name Stop Repair Bills, of St. Peters, Mo. Consumers have filed 187 complaints and reports about this company during the 12-month period and 523 in the past 36 months.
• Service Protection Direct or Protection Direct with headquarters in downtown St. Louis. Consumers have filed 76 complaints and reports about the company in the 12-month period and 298 in the past 36 months.
• Car Safe or Dealer Preferred Warranties, of St. Charles, Mo. The company has been the focus of 68 consumer complaints over the 12 months and 167 in the past 36 months.

Each of these businesses has an “F” grade with BBB, the lowest grade possible and all have been the (more…)

A year after the collapse of US Fidelis, the nation’s largest seller of extended auto service contracts, the Better Business Bureau advises customers to remain extremely skeptical of any company marketing similar after-market contracts.

“We saw hundreds of complaints in 2010 involving US Fidelis and similar marketing companies. Many people felt they were coerced and manipulated into buying repair plans that had little, if any, value,” said Kim States, BBB President. “While some of these sellers appear to have made progress in reducing their numbers of complaints, many still have a long way to go.”

US Fidelis, the bankrupt Lake St. Louis, Mo., firm, continued to accrue complaints in 2010, with about 400 nationally, including eight in Tucson. Next in number of complaints is NRRM Enterprises, LLC of St. Peters, Mo., better known as Stop Repair Bills or StopRepairBills.com.  More than 200 consumers have filed complaints against Stop Repair Bills since Jan. 1, 2010.  Many claimed they were pressured into buying service contracts they later discovered did not cover their vehicle repairs.

Stop Repair Bills has an “F” grade with the BBB, the lowest possible. Governments in the U.S. and Canada have taken action against Stop Repair Bills and affiliated businesses.

In 2008, then-Missouri Attorney General Jay Nixon sued six companies, including National Dealers Warranty (now Stop Repair Bills), for using “misrepresentation and deception” to sell vehicle service contracts to the public. Five months later, Nixon settled that case with National Dealers Warranty, with the company agreeing to pay about $30,000 in restitution to consumers and for the state’s costs in bringing the lawsuit.

In November 2009, Missouri Attorney General Chris Koster filed a second lawsuit against Stop Repair Bills, accusing the firm, Gilman and other officers of several violations of state law. The case, amended in November 2010, is pending. Allegations include unlawful telephone marketing practices, selling contracts for unregistered providers and administrators, deceptive sales practices, unlawful merchandising practices, unfair trade practices and insurance fraud. Stop Repair Bills sells contracts nationwide.

On its website, Stop Repair Bills says it sells vehicle service contracts for other companies that administer the plans. Marketers like Stop Repair Bills maintain that they only sell the contracts and they should not be held responsible when claims are rejected.

BBB believes that because the marketer enters into the original agreement with the customer and receives payment, the marketer should have ultimate responsibility.

NRRM, which owns Stop Repair Bills, was formed in December 2009 through a consolidation of National Dealers Warranty and Auto Warranty Protection Services.  At the time of the consolidation, Gilman was president of both companies. Mark Travis was listed as vice president of both firms; Nicholas Hamilton (more…)