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For immediate release - Thursday, April 29, 2010.
Contact Bob Brammer - 515-281-6699, Rbrammer@ag.state.ia.us.

A.G. Alleges Fraud by Auto “Warranty” Company called U.S. Fidelis

Des Moines. Attorney General Tom Miller filed a lawsuit Thursday alleging consumer fraud by “U.S. Fidelis,” a St. Louis-area company that used robo-calls and direct mail to sell auto service contracts that were falsely portrayed as if they were warranties offered by auto manufacturers.

“We alleged this company used an intensive campaign of trickery, deception and harassment to mislead Iowa consumers,” Miller said.

Defendants named in the lawsuit are U.S. Fidelis, Inc. (which formerly was known as National Auto Warranty Services, Inc., and “Dealer Services”); Darain Atkinson; and Cory Atkinson. U.S. Fidelis is located at Wentzville, Missouri. [Go to lawsuit petition.]

Miller said U.S. Fidelis was one of the companies that deluged consumers with direct mail and phone calls, including repeated telemarketing calls to consumers on the U.S. “Do Not Call” registry. Much of that abusive marketing ended when the U.S. Federal Trade Commission took legal action last year against the company making “robo-calls” for the companies marketing the so-called extended warranties.

Miller said U.S. Fidelis now is bankrupt and has ceased contacting consumers, but the lawsuit aims to have a court completely prohibit the company and Darain and Cory Atkinson from participating in similar ventures in the future. The lawsuit also seeks civil penalties and reimbursement to consumers.

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More background and detail:

Iowa’s lawsuit was filed Thursday morning at Polk County District Court in Des Moines. Lawsuits also are being filed against U.S. Fidelis today by the attorney generals of ID, KS, NC, PA, OH, WA, and WI, and other state lawsuits are likely.

    Allegations in Iowa’s lawsuit include:

  • U.S. Fidelis’s marketing plan was to sell auto service contracts “by lying to consumers about the identity of the seller, misrepresenting the nature of the products, and engaging in a campaign of abusive telemarketing of consumers,” the suit said.

  • U.S. Fidelis attempted to deceive consumers that their own vehicle’s manufacturer was contacting them to extend the manufacturer’s warranty, when that was not the case.

  • U.S. Fidelis “misled consumers by expressly overstating the scope of coverage and understating or omitting to disclose the many limitations of coverage” in their service contracts, the suit said.

  • U.S. Fidelis conducted “an unprecedented unlawful telemarketing campaign,” the suit said, including many repeat calls to consumers who asked not to be called again and many calls to consumers on the national “Do Not Call” registry.

  • U.S. Fidelis targeted Iowans with misleading mail solicitations and barraged Iowans with telemarketing calls to sell their service contracts,” Miller said.

“We allege that through trickery and by creating a false sense of urgency, U.S. Fidelis deceived consumers into believing they needed to purchase a contract to keep their warranties in place,” he said. “But U.S. Fidelis has no connection to any auto manufacturer, and the product it was selling was nowhere near as extensive as a manufacturer’s warranty.”

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