St. Louis, Mo., Jan. 6, 2011
– A year after the collapse of US Fidelis
, the nation’s largest seller of extended auto service contracts, the Better Business Bureau (BBB) 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 in the St. Louis region. Many people felt they were coerced and manipulated into buying repair plans that had little, if any, value,” said Michelle Corey, BBB president and CEO.
“While some of these sellers appear to have made progress in reducing their numbers of complaints, many still have a long way to go,” Corey said.
US Fidelis, the bankrupt Lake St. Louis, Mo., firm, continued to lead area marketers in complaints in 2010, with about 400. Next in number of complaints is NRRM Enterprises, LLC,
of St. Peters, Mo., better known as Stop Repair Bills
. 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. Rudge Gilman
, president of Stop Repair Bills, has listed recent addresses in St. Peters, O’Fallon and St. Paul, Mo.
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.
“I trusted them,” said an administrative assistant from Glenwood, Ill. Her five-year-old car was repossessed last fall when a contract purchased through Stop Repair Bills failed to pay for thousands of dollars in repairs. She said repairs should have been covered under the terms of her agreement. A claims administrator told her payment was denied because the company could not verify her vehicle maintenance records. She said she supplied everything that was requested. “It has been a nightmare,” said the woman. Her round-trip work commute that took an hour by car now takes four hours on public transportation.
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.
The 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
was listed as secretary of both companies. Richard Brettelle
was listed as treasurer of Auto Warranty Protection Services. NRRM has not reported officers or board members.
Stop Repair Bills, 339 Mid Rivers Mall Dr., has advertised extensively on radio and in national TV commercials. In the 2009 baseball season, its advertisements could be seen at the top of scorecards sold at Busch Stadium.
“Join thousands of vehicle owners who no longer worry about costly repair bills on their automobiles,” said one of the ads. “Save thousands now on auto repair bills,” says the company’s website.
Several consumers interviewed by the BBB, however, said they did not believe the company lived up to its promises.
A Walterboro, S.C., school bus driver told the BBB that he bought a repair contract from the company in November 2009 after seeing a TV commercial. He said a salesperson promised him that if there was any problem with his car, it would be covered, referring to the coverage as “bumper to bumper.”
In February 2010, 16,000 miles after purchasing the contract, his car began having serious transmission problems, and he made a claim to his contract administrator. The claim was denied because the adjuster determined it was a pre-existing problem. The man said he has to pay $1,500 in repair bills out of his own pocket. “They want the money, but they don’t want to do anything if you have a problem.”
A man from Ontario, Canada, who purchased a contract through a Canadian firm run by Stop Repair Bills officials, said he paid about $3,400 for coverage of his Chevrolet Impala. He described his maintenance of the car as “meticulous,” but said the engine failed in November 2010, and he submitted a claim for repairs. Despite a mechanic’s claim that the car’s engine block was cracked, the claim was denied. The customer said he was told the cause of the failure could not be positively determined. He described his contract as “a piece of Swiss cheese, full of holes. In hindsight, maybe I should have known better.”
A St. Louis woman said her claim was paid only after she got a local TV reporter involved in her story. Another St. Louisan said he was given a “run around” for more than two months before his claim was finally paid. “It was a horrible experience,” he said.
A retiree and stroke victim from Walworth, Wis., said his $1,500 claim for air conditioning repairs was rejected because the adjuster ruled it was a pre-existing condition, even though the air had operated well for two months after the man bought the contract.
A single mother from Fremont, Calif., said she filed a repair claim when her car began shaking on the highway and she could not get it to go more than 20 miles an hour. She said she was told the claim was denied because the car had never stopped completely. She said she now has to pay for rides to her two jobs, and is unable to pay the $5,700 in needed repairs.
A BBB investigator who called the company posing as a prospective customer told a salesman he did not have Internet access and asked to be sent a copy of a contract before agreeing to purchase coverage. The salesman refused, insisting that Stop Repair Bills could only send out a “live” contract after receiving a down payment. He said customers had 20 days to cancel after inspecting the contract.
The investigator also inquired about the BBB grade for Stop Repair Bills, but the salesman instead reported the A + grade for Consumer Care Direct, a contract administrator. Asked again about the BBB’s grade of Stop Repair Bills, the salesman said he did not know that information, but once again reported the grade of Consumer Care Direct.
Michael Carter, attorney for Stop Repair Bills, said in a phone interview that he believes Stop Repair Bills is a “responsible company that tackles every single complaint that comes its way in a timely manner.” He said the vast majority of complaints with the BBB have been resolved and the company is nearing a resolution in its legal battles with the Missouri attorney general’s office.
He also said he believes the company’s “F” grade is unfair and said the grade, “at worst,” should be a C- or a D. On Dec. 27, the BBB extended an invitation to Stop Repair Bills officials to meet to discuss the pattern of complaints. The company initially said it could meet on Feb. 23 but later said it would meet “if you can assure us that our grade will be raised.” The BBB declined the offer.
The BBB urges consumers never to enter into any contract agreement without first carefully reading the contract and understanding exactly what is and what is not covered. Several consumers have told the BBB that promises were made during telephone sales calls that they later learned were not a part of their contracts.
The BBB also offers the following advice to persons trying to decide whether to purchase after-market service contracts:
- Never give personal or credit card information to anyone over the phone or via e-mail unless and until you are ready to purchase a contract.
- Do not be pressured into making an immediate decision. Beware of sales offers that require you to buy immediately in order to qualify for the best rate.
- Beware of any claims that you will receive “total” or “bumper to bumper” coverage on your vehicle. That does not necessarily mean that every problem with your car will be covered.
- Read your manufacturer’s warranty and contact your dealer or manufacturer to make sure you are not purchasing duplicate coverage.
- Check the contract seller’s Reliability Report with the BBB by going to www.bbb.org or by calling 314-645-3300. Do not be misled by marketers who suggest that you check the Reliability Report for contract administrators and not the brokers themselves.
Contacts: Michelle Corey, President & CEO, 314-645-3300, firstname.lastname@example.org, or Bill Smith, Trade Practice Investigator, 314-645-3300, email@example.com