General Gansler Sues Deceptive Auto Warranty Marketer
Charges Allege Deceptive Claims Regarding Auto Warranty Plans
MD ( August 16, 2010) -Attorney General Douglas F.
Gansler announced today that the Consumer Protection Division
has charged a Missouri company, U.S. Fidelis, Inc., - formerly
known as National Auto Warranty Services, Inc. and having done
business as Dealer Services - and the company’s owners,
Darain Atkinson and Cory Atkinson, with engaging in unfair
and deceptive trade practices and violating Maryland’s
Telephone Solicitations Act. The Act prohibits businesses from
charging consumers for goods or services that are sold over
the telephone until the consumers have signed contracts setting
forth the terms of their purchase.
The Division’s charges allege that the company offered and
sold auto repair warranties that claimed to extend the existing
manufacturer’s warranty and provide comprehensive “bumper-to-bumper” coverage.
The cost of the warranties ranged from $500 to $2,000. The Division
alleges that the warranties did not extend manufacturer warranties;
instead, they provided only limited coverage from a third-party
insurer. According to the Division’s charges, when consumers
made claims under these warranties, they were frequently denied
because the insurer claimed the repair was excluded.
“Before purchasing an extended warranty, consumers need
to be armed with all the facts,” said Attorney General Gansler. “Auto
repair warranties can be costly and may provide very little coverage
in return for their expense.”
The Consumer Protection
Division advises consumers not to do business with any third-party
warranty company that claims it can extend
a manufacturer’s warranty. Only vehicle manufacturers can
extend the manufacturers’ warranties on the vehicles they
The Division is seeking
an injunction to stop the company’s
deceptive advertising and sales practices, as well as payment of
restitution, penalties and costs. A public hearing on the charges
is scheduled for October 19, 2010 at 9:30 a.m. at the Office of
Administrative Hearings, 11101 Gilroy Road in Hunt Valley. Consumers
who wish to contact the Consumer Protection Division regarding
this matter may call (410) 576-6577.