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Be cautious about vehicle contracts, says Better Business Bureau

January 22, 2012

Since January 2009, the Better Business Bureau has received 52 complaints about companies offering extended warranty contract services — many concerning vehicle service contracts — from consumers residing in the Greater Maryland area.  

“It wasn’t that long ago that BBB received regular calls from motorists complaining about nonstop, recorded ‘robocalls’ to their land and cell lines, telling them their vehicle’s warranty was about to expire,” Angie Barnett, president and chief executive officer of the Greater Maryland BBB, said in a news release. “Some were infuriated, and others fell for persistent and underhanded sales practices alleged against US Fidelis and others.”

Maryland Attorney General Doug Gansler’s Consumer Protection Division joined other states in formally charging US Fidelis. The division alleged unfair and deceptive practices in violation of Maryland’s Telephone Solicitation Act. The company collapsed in late 2009 and filed for bankruptcy in March 2010.

As a result of the number of complaints filed with the Better Business Bureau in St. Louis, home to US Fidelis, that bureau undertook a study of the industry that included a survey of 660 complainants across the country. The study recommended that state and federal authorities be more vigilant and vigorous in prosecuting violators of the law.

The Better Business Bureau advises consumers who are considering buying a vehicle service contract to:

• Always read the contract carefully before agreeing to purchase it. If the seller won’t provide a contract, don’t buy it.

• If you are on a do-not-call list, report any violations to the attorney general’s office or Federal Trade Commission.

• Do the arithmetic. Sometimes the cost of a contract might be more than the car’s value.

• Ask the seller the names and locations of the providers, administrators and insurers. Ask how claims are processed.

Check out all companies involved in the contract at www.bbb.org.

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