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Vehicle Protection Plans

American Greed: The Extended Car Warranty Scam

In July 2014, American Greed did a feature story on auto warranty scams perpetrated by US Fidelis back in 2006.

While this American Greed episode makes for compelling viewing, it fails to appropriately discuss how industry members have since taken steps to protect consumers and deter bad actors like US Fidelis (previously incorporated as National Auto Warranty Services) from joining the industry.

Consumers should be aware that the Vehicle Protection Association (VPA) is an industry trade association that represents over 50 companies that help consumers to protect their vehicles by providing vehicle service contracts. We serve as an industry watchdog to make sure that consumers are not being misled by unethical vendors. Our members have embraced our Standards of Conduct, which are designed to protect consumers and maintain the integrity of our industry.

If you're reading closely, you'll notice that our members provide "vehicle service contracts," not "extended auto warranties." The terms "extended car warranty" and "extended auto warranty" are misleading terms, and consumers should be wary of any vendor that uses these phrases. A warranty is issued by the original manufacturer, and, accordingly, it cannot be extended or renewed by a third-party company.

No VPA member will use these phrases. If they do, there is a mechanism for consumers to report the violation to the VPA. Violating members, pending an investigation, are then subject to losing their VPA membership. To ensure that you are working with an ethical company, we strongly recommend that consumers work only with VPA-certified vehicle service contract companies.

Industry Condemns the Unethical and Illegal Marketing Practices Featured in American Greed

In the American Greed story on US Fidelis, consumers receive misleading notices that tell them their auto warranties have expired when in fact they have not. US Fidelis also engaged in an illegal telemarketing practice, known as robo-dialing. The VPA and its members condemn, and will not tolerate, this abuse of consumer trust and blatant violation of the law.

These deceptive tactics date back to 2006 and shocked those industry members who play by the rules and treat customers right, delivering a valuable product that allows consumers to be protected against unexpected car issues. In addition to putting a number of measures in place to protect consumers, the VPA has always supported the criminal prosecution of US Fidelis and anyone else who violates the law. Here are a few of the many press releases we put out supporting these efforts:

Key Takeaways for Consumers

Protecting your investment in your vehicle is a smart move, and a vehicle service contract helps you to do that.

Although American Greed accurately portrayed the unethical and illegal conduct of US Fidelis, these actions occurred several years ago and are not representative of the industry. The industry strongly condemns such business practices and has taken numerous steps to prevent firms like US Fidelis from entering the market.

To ensure that you are working with a reputable vendor, we strongly recommend that you choose a VPA certified company.

Most importantly, avoid firms that are not VPA members. Firms that are not VPA members should be viewed skeptically, as they are not required to abide by the VPA Standards of Conduct, an ethical code of conduct established to protect the rights of consumers who purchase auto service contracts.

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