Missouri’s top prosecutor thinks Missouri has become the “silicon valley” for extended automobile warranty fraud. The next step might be tougher regulation.
Some of the half-dozen companies sued for fraudulent extended vehicle warranty operations are described by Attorney General Chris Koster as spinoffs of U.S. Fidelis, considered a giant in the vehicle warranty industry. U.S. Fidelis was sued by former Attorney General Nixon last year.
Koster, who became Attorney General in January, says that suit has not cleaned up the industry which he says is “still rife with fraud in far too many instances.”
While he’s working in the courts, Koster also is considering some work on the issue with the legislature.
“For a long time the legislature did not police these waters, and then a couple of years ago they put in some regulation. My personal feeling is the regulation has not gone far enough. I would like to talk to legislative leaders and see if they would be interested in reexamining this. Police is made in the General Assembly. All we can offer is good ideas,” he says.
Nixon’s complaint against U.S. Fidelis in March 2008 charged deceptive marketing and violation of telemarketing laws. Koster made it a class action lawsuit last April..
Koster says companies that peddle these warranties need to understand they’re getting into dangerous waters and need to be “on their toes” if that’s a direction they want to go.