Attorney General's News Release

April 14, 2010

Eleven states join Attorney General Koster's call for an independent trustee to run US Fidelis

Jefferson City, Mo. - Eleven states today joined Attorney General Chris Koster's March 11 motion asking the federal bankruptcy court to order the appointment of an independent trustee to take control of US Fidelis.  The states cite a need to protect assets for the company's customers.

According to Koster, the states of Ohio and Washington are joining the motion to seek a trustee on their behalf, as well as on behalf of Iowa, North Dakota, Arkansas, Oregon, Maryland, Wisconsin, North Carolina, West Virginia and Tennessee.

"US Fidelis customers across the nation have complained to their state Attorneys General about the broken promises by US Fidelis," Koster said.  "Now that US Fidelis has filed for bankruptcy, we must do all we can to protect the assets of the company so existing customers can have their contracts fulfilled and customers who are owed money have the opportunity to get it back."

Koster said Missouri will present its motion at a hearing May 26 before the bankruptcy court in St. Louis.  Koster has said his office is concerned that the owners of the company used the business to enrich themselves to the detriment of consumers.  

The Attorney General also has urged a top-to-bottom, scrupulous financial examination of the company, citing concerns regarding explicit business practices explicitly designed to defraud consumers.

Koster is concerned about the business practices of many companies that offer automobile service contracts.  His office filed or settled 12 cases involving independent service contract marketers in 2009.  In addition, Koster has formed the Missouri Auto Service Contract Task Force to look at sales practice guidelines designed to stop auto service contract fraud, the number one complaint to the Attorney General's office in 2009.  The first meeting of the task force will be April 16 at 11:00 a.m. at the Lake Saint Louis Civic Center.