Fidelity Warranty ServicesStiffs policyholders on claims

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Verified customer

First, understand who this company is. Fidelity Warranty Services (and Courtesy Insurance Company) is essentially owned by Southeast Toyota or “SET.” SET is the company that holds the monopoly on all rights to Toyota franchising south of Maryland and east of Texas. Said another way, SET is essentially the ‘boss’ of all the individual Toyota dealerships in the Southeast region (since they can take away their franchises). The street address for Fidelity Warranty Services (and Courtesy Insurance Company) is Jim Moran Boulevard in Deerfield Beach, Florida. Jim Moran is the original CEO of SET … which is based in Deerfield Beach, Florida. Get it?

Why this concerns you is that, if you buy a Fidelity Warranty Service product from a Toyota dealership in that region to protect a vehicle you bought at a Toyota dealership in that region, when it comes claims time, you will be asking that Toyota dealership to help you make a claim against its own ‘boss.’ I wish you good luck on that one. Your premiums basically went right on into SET’s pockets (less the sales commission). Then when/if it does have to pay out, SET is essentially a ‘self-insurer’, paying only the volume wholesale rate for parts … and likely paying its captive dealerships for labor at a vastly reduced price. Nice racket, eh?

That conflict of interest is in addition to the unfortunate fact that insurance companies often tend to try to wiggle out of paying valid claims anyway. But in the situation described above, you won’t even have the dealership on your side to advocate your valid claim.

According to many Internet complaints, Fidelity is quite adept at denying claims. The Fidelity contract IS short and written in plain English, so the average person can read it very, very carefully. (I didn’t.) Do so - that’s YOUR responsibility and Fidelity has made it easy for you to read it. You will find it filled with carefully-crafted clauses. Many are quite fair. However there are a number of clauses that will pretty much allow Fidelity a thinly-veiled excuse to deny whatever claim it feels like denying.

Here’s one: You are not covered for “the failure of a covered part due to a gradual reduction in operating performance as a result of normal wear and tear” after 50, 000 miles. If a part fails after 50, 000 miles, well that’s just normal for it to wear out, right? Claim denied at will.

Or how about this one? You are covered only if the failure is due to “faulty workmanship or materials supplied by the original vehicle manufacturer.” Did that turn signal stalk break right off in your hand? That’s not faulty workmanship, you broke it, you klutz. Claim denied at will.

And here’s some other items specifically excluded by contract under Fidelity’s tip-top “Platinum” coverage - which the policy salesman will try to sell as protecting everything but the kitchen sink … body parts & body panels & molding & door handles & locks & glass & lenses & paint (that pretty much excludes the exterior), trim & upholstery & bright metal (that pretty much excludes the interior), hinges, transmission clutch components, radiator hoses, advanced cruise control systems, ‘appliances’ (whatever that means), back up alarm systems, convertible tops, rattles, squeaks, wind noise & water leaks (from poorly sealed windshields, for example) and even safety restraint systems.

And it also excludes repair of ‘correction of excessive oil consumption’ or ‘any reduction in engine efficiency.’ Engine problems? Claim denied at will.

Google around - and you’ll find more than a few individuals saying that failed parts – parts specifically listed as covered in the Fidelity Warranty Services contract - were outright denied without the agent even bothering to cough up an explanation. Why didn’t they bother to explain? Because they don’t have to be bothered - they’ve got their clauses to wiggle around in if they actually feel the need to provide an explanation. But that would be wasted breath and wasted time, since what are you, the consumer, going to do about it anyway?

You can forget about complaining to the BBB. These days, the BBB pays its utility bills with the hefty annual dues that come from the corporations who become its members. The Southeast Florida BBB currently rates Fidelity Warranty Services as A+.

Oh, and for all those people fussing that they are going to sue and are going to get a class action lawsuit going, well they can just forget that idea also. The Fidelity Warranty Services contract clearly states “You agree that all … claims arising … are subject to neutral binding arbitration … Any claim or dispute is to be arbitrated on an individual basis and not as a class action. You expressly waive any right to arbitrate a class action or in a private attorney general capacity …”

There’s a reason why so very many corporations these days are inserting arbitration clauses into their retail contracts … and you can be sure it’s not because arbitration is a fair shake for the aggrieved consumer. The courts are, in theory, bound to decisions based in law. Arbitrators are not. Unlike the public court system, arbitration is a private business. And guess who the arbitrators’ customer is? Guess who pays arbitration fees day-in, day-out, year-after-year? Not you, the lowly individual consumer, but the corporations – the very same corporations who actually create the demand for arbitrators through their contracts. Checkmate.

If this situation has outraged you, then probably the most effective thing you can do about it now - since you’ve already flushed your money down the toilet - is to tell your Congressmen to back the current administration’s attempt to outlaw arbitration clauses in all retail contracts. That is unless you actually think it’s a wise idea that any and all corporations with which you have to do business should be allowed to set themselves entirely above all law – and then do to you (and everyone else) whatever they please. Without arbitration clauses, corporations would tend to treat consumers somewhat more fairly, since it would be in the corporations’ financial interest to do so. It would, in many cases, be cheaper to simply honor the contractual obligations - than to shell out legal costs, fight class action lawsuits, etc.

Responses

  • Wa
    wayne_t936 Sep 22, 2009

    Is very well researched and doc'ed. I got tagged yesterday 09/21/09 when they refused to honor my 2005 jeep death wobble because it has 58000 miles on it. First complain about problem was at 41000 at dealership so they replaced steering shock, covered up the problem with-out fixing. It came back worse. My plan is for plat 7yr/70000. You would think that it would be against the law to refuse to honor a 70000 mile contract after 50000 miles. And as far as BBB and Gov help, Al Copoen was a candy thief compaired to the Washgington Mob.

    0 Votes
  • Ke
    KendrickMeek305 May 24, 2010
    This comment was posted by
    a verified customer
    Verified customer

    Sorry for your loss, Wayne ...

    0 Votes
  • Ke
    KendrickMeek305 May 24, 2010
    This comment was posted by
    a verified customer
    Verified customer

    KatBunz -- thanks for the compliment. I couldn't get the email system to work here this morning in order to reply to you directly. If you haven't finished paying off the installment contract, you may have some leverage. It says you can stop paying at any time and get a refund for the unused portion. The payment schedule is probably faster than the time of coverage, so you may well be due a refund. Threatening to drop the contract MIGHT get them to go along with paying for your loss. In my case, the dealership wouldn't even bother to file it. There's that 'can't go against the boss' stuff. BUT they covered me out of their goodwill slush fund. Probably because it was cheaper to pay my claim ... than to have deal with taking the commission back from the salesman (who sold me the warranty).


    katbunzNJ -- Hi ... I want to say a HUGE THANK YOU for posting your experience about Fidelity Warranty Services!! I just purchased a brand new AcuraTSX. I wanted an extended warranty (actually called a "service contract" rather than "warranty") as well as a Road Hazard plan for my wheels. The dealer signed me up with these jerks!! Thankfully I had the good sense to check them out on the internet as soon as I got home and put an immediate STOP to both of the plans. I should be getting a 100% refund without penalty since it's less than 30 days that I had the car (actually I don't have it yet because I'm picking it up tomorrow). By the way, Acura has its own extended service contract program called Acura Care. I learned about it online. When I asked the finance mgr why this plan wasn't offered to me, he said "Honestly, we don't deal with the Acura plan very much. Plus there's an incentive that the service dept receives from FWS." I could not believe my ears!! Wish me luck that I get out from this sham unscathed! Thanks again!!

    0 Votes
  • Sa
    SayNo Sep 01, 2010

    Very well researched and written, KendrickMeek.

    I, too, fell victim to purchasing a Fidelity Warranty Services contract, but luckily cancelled it within 48 hours after reading the fine print and all the complaints on the internet.

    Where I got burned was on my car loan, because once I cancelled the FWS contract, the dealership would not re-amortize the loan based on a lowered borrowed amount. Instead, they just applied the refund (5 weeks later by the way) to the back-end of the loan, which meant I was stuck with a higher monthly payment on a shorter term. I darn near begged to have the loan re-amortized but they (Coggin Toyota) refused.

    One thing I must emphasis to people is that the whole process of selling you these so called "extended warranties" is a carefully orchestrated piece of deception & illusion. Not only do they hit you with it near the end of a tiresome car-buying experience and exploit your unfamiliarity with the contract, but they also appeal to your fears & worries with phrases like "peace of mind", "extended bumper to bumper", "best warranty in the business". In my case, they even tied the warranty to a lower interest rate on the loan. It's also deceptive that the company is called "Fidelity Warranty" when in fact you are NOT buying a "warranty" (the contract says "this is not a warranty") and there is nothing "fidelus" about it.

    No matter how much you'd like to believe the illusion and the illusionist, you simply must wake up to the reality that when you really need this warranty to work for you, FWS can and will likely find a way to deny your claim, most likely under the 50k mile "wear & tear" cap.

    0 Votes
  • An
    antiscamangel Dec 13, 2010
    This comment was posted by
    a verified customer
    Verified customer

    I have also been scammed by Fidelity Warranty. They won't cover ANY of the repairs on a car that I bought less than a year ago. I paid $1800 for a useless piece of paper. Salesman told me I was "totally protected, bumper to bumper."

    I am so fed up with being scammed.

    0 Votes
  • Ke
    KendrickMeek305 Jul 11, 2011
    This comment was posted by
    a verified customer
    Verified customer

    UPDATE from KendrickMeek305: These 'binding arbitration' clauses are nothing more than corporations forcing you to exempt them from all criminal and civil law before they will do business with you. And they pick and hire the arbitration company so guess what, you lose. To see how serious this problem is becoming look up "Jamie Leigh Jones v. Halliburton" and/or watch the latter part of the film "Hot Coffee."

    0 Votes
  • Ro
    Rocket 88 Apr 06, 2013

    Arbitration clauses in certain states permits you to not accept the results of arbitration. Certain states already prohibit arbitration clauses in warranty policies. If you are pursuing damages against a warranty company based on a violation of law or regulation, this will exclude the binding arbitration clause. If your warranty was sold by a dealership who, in your state, is required to have brokers license to sell such "Insurance" and they had no license, they will respond to your claim quickly if you threaten to bring it up to the State Insurance Dept. Contracts must be read. Sales people will tell you anything. Always remember that your signing the contract without the review or advice of counsel in most states will allow you more wiggle room than the dealer. The dealer usually have counsel on payroll. You do not. They are expected to tell you to have it reviewed by counsel before you sign. If not, they have a legal problem that you can pursue. If they tell you and chose not to, your problem not theirs. Buying a warranty on a used mid price car is wasting your money. Keep the 000's of dollars they want in an account for car repair. Replace your car with a new or used car every 3 to 5 years and you'll never need the warranty.

    0 Votes
  • La
    Layla_22 Nov 21, 2013
    This comment was posted by
    a verified customer
    Verified customer

    I was also scammed. Toyota Mall of Georgia knew this when they screwed me ever so royally. I will be out of about $4000 for this so called extended warranty, which was a dirty, underhanded way of milking extra money from customers.

    -1 Votes
  • Ch
    Chris W2K Dec 18, 2013

    I've just had a similar issues with this company. For obvious needed repairs, the company refuses to send an inspector out to witness the car overheating and cutting off. They said that seeing this happen along with diagnostic reports and tests from several mechanics for parts covered under my warranty aren't enough. The lights verified by the diagnostic report and the car cutting off in the middle of it being driven aren't enough and if it was, again they are not willing to send an inspector out to see. THEY are a total rip-off. The mechanics have all given me the same repor in that since the dealership is closed where I purchased is closed that I've basically gave them over 3, 000 for a platinum warranty that they will not honor. I'm not sure if they are in a financial crisis, but I really hope this company falls to pieces and is uprooted, bought out, goes bankrupt or something. It is a shame. But, I wouldn't even go as far as to purchase another vehicle from any dealership that is selling a warranty from them. PLEASE do NOT make the same mistake that I did. Listen to all the complaints on here and DO not waste your money and get ripped off as well. Thank you. I hope this report was helpful. IT IS a SCAM!

    0 Votes

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