State Attorney General Chris Koster wants trustee to oversee U.S. Fidelis bankruptcy proceedings

By Mike Owens

KSDK -- Missouri Attorney General Chris Koster is asking the U.S. Bankruptcy Court here to appoint a trustee to oversee the winding up of the affairs of U.S. Fidelis, the once giant auto warranty company based in Wentzville.

U.S. Fidelis entered bankruptcy earlier this month amid a chorus of complaints from consumers and regulators. According to regulators, U.S. Fidelis used hard sell tactics and robo calls to line up customers nationwide and sell auto repair warranties. But when consumers had claims, the company sometimes failed to pay, or failed to pay the entire bill, as promised in the insurance package.

Koster says he's worried that the managers who ran U.S. Fidelis can't be trusted to be fair in the bankruptcy. He says they ran a firm which was dishonest and defrauded consumers. He has an affidavit from a former executive, Philip Jehle, who says the company police was to only pay refunds to consumers who "made a lot of noise."

Jehle says he was concerned about a lot of business practices, and eventually left the company. One concern: the robot phone calls, in violation of many states' no call lists. He was told not to worry about it, that he was "making a mountain out of a molehill."

Read the affidavit for Philip Jehle

Jehle says a company policy on refunds was telling. If the consumer demanded a refund, and was owed, for example, $1,000, the company returned just $600 and pocketed the remainder.

Koster says that happened so often, millions of dollars were generated from the refunds. A judge has yet to rule on Koster's request.

Attempts to reach company officials were unsuccessful.

Click the video player on the right side of the screen to see Mike Owens' one-on-one interview with AG Koster.