Posted on December 14, 2009 at 10:06 PM
Monday, Dec 14 at 10:28 PM
(KMOV)-- There's a new reason the Better Business Bureau is warning you to avoid buying an extended auto warranty from U.S. Fidelis. The Wentzville based company is laying off almost 20% of its workforce. U.S. Fidelis now employs about 500 people.
About a hundred employees received a letter Monday saying you're fired. Each one said they felt more like criminals that ex-employees as they went through the U.S. Fidelis exit process.
Before they left they were told they'd get their final checks in two weeks. One woman said that violates state law to wait that long and on top of that she's worried her check won't ever show up. She's concerned the company may completely go out of business. A spokesperson with the Better Business Bureau has his own list of concerns. Not for employees, but U.S. Fidelis policy holders.
Months ago, News 4 told you how the BBB has received hundreds of complaints on U.S. Fidelis claiming the company uses high pressure tactics and refuses to cover some claims.
On Monday, the company sent News 4 this statement:
"For more than a year, this company has been working to implement important changes in the way we do business. Our goal throughout that process has been to ensure that each customer and each potential customer is treated fairly and honestly.
· We have acknowledged that those changes were necessary and worked hard to make them a reality.
· We have been testing, adjusting and implementing important new changes and policies designed by various experts looking at this relatively new industry.
· We have put in place policies, procedures and training that we believe comply with the standards and best practices that the industry, regulators and consumers have been seeking.
Unfortunately, because of the difficult economy and the ongoing criticism from some who have ignored the changes we have implemented, USfidelis' new sales have decreased and cancellations have increased dramatically. As a result, we've had to make some hard decisions.
· In the past several months, we reduced our workforce through attrition and layoffs.
· Today, we are forced to let another 15-20 percent of our team members go. We did all that we could to avoid this step, but certain business circumstances required us to make these difficult decisions.
· Most of the people affected by today's decision work on the sales side of our organization and many are compensated on commission, so we are adjusting to meet the diminishing demand. At present, we still employ approximately 500 people.
To all of those most directly affected by today's staffing reductions, we are deeply sorry that we were not able keep them as part of our team. We are working with all of those who are affected to help them through this difficult transition. We recognize this is a particularly difficult time to make these staffing changes, but we are going to do what we can to help those affected. We are saddened by today's events and committed to the future.
It is extremely important that all of our nearly 300,000 customers know that USfidelis is still available to help them with customer service issues. It is also critical for them to know that their vehicle service contracts are not affected by USfidelis' staffing adjustments. The contracts are with the high-quality administration companies and top-rated insurance companies we represent. Customers who have purchased a contract through USfidelis still have the same coverage and the same rights to have vehicle service claims paid.”