Warranty Gold Goes Bankrupt Leaving Warranty Owners Holdng the Bag!

Nov 23, 2003 3 Replies

Warranty Gold Goes Bankrupt



BY CLAUDIA GRISALES


COX NEWS SERVICE



AUSTIN, Texas - Austin- based Warranty Gold, which claims to be the country' s lead- ing seller of extended car warranties on the Internet, has filed bankruptcy filings in the Austin area, turning 67,000 customers across the country into unse- cured creditors.



The filing in U.S. Bankruptcy Court estimates the company's assets between $10 million and $50 million and put liabilities in the same range.



Customers made their frustrations heard on chat rooms and via e-mails. "I am so mad!" said a furious Melissa Walter, a Lakeland, Fla., resident who paid $1,500 for her policy in February 2003. "You have no idea how upset I am right now."



Warranty Gold blamed National Warranty, the company that it hired to pay claims on the service contracts, and plans to file a lawsuit against the Lincoln, Neb.-based company, which entered into bankruptcy-type proceedings on June 7.



Already, the company has told the bankruptcy court it won't have any money to pay unsecured creditors, which include customers who are out as much as several thousand dol- lars each for premiums and repair costs they had to pay out of their own pockets.



A lawyer representing Warranty Gold estimated that it would cost the company more than $30 million to refund all of the policies handled by National Warranty.



Despite the filing, Warranty Gold continued to sell policies last week.


And are still giving out instant quotes. Don't know what they would say if you called.

Guess you can't believe everything you read on the internet-- from the Warranty Gold website:

Warranty Gold Contract Solvency

The warranty is only as good as the financial stability of the company that is obligated to perform under the terms of your contract. When purchasing an extended warranty, it is important to know that the financial strength exists to pay all valid claims today and in the future. Warranty Gold deposits the required amount of reserves, for each contract sold, directly with the obligor who is responsible for the payment of claims. In the unlikely event that the reserves prove insufficient, all Warranty Gold contracts are currently insured directly through a financially stable A- (Excellent) rated insurance carrier.

Warranty Gold has taken these steps with only one thing in mind...Our customer's protection!

sheesh. my condolences to anyone caught up in it.

Only the mfg's extended warranties are worth anything.

proceedings

I agree.... If you dont get the manufacture warranty you are gonna get ripped off eventually.

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