TALLAHASSEE, Fla. -

Extended warranties have become an increasingly integral part of the auto business, as they not only serve to protect car owners and foster greater buyer confidence, they can add another selling point for dealers and bring more value to a vehicle.

But — like with any business — there can be bad apples that abuse the system.

The Service Contract Industry Council, however, recently lent its help to curb some of these problems in Missouri, which is the eye of the ongoing storm surrounding extended service company U.S. Fidelis, whose former owners now face numerous charges, including insurance fraud.

Aiming to curtail the sale of vehicle service contracts by unscrupulous means and to uphold the integrity of those who do it the right way, state legislation that the SCIC helped draft was signed late last week in Missouri by Gov. Jay Nixon.

More than a year ago, the State Attorney General’s Task Force on the Motor Vehicle Service Contract Industry was put together. This task force spurred the creation of Missouri Senate Bill SB132, which included consumer protection language based on the SCIC Model Act.

Now, 36 states have implemented the act to some degree as a means to regulate extended warranty providers.

Missouri’s new law becomes effective Jan. 1 and will attempt to keep companies from employing deceitful and unethical marketing tactics in selling extended vehicle warranties.

"The SCIC worked closely with Missouri Attorney General Chris Koster to investigate and address misleading marketing practices of select St. Louis-based companies, including U.S. Fidelis," said SCIC executive director Timothy Meenan.

“At the urging of the SCIC, specific language in the bill prohibits individuals or companies from engaging in false, deceptive, or misleading conduct with respect to a motor vehicle extended service contract program, and authorizes restitution to any victims,” Meenan added.

Explaining the role of the SCIC in more detail, the council teamed up with Koster’s office to help in crafting language that was more precise as to what exactly the rights of a consumer are with regards to a refund if one decides to cancel a service contract.

Under SCIC’s model language, the car buyer must be given a copy of the contract’s terms and condition before it is sold.

The council also teamed with Assistant Attorney General Doug Ommen for a new licensing framework for Missouri-based businesses and individuals who want to sell motor vehicle service contacts.

SCIC noted: “With Missouri becoming a hotbed for deceptive direct mail and telemarketing campaigns, the new licensing provisions allow Missouri regulators to actively monitor the sale of service contracts to consumers from the state to ensure businesses and individuals are complying with all applicable law and, if not, that appropriate action be taken.”

Wrapping it up, Meenan added: “Although current law provided a cancellation right, SCIC Model Act language clarified the rights of the consumer and the obligations of a provider.”