Finance news

A team of reporters from the Post-Dispatch has won a Gerald Loeb Award for Distinguished Business and Financial Journalism for a series of stories last year about the after-market auto service-contract industry in the St. Louis area.

Matthew Hathaway, Elizabethe Holland and Jim Gallagher won in the personal finance category, presented Tuesday evening by the Anderson School of Management at the University of California-Los Angeles, at a reception in New York City.

The reporters won for three stories each had a hand in writing and reporting in 2009:

— "From Prison to the Pinnacle," documenting the rise of auto service-contract marketer US Fidelis and cofounder Darain Atkinson, who went from federal prison to extraordinary wealth in fewer than 20 years.
— "Pressure Tactics Used at US Fidelis," which explained in detail the tactics used to sell the service contracts.

— "Warranty Sales Skim Top Profit," which explained how the extended auto service-contract industry works — from marketing, to financing, to refunds cash advance now.

Hathaway in particular has reported extensively on the industry, which is largely centered in the St. Louis area, where more than 30 companies are based. The companies market contracts promising to cover the cost of car repairs in exchange for a low monthly payment.

But they have come increasingly under fire from consumer advocates, regulators and attorneys general nationwide for what they have called fraudulent practices and deceptive marketing tactics.

US Fidelis, which had been the No. 1 marketer of the contracts, dropped from a 1,100-employee company to fewer than 200 in 2009 and ultimately declared bankruptcy on March 1. The company cited a precipitous drop in new business and public pressure for the decline.

The three stories that won represented a broad view of the industry, from the individuals who buy and sell the contracts, to the finance companies that cover the costs.

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