JEFFERSON CITY, Mo. (CN) – US Fidelis reached a settlement with 12 states that will create a $14.1 million restitution fund for people victimized by the company’s flameout.
US Fidelis was once the nation’s top seller of vehicle service contracts, before filing for bankruptcy protection in 2010.
The 12 states claimed US Fidelis, based in Wentzville, Mo., misled customers about the terms of their auto warranties.
US Fidelis owners Darain and Corey Atkinson pleaded guilty to federal and state charges relating to the company’s collapse and are awaiting sentencing.
“When I realized the scope of the fraud US Fidelis was perpetrating on consumers across the country, I made stopping it, punishing it, and deterring any future conduct a major priority in my office,” Missouri Attorney General Chris Koster said in a statement. “I am pleased that in addition to sending the owners of the company to prison, we are now able to return some of US Fidelis’s ill-gotten gains back to consumers.”
The settlement, along with a settlement with Warrantech Corp., whose contracts US Fidelis sold, will create the restitution fund.
Consumers who submit a valid proof of claim with the bankruptcy court handling US Fidelis’ case will eligible for compensation.