Wednesday, September 12, 2012
Kansas Attorney General Derek Schmidt today announced restitution will be available to customers of a now-defunct company that used illegal marketing tactics to sell vehicle service contracts.
U.S. Fidelis was the nation's largest seller of vehicle service contracts before it ceased operations and the business filed for bankruptcy in 2010. Schmidt and attorneys general from 11 other states reached an agreement with the former owners of Missouri-based U.S. Fidelis to create a $14.1 million consumer restitution fund.
"Kansas consumers were misled to believe these service contracts would be beneficial to them and in fact, the extended warranties were not," Schmidt said. "We will not allow out-of-state companies to mislead Kansans and violate our consumer protection laws."
The company and its owners, brothers Darain and Cory Atkinson, were accused of advertising service contracts through automated, prerecorded telephone calls as well as through deceptive mail and misleading television commercials.
Suits filed against U.S. Fidelis alleged the company misled consumers into believing their auto warranties had expired or would soon expire and they were being contacted by an entity affiliated with their original vehicle warranty. Many consumers who thought they were purchasing a warranty with "bumper to bumper" coverage later found the contracts full of exemptions.
To be considered for restitution, consumers must submit a valid proof of claim with the bankruptcy court by October 5. For more information about filing a proof of claim, call (877) 691-8477. Schmidt said consumers can contact his office at 1-800-432-2310.
Schmidt said other states participating in the agreement are Arkansas, Idaho, Iowa, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Washington and Wisconsin.