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FOR IMMEDIATE RELEASE
July 19, 2012
McKenna obtains relief for consumers scammed by bogus car warranty offers

US Fidelis will pay $13 Million in national settlement

SEATTLE – Consumers who received letters disguised as offers from vehicle manufacturers will be interested in a settlement announced today.

Washington State Attorney General Rob McKenna and 11 other state attorneys general today revealed an agreement with US Fidelis, a vehicle service contract dealer that routinely misled consumers before it closed its doors and filing for bankruptcy in 2010. The agreement provides $13 million in consumer restitution. More than 4,000 Washington state residents bought auto-warranties from the company and may be eligible.

 “State attorneys general put the brakes on an operation infamous for posing as your car’s manufacturer and sending dire warnings about your vehicle’s warranty coming to an end,” McKenna said. “Now we’ve negotiated a multi-million dollar fund to help consumers who were taken in by the scheme.”

The settlement, along with a prior deal with the service contract provider Warrantech, creates a $14.1 million Consumer Restitution Fund.  State attorneys general alleged Warrantech financially benefitted from US Fedelis’s misleading practices.

US Fidelis was a Missouri-based business run by two brothers, Darian and Cory Atkinson. It was once the nation’s largest dealer for vehicle service contracts before shutting down and filing for Chapter 11 bankruptcy in March 2010.

Washington and eleven other states sued the company and its owners for a variety of illegal actions relating to illegal and deceptive junk mail, telemarketing, robo-calls and TV ads. The states alleged that the company’s solicitations tricked consumers into believing their auto warranties had or would soon expire and that they were being contacted by their vehicle’s manufacturer. Many consumers who thought they were purchasing a warranty with “bumper to bumper” coverage later found the contracts full of holes.  

In November 2010, the states agreed to settle all claims against the Atkinson brothers if they agreed to turn over their assets to a bankruptcy estate. The Atkinsons were also criminally indicted in Missouri.

Since 2010, the multi-state steering committee worked with US Fidelis, its creditors, and others involved in the bankruptcy case to reach a settlement accounting for all consumer claims.  Washington State Assistant Attorney General Mary Lobdell, Senior Counsel in the office’s Consumer Protection Division, chaired the investigation, which began in 2008, and served on the settlement’s steering committee. “Mary deserves big thanks for her national leadership role in this important case,” McKenna added.

To be considered for restitution, most consumers must file their proof of claim by October 5, 2012. Consumers whose contracts expire after this deadline have additional time.

For additional information about filing a proof of claim, consumers should visit the US Fidelis bankruptcy website at www.usfbankruptcy.com. They may also call a toll free hotline at 1-877-691-8477.

The following states: Arkansas, Idaho, Iowa, Kansas, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Washington, and Wisconsin participated in the settlement. Each state will file its own consent judgment in its respective state court.

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Contacts:
Janelle Guthrie, Director of Communications, (360) 586-0725

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