U.S. Fidelis owners form $14.1M restitution fund

KANSAS - According to an article in the Kansas City Business Journal, Kansas and Missouri consumers now can file claims for restitution from the owners of U.S. Fidelis, officials said Wednesday.

The defunct St. Louis-based company used illegal marketing tactics to sell vehicle service contracts. U.S. Fidelis was the biggest vehicle service contract seller in the country before it filed for bankruptcy in 2010.

The attorneys general of Kansas, Missouri and nine other states reached a deal with the company’s owners, brothers Darain and Cory Atkinson, to create a $14.1 million restitution fund. Using automated phone calls, deceptive mailings and TV commercials, US Fidelis tricked consumers into thinking their warranties were about to expire and the company could get them an extension. The contracts were full of exemptions.

“Kansas consumers were misled to believe these service contracts would be beneficial to them and in fact, the extended warranties were not,” Kansas Attorney General Derek Schmidt said in a written statement. “We will not allow out-of-state companies to mislead Kansans and violate our consumer-protection laws.”

Cory Atkinson pleaded guilty in June to federal charges of mail and wire fraud and filing false tax returns, as well as state charges of insurance fraud and consumer fraud. Darain Atkinson pleaded guilty to similar charges in April.