HARRISBURG, Pa. — Pennsylvania Attorney General Tom Corbett has announced that he and the attorneys general for 10 other states have reached a settlement with US Fidelis, the St. Louis-based vehicle service contract provider that was forced into bankruptcy in April after being charged with false and deceptive business practices.

Nils Frederickson, spokesman for the Pennsylvania Office of Attorney General, said that the case and the settlement represent a solid victory for car buyers and a cautionary tale for unscrupulous marketers.

“This case should serve as clear warning: There are lines you can’t cross,” Frederiksen told F&I and Showroom. “The rules that are in play, if you look at it from our perspective, are to the benefit of everyone.”

At the heart of Corbett’s investigation were claims that US Fidelis repeatedly and systematically ignored federal Do-Not-Call rules, among other violations. The other states included in the settlement are Arkansas, Idaho, Iowa, Kansas, North Carolina, Ohio, Oregon, Texas, Washington and Wisconsin.

The company had been under investigation since 2008, a year in which US Fidelis employed more than 1,000 workers and generated $246.5 million in revenue. The first signs of trouble appeared late in the year, when BMW North America sued the company for using its name and logo in US Fidelis’ marketing efforts. Subaru followed with a similar suit in January 2009.

The manufacturers’ complaints were soon followed by a flood of reports from customers to the Better Business Bureau, each accusing US Fidelis of either pressuring or misleading them into purchasing a service contract or failing to pay claims. The company became the subject of more than 33,000 inquiries and 1,100 complaints from all 50 states in a 36-month period.

When executives failed to respond to a subpoena for documents from the Missouri Department of Insurance, the agency forced the issue by filing a suit against the company in April 2010. The multistate investigation that followed forced US Fidelis, a company the owners once claimed to be the leading U.S. provider of vehicle service contracts, into bankruptcy the same month.

The terms of the bankruptcy settlement will require the company’s owners, brothers Darain and Cory Atkinson, to surrender at least 90 percent of their assets. That includes a stake in 20 related corporations and $10.5 million dollars’ worth of personal property, including Darain Atkinson’s 40,000-square-foot Missouri mansion, a 50-foot yacht, and 35 other boats, cars and motorcycles.

More importantly, the Atkinsons agreed to no longer engage in certain business practices in the states covered by the settlement agreement.

“They are subject to a broad-based prohibition from the vehicle service contract business,” Frederiksen said. “Unless they’re working directly for a dealership, and are selling service contracts on the dealership’s behalf, they’re out of the business.”

That prohibition includes any telemarketing in the Commonwealth of Pennsylvania, and the Atkinson brothers also are barred from engaging in any business that misleads or makes misrepresentations to customers or targets senior citizens.

Due in part to the sheer volume of existing US Fidelis contracts, Frederiksen said his office’s responsibilities to the case are ongoing. “We’re willing to address any complaints,” he said. “Many consumers made a valid purchase, and any claims should be covered. However, it’s important to note that, in this case, it was the overstatement of the type and scope of the coverage that got the company in trouble.”