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STATES SECURE RESTITUTION FOR CONSUMERS IN U.S. FIDELIS CASE

LITTLE ROCK - Attorney General Dustin McDaniel announced today that restitution will be available to customers of a now-defunct company that used illegal marketing tactics to sell vehicle service contracts.

McDaniel and 11 other attorneys general reached an agreement with the former owners of Missouri-based U.S. Fidelis to create a $13 million consumer restitution fund. U.S. Fidelis was the nation's largest seller of vehicle service contracts before it shut down and the business filed for bankruptcy in 2010.

The agreement entered today resolves a lawsuit filed by McDaniel in April 2010. The company and its owners, brothers Darian and Cory Atkinson, were accused of peddling service contracts through automated, prerecorded telephone calls, known as robocalls, as well as through deceptive junk mail and misleading television advertisements.

Suits filed against U.S. Fidelis alleged that the company misled consumers into believing their auto warranties had expired or would soon expire and that 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.

"This company duped Arkansas consumers into buying service contracts that were of no help to them," McDaniel said. "Even those Arkansans who did not buy contracts were subject to the company's aggressive and intrusive marketing calls."

In November 2010, McDaniel and other attorneys general reached an agreement with the Atkinsons to ensure that the brothers will never again sell over the phone. That settlement required the brothers to turn over their assets to the U.S. Bankruptcy Court in Missouri.

Since that time, the states have been working with U.S. Fidelis, its creditors and others involved in the bankruptcy case to reach an agreement to account for all consumer claims.

To be considered for restitution, consumers must submit a valid proof of claim with the bankruptcy court by Oct. 5, 2012. For more information about filing a proof of claim, visit the U.S. Fidelis bankruptcy website, www.usfbankruptcy.com, or call (877) 691-8477.

Other states participating in the agreement are: Idaho, Iowa, Kansas, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Washington, and Wisconsin.

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