A car insurance company that won $2 billion in auto-insurance contracts with President Donald Trump has agreed to pay $400 million to settle civil claims brought by the Obama administration over the company’s business practices.
The Justice Department alleged in its lawsuit that the auto insurance company, LMC Automobile, engaged in deceptive practices, including misleading customers and making false claims.
LMC has denied the allegations.
In October 2016, Trump’s nominee to lead the Federal Trade Commission (FTC) announced the agency would review the company.
The FTC is responsible for investigating complaints about consumer products and services.
Trump nominated Jeff Eisenach, a former Obama Justice Department antitrust lawyer, to head the FTC.
Eisenach has previously represented automakers and other industry groups.
In its lawsuit against LMC, the Justice Department argued the auto company had “deliberately and willfully” defrauded consumers by misrepresenting that LMC offered insurance coverage that covered cars and trucks at a lower price than the actual cost of repairs and insurance coverage.
In a statement, the company called the claims “baseless” and said it was “committed to upholding the highest standards of integrity and ethics in the marketplace.”