Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Vermont Attorney General Donovan Announces He Will Not Run For Reelection

Vermont Attorney General T.J. Donovan announced that he will not run for reelection in 2022 after nearly two decades in public service, six of which he spent as the Vermont Attorney General. Attorney General Donovan is known for starting the Rapid Intervention Community Court in Chittenden County, a criminal justice program made available to non-violent offenders whose crimes have been driven by addiction or mental illness. He also worked to improve the communication among law enforcement and the mental health community by advocating passage of “ban the box” legislation to prevent employers from inquiring about criminal history on initial job applications. During his time as Attorney General, he was involved in many timely issues, including the amicus brief to the Ninth Circuit Court of Appeals opposing former President Trump’s executive order banning immigrants from certain Muslim countries. Charity Clark, the Attorney General’s former chief of staff, and Brooks McArthur, a deputy prosecutor when Donovan ran the Chittenden County office, have expressed interest in running for the position.

Texas, Missouri, and Montana Join Alabama in Withdrawing from NAAG

The Attorneys General Texas, Missouri, and Montana have withdrawn from the National Association of Attorneys General (“NAAG”). The states join Alabama which withdrew in 2021.

Multistate:

  • Intuit Inc., the owner of TurboTax, has settled with all 50 states’ Attorneys General for a total of $141 million to resolve claims that the online tax preparer deceived low-income Americans into paying for services that should have been free. Pursuant to the settlement, Intuit will also suspend TurboTax’s “free, free, free” advertising campaign, which allegedly lured customers with promises of cost-free tax preparation but directed them to options that required payment.
  • A bipartisan coalition of 25 Attorneys General, led by Attorney General Kwame Raoul, urged the Federal Trade Commission to consider the actions states have taken to address misrepresentations made by for-profit colleges and universities during its rulemaking process related to schools’ deceptive earnings claims. In March, the FTC issued a request for comments regarding deceptive or unfair earnings claims made by a broad range of businesses, including for-profit schools. The coalition are calling on the FTC to take into account misrepresentations schools have made with respect to their graduates’ earnings as the agency considers proposing rules governing the broad use of such earnings claims.
  • Financial and securities regulators in Alabama, Kentucky, New Jersey, Texas, and Wisconsin have brought actions against a Russian website operator that requires it to stop offering securitized non-fungible tokens (Securitized NFTs) in violation of the states’ laws. The subject of the action, Flamingo Casino Club, allegedly offers fraudulent Securitized NFTs that purportedly convey ownership and the right to share in the profits of a “metaverse” casino.

Arkansas

  • Arkansas Attorney General Leslie Rutledge announced a lawsuit against drug manufacturers and Pharmacy Benefit Managers for allegedly manipulating and inflating insulin and drug prices in the state. The complaint seeks an injunction, restitution, and civil penalties, among other remedies.

Florida

  • Florida Attorney General Ashley Moody announced a settlement with Walgreens for $683 million, resolving allegations that the pharmacy chain exacerbated the opioid epidemic in the state. 

Idaho

  • Idaho Attorney General Lawrence Wasden announced a settlement with Navient, one of the nation’s largest student loan servicers, which will provide $3,972,316 in student loan debt relief. The settlement resolves allegations that Navient steered borrowers struggling to make payments on their loans towards high interest forbearances that added significant additional long-term debt. 

Massachusetts

  • Massachusetts Attorney General Maura Healey announced a settlement with Integrity Home Care Solutions, LLC, a home health agency, and its owners, President and CEO for $550,000, resolving allegations that the defendants billed the state’s Medicaid program, MassHealth, for services that had not been appropriately authorized by a physician.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • A bipartisan coalition of 53 attorneys general is seeking Congress’ passage of The Public Safety Officer Support Act of 2022. The Act addresses gaps in mental health support for public safety officers who have post-traumatic stress disorder and would allow the families of former public safety officers who committed suicide to receive benefits.
  • A coalition of 28 attorneys general is asking GoFundMe to improve its disclosure policies and increase clarity in its terms of service for consumers. Specifically, the coalition is seeking an understanding of GoFundMe’s policies for when it chooses not to honor donations to certain causes.
  • A coalition of 12 attorneys general filed comments to the Federal Energy Regulatory Commission asking it to carefully consider the impacts of proposed natural gas infrastructure projects on nearby communities and on greenhouse gas emissions. The coalition applauded the development of an analysis framework for greenhouse gas emissions and for an update of the agency’s pipeline certification policy, while asking it to go further by acknowledging the need to reduce investments in fossil fuel infrastructure.
  • Colorado Attorney General Weiser and Nebraska Attorney General Peterson submitted joint comments on the U.S. Department of Justice and Federal Trade Commission’s joint plan to revise the Horizontal Merger Guidelines. The comments emphasize the importance of antitrust enforcement reform given current market realities such as digital markets and nascent competition and having the “right tools” to ensure mergers do not harm consumers.

Alaska

  • Alaska Attorney General Taylor filed an amicus brief with the United States Supreme Court, asking it to consider Alaska’s interests as they relate to the extent of federal authority under the Clean Water Act. Alaska is specifically concerned about the large amount of wetlands in the state, which cover almost half of the territory, and is seeking for the definition of “navigable waters” to include “relatively permanent, standing, or continuously flowing bodies.”

Massachusetts

  • Massachusetts Attorney General Healey announced a consent decree filed against scrap metal processing company Joseph Freedman Co., Inc., settling allegations that it violated the Clean Water Act by unlawfully discharging polluted industrial stormwater through a municipal storm drain system without a permit. The settlement includes a $165,000 payment and requires system improvements.
  • Massachusetts Attorney General Healey announced a citation issued against waste hauling and disposal company Dynamic Waste Systems, Inc. and its owner for failing to timely pay wages by automatically deducting meal breaks without confirming they were really taken. The citation includes over $250,000 in restitution and penalties and requires a change in business practices.
  • Massachusetts Attorney General Healey announced a settlement with the State Rating Bureau and the Workers’ Compensation Rating and Inspection Bureau, following an intervention in an administrative rate hearing. The settlement resulted in a rollback of about 3.5% on insurance rates for workers’ compensation, saving businesses in the state about $80 million.

Minnesota

  • Minnesota Attorney General Ellison announced a lawsuit against four solar-panel sales companies and three executives for allegedly using deceptive and fraudulent marketing and sales practices. The lawsuit also names several lenders who assumed liability for claims and defenses. For example, the defendants allegedly tricked consumers into signing binding contracts and gave a false impression of partnering with utility companies. The lawsuit seeks declaratory relief, restitution, civil penalties, costs, and the cancellation of the contracts involved.

New York

  • New York Attorney General James and the Consumer Financial Protection Bureau filed a lawsuit against and MoneyGram Payment Systems, Inc. for allegedly violating consumer protection laws by failing to deliver funds in a timely way or to refund consumers when the funds were delayed. Attorney General James alleges that this behavior negatively impacted immigrants who were trying to send funds to their native countries. The lawsuit seeks monetary relief, civil penalties, and an injunction.

Pennsylvania

  • Pennsylvania Attorney General Shapiro announced a settlement with individuals associated with towing companies Angelina’s Towing and Recovery LLC, Siani’s Towing and Recovery LLC, and Aubry’s Towing LLC. The defendants allegedly towed vehicles that were parked legally and then sought cash payments for their release. The settlement, which is part of a larger effort against consumer protection violations by towing companies, includes restitution, costs, and a suspended civil penalties payment.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Arizona

  • Arizona Attorney General Mark Brnovich, urged Arizona consumers to be aware of potential tax-related scams, and the Office published tips for handling scams, including fake IRS calls.

Florida

  • Florida Attorney General Ashley Moody advised Floridians to refrain from using public Wi-Fi when accessing personal and financial files or apps online. In this alert, Attorney General Moody outlined the most common public Wi-Fi hacking scenarios.

Illinois

  • Illinois Attorney General Kwame Raoul issued guidance to Illinois residents designed to help them safely file tax returns, and urged residents to exercise caution before providing personally-identifyiable and financial information online.

Indiana

  • Indiana Attorney General Todd Rokita co-authored a letter to Indiana residents, which outlined the Office’s concerns about potential consumer protection issues within the conduct and terms of the GoFundMe platform.

Massachusetts

  • Massachusetts Attorney General Maura Healey announced that a finance company has agreed to provide more than $930,000, in debt relief and restitution to resolve allegations that it was illegally leasing dogs in Massachusetts. The settlement includes Monterey Financial Services, LLC commitment to waive the outstanding debt held by consumers, totaling approximately $700,000, and the full transfer of ownership of the dogs to hundreds of Massachusetts residents.

New York

  • New York Attorney General Letitia James issued an advisory to landlords reminding them that they cannot raise rents if they accepted or plan to accept funding from the State’s Emergency Rental Assistance Program, which was recently expanded in the State’s budget. Landlords who accept payments from the program are prohibited from raising rents for one year after the receipt of the funds.

Ohio

  • Ohio Attorney General Dave Yost provided warned consumers about travel scams during the peak travel months, and published a brief timeline of Ohio’s consumer protection laws.

Pennsylvania

  • Pennsylvania Attorney General Josh Shapiro publicized a settlement in the form of an Assurance of Voluntary Compliance with a waste removal company that allegedly illegally charged and collected container removal fees from some of its customers.

Rhode Island

  • Rhode Island Attorney General Peter F. Neronha will testify in support of legislation currently before the General Assembly that will increase penalties for wage theft and misclassification, joining State labor leaders in a push to protect Rhode Island workers, taxpayers, and business owners. The bill, H 7677, proposes to reclassify knowing or willful instances of wage theft over $1,500 from a misdemeanor to a felony.

Vermont

  • Vermont Attorney General T.J. Donovan announced that his office has reached settlements with two different online sellers of electronic cigarettes for violations of Vermont’s Delivery Sales Ban and Vermont’s Consumer Protection Act. Under the settlements, the companies resolved claims that they sold electronic cigarettes, e-liquids, or other tobacco paraphernalia to individual consumers and agreed to pay $215,000 in total civil penalties.

West Virginia

  • West Virginia Attorney General Patrick Morrisey announced that his office has reached a $99 million settlement with Janssen Pharmaceuticals, Inc., an opioid drug manufacturer involved in an ongoing trial in Kanawha County Circuit Court.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • A multistate coalition of 18 attorneys general, led by New York Attorney General James, sent letters to major financial institutions, such as, JPMorgan Chase, Bank of America, U.S. Bank, and Wells Fargo, calling the CEOs to eliminate all overdraft fees on consumer bank accounts. According to the letters, numerous studies have shown that overdraft fees disproportionately affect vulnerable families and communities of color by unnecessarily saddling them with additional debts that they cannot afford.
  • A multistate coalition of 23 attorneys general, led by Illinois Attorney General Raoul, sent a letter to the Consumer Financial Protection Bureau (CFPB) urging the CFPB to evaluate convenience fees in the mortgage industry and argue they are particularly unfair and abusive. This is due in part to the fact that homeowners have no choice in their mortgage servicers. The attorneys general argue that when taking out a mortgage, many people believe they are entering into a long-term relationship with a specific financial institution. However, mortgage loans and their servicing rights may be sold many times over and as a result, people don’t know which company will service their mortgage loan and have no ability to change servicers. Additionally, the attorneys general argue that servicers charge convenience fees that exceed their actual cost to accept payments online or over the phone, allowing a servicer to essentially pay itself twice.
  • A multistate coalition of 23 attorneys general and cities filed comments in support of the U.S. Environmental Protection Agency’s (EPA) proposal to reaffirm that it is “appropriate and necessary” under the federal Clean Air Act to regulate mercury and other toxic air pollution from coal- and oil-fired power plants. The coalition agrees with EPA’s proposal to revoke the 2020 rule, which it argues lacked a reasoned basis and created a serious threat to public health. The comments point out that the 2012 Mercury and Air Toxics Standards (MATS Rule), is a landmark rule that has substantially reduced emissions of especially dangerous pollutants that threaten vulnerable communities, including children and historically marginalized communities.

Arkansas

  • Arkansas Attorney General Rutledge announced a judgment against Antonio Flowers resolving allegations that he accepted work that he had no intention of completing, in violation of the Arkansas Deceptive Trade Practices Act (“ADTPA”). Mr. Flowers will pay $130,000 for thirteen violations of the ADTPA.  In addition, the judgment requires Mr. Flowers to pay $16,545 to the State that will be disbursed to the affected customers.

California

  • California Attorney General Bonta announced a stipulated judgment against ZeroDivide, a San Francisco-based nonprofit focused on bringing technology to low-income communities that ceased operations in 2016 due to its financial insolvency, as well as its directors and officers. The settlement resolves allegations that the nonprofit violated California’s charitable trust laws by misspending restricted donations meant to fund two of its charitable programs. ZeroDivide and its directors and officers will be required to pay $326,008 in damages and $138,525 in penalties, late filing fees, and attorney’s fees. The nonprofit’s directors must also dissolve ZeroDivide and distribute the damages amount and any remaining assets. Finally, two of ZeroDivide’s officers will be permanently enjoined from any future violations of California’s charitable trust laws and will be prohibited, for three years, from participating in certain functions that relate directly and indirectly to non-profits in California.

Georgia

  • Georgia Attorney General Carr sent a letter to the Biden Administration to immediately implement policies designed to increase, incentivize, and prioritize domestic energy production and ultimately provide relief for American families facing increased gas prices and inflation.

Michigan

  • Michigan Attorney General Nessel announced a settlement with Frontier Communications to resolve allegations that the company did not provide consumers with internet service at the speeds it promised them and charged many for more expensive and higher-speed service than the company actually provided. As part of the agreement, Frontier has committed to $15 million to improve its infrastructure in the state over the next four years. In addition, $20,000 will be made available to consumers who submitted complaints to the Department or the Better Business Bureau.

New York

  • New York Attorney General James announced a settlement with the Pike Company, a construction company, resolving allegations that the company falsely certified that it complied with state diversity requirements when it subcontracted the supply of materials to several minority and women owned businesses. The Pike Company is the most recent construction company, in addition to 10 other contractors, that have allegedly violated the diversity requirements for the project to upgrade Rochester’s schools and is the most recent company to be held accountable for its violations. The Pike Company will pay $100,000 to the state, a portion of which will go to the Rochester Joint Schools Construction Board (RJSCB), and $25,000 to the whistleblower.

Oregon             

  • Oregon Attorney General Rosenblum announced a lawsuit against the Center for COVID Control and its testing partners, Doctors Clinical Laboratory, for allegedly using deceptive marketing testing services and violating Oregon’s Unlawful Trade Practices Act. The complaint alleges that defendants falsely told consumers they could provide accurate PCR COVID-19 results within 24-72 hours of testing. According to the complaint, defendants’ tests produced questionable results and it lacked proper capacity to store and process the thousands of test specimens they received each day.

Utah

  • Utah Attorney General Schmitt announced a consent judgment against Happy Fun Events, LLC, a Utah-based company, that put on “Lantern Fest” events around the country, and its owners, Owen Spencer Hunn, and Martha Hunn. Allegedly, Happy Fun Events had scheduled an event in the State for November 2018 that it ultimately never put on. Though thousands of consumers had purchased tickets to the event (at a value of more than $230,000), Happy Fun Events allegedly never refunded their money. Happy Fun and its owners will be required to pay $300,000, which includes restitution, civil penalties, investigation costs, and payment to the Merchandising Practices Revolving Fund.

Virginia

  • Virginia Attorney General Miyares announced a settlement with Wheeler & Wheeler Inc. d/b/a West End Motors, a gas station, for alleged significant price increases on gasoline after a state of emergency was declared on May 11, 2021 in response to the temporary shutdown of the Colonial Pipeline. As part of the settlement, West End Motors agreed to stop any further violations of Virginia’s price gouging law and the Virginia Consumer Protection Act. In addition, the business will pay approximately $6,568 in restitution for affected consumers, $1,250 in civil penalties, and $1,250 in attorneys’ fees.

Washington D.C.

  • District of Columbia Attorney General Racine announced a settlement with Dynamic Contracting, Inc., a construction company that specializes in drywall installation, resolving allegations that it engaged in a scheme that enabled the company to avoid paying workers their full wages by misclassifying them on construction projects throughout the District. Dynamic Contracting will pay $1,075,070 to affected workers and the District and the company is required to implement policies and procedures to ensure compliance with the District’s minimum wage, overtime, paid sick leave, and worker misclassification laws.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • A multistate coalition of 23 attorneys general led by New York Attorney General James and California Attorney General Bonta filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit in support of the Biden-Harris administration’s efforts to restore access to Title X federal funding for family planning services. The Biden-Harris administration is attempting to reverse a Trump-Pence administration rule that restricted Title X funding. The brief, filed in Ohio v. Becerra, opposes efforts of the plaintiff States attempting to halt implementation of the Biden-Harris administration rule.
  • A multistate coalition of 6 attorneys general led by New York Attorney General James sent a letter to N.F.L. Commissioner Roger Goodell stating they have “grave concerns” about the allegations of workplace harassment of women and minorities at the N.F.L. and warned that the attorneys general were willing to begin a broad investigation of the allegations if steps were not taken to address the issues. This letter is based on a February report by the New York Times in which more than 30 former employees described experiencing an unacceptable workplace culture at the N.F.L., the ongoing Congressional inquiry into workplace treatment of female employees at the Washington franchise and the discrimination lawsuit filed by Brian Flores.

California

  • California Attorney General Bonta filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in Epic Games v. Apple arguing in support of broad protections for fair competition under California’s Unfair Competition Law. The brief explains the importance of the Unfair Competition Law to antitrust enforcement in California because the law only depends on unfair practices and not on a concurrent antitrust violation.
  • California Attorney General Bonta filed an amicus brief in the U.S. Court of Appeals for the Ninth Circuit in Moreno v. Vi-Jon arguing in defense of state laws protecting consumers from false and misleading advertising. Moreno v. Vi-Jon is a false advertising case alleging that the claims made on the front and back labels of hand sanitizer products were false and/or misleading. The Attorney General argued the district court erred in dismissing the case because economic injury from purchasing a deceptively advertised product establishes standing, deceptive advertising claims present questions of fact inappropriate for dismissal, disclaimers do not necessarily excuse misleading claims and the court failed to consider how reasonable consumers actually behave in the real-world when making purchasing decisions.
  • California Attorney General Bonta announced that he sent warning letters to 91 law firms across the state that represent landlords in eviction cases because some firms, and their clients, may have violated the law by falsely declaring tenants have not notified them of a pending emergency rental assistance applications. The Attorney General followed the prior announcement by issuing a consumer alert reminding Californian tenants of their rights and protections under state law.
  • California Attorney General Bonta announced a settlement with Smart & Final resolving allegations that the grocer engaged in price gouging of certain types of eggs during the COVID-19 pandemic. The settlement requires Smart & Final to pay $175,000 in penalties and permanently enjoins Smart & Final from future violations of the Unfair Competition Law.  California Governor Newsom’s declared state of emergency on March 4, 2020 triggered California Penal Code 396, the state’s price gouging protection law.

District of Columbia

  • District of Columbia Attorney General Racine filed a lawsuit against Grubhub for charging hidden fees, misleading District residents, using bait-and-switch advertising tactics and exploiting local restaurants to boost its own profits. The lawsuit seeks an end to Grubhub’s alleged deceptive marketing, truth about prices and fees, penalties for violating District law, and restitution for affected consumers.

Missouri

  • Missouri Attorney General Schmitt issued a civil investigative demand to Powerhome Solar, LLC, for information regarding its practices for sales and installation of solar panels. The investigation seeks information regarding the capabilities, installation, and financing of Powerhome Solar’s solar panel products due to alleged violations of state consumer protection laws.

New Jersey

  • New Jersey Attorney General Platkin announced that the Division of Consumer Affairs imposed penalties against four pharmacies for alleged consumer protection violations in the sale of COVID-19 antigen tests. The Attorney General sent Notices of Violation to four pharmacies including Valley Pharmacy, Sayreville Pharmacy, Iselin Pharmacy and Wellcare Pharmacy.

Pennsylvania

  • Pennsylvania Attorney General Shapiro announced Martino Motors was found to be in violation of an Assurance of Voluntary Compliance previously entered in 2014. Martino Motors and its owner have been permanently banned from selling cars in Pennsylvania.

Vermont

  • Vermont Attorney General Donovan announced a court ruling against Missouri-based Karabell Industries for making repeated illegal telemarketing calls and harassing state legislators. The consent judgment requires Karabell Industries to cease all business and telemarketing activity in Vermont and refrain from contacting anyone in Vermont about any marketing, sales, offers or otherwise.

West Virginia

  • (Review for Conflicts – Janssen is the parent company of J&J) – West Virginia Attorney General Morrisey began trial against three opioid drug manufactures, Janssen, Teva and Allergan, on Monday, April 4th. The lawsuit alleges the drug manufacturers helped fuel the opioid epidemic in West Virginia by engaging in campaigns to deceive prescribers and misrepresent the risks of opioid painkillers. The lawsuit alleges these practices are violative of West Virginia’s Consumer Credit and Protection Act and seeks injunctive and equitable relief.

Wisconsin

  • Wisconsin Attorney General Kaul announced a civil enforcement action against New Jersey-based firm N.C.W.C., Inc. for violations of Wisconsin’s telemarketing laws by marketing extended vehicle service plans to automobile owners in Wisconsin.

April 12, 2022

On March 25, 2022, a multistate coalition of over twenty democratic attorneys general submitted a joint letter to the Consumer Financial Protection Bureau (“CFPB”) asking the Bureau to create a rule regulating providers of Buy-Now-Pay-Later (“BNPL”) financing. The joint letter was submitted in response to the CFPB’s “Notice and Request for Comment Regarding the CFPB’s Inquiry into Buy-Now-Pay-Later Providers.” Click here to read more.

To gain information about the BNPL market, the CFPB opened monitoring orders inquiring into BNPL products in the United States on December 16, 2021. Between January 24, 2022 and March 25, 2022, it invited comments to better understand how consumers interact with BNPL providers and how BNPL business models impact the broader e-commerce and consumer credit marketplaces.

As discussed in its letter, the AG coalition is concerned that BNPL financing could harm financially vulnerable consumers and that it is largely unregulated. Among other things, it is asking the CFPB to analyze whether providers clearly and correctly disclose fees and charges, how providers protect consumer rights, and what steps providers take to ensure consumers have the ability to repay loans.

Labeling BNPL loans as similar predatory lending products, the AG coalition notes that BNPL share some of the same terms and features which consequently “push consumers into cycles of debt.” Given the popularity of these products among younger consumers, who the AG coalition claims lack experience with credit, the potential long-term harm of BNPL financing is significant.

In light of their own state-level efforts to hold lenders accountable for preying on vulnerable borrows, the attorneys general specifically identify the following BNPL features as concerning: “BNPL providers’ claims of quick application approvals, no credit checks, no interest or fees, and convenient payment schedules.” While acknowledging the potential benefits of BNPL financing such as the ability to split the cost of goods and services into multiple installments without interest or fees, the coalition’s letter emphasizes the way in which certain products are designed to evade consumer protection laws. As BNPL financing increases in prominence, the AG coalition urges the need for transparency and further investigation.

Specifically, the AG coalition outlines the following concerns as issues that the CFPB needs to address:

  • BNPL providers may capitalize on the purportedly distinct features of their products to avoid requirements about disclosure and dispute resolution. Given the design of BNPL financing, these providers “may opine that they are not required to provide consumers with the same disclosures […] and are not subject to the same dispute resolution protections or return/refund procedures.”
  • BNPL providers may not be considering a consumer’s ability-to-repay prior to extending loans, as evidenced by their questionable marketing and lack of robust underwriting.
  • BNPL providers frequently fail to report positive credit activity, and their products may adversely affect consumer credit reports.
  • While they may not charge interest, many BNPL products charge late fees and activity fees which are not adequately disclosed.
  • It remains unclear how BNPL providers use and monetize consumer data.

The AG coalition’s letter sheds light on the multilayered ambiguity and lack of regulation that defines the current BNPL financing space. As BNPL financing becomes more popular, caution is warranted. The BNPL sector has been experiencing tremendous growth, with a 300% annual increase in the number of consumers who have taken out a BNPL loan since 2018. Crowell & Moring will continue to monitor developments and provide updates.

For more information, please contact the professional(s) listed above, or your regular Crowell & Moring contact.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • A multistate coalition of attorneys general asked the Consumer Financial Protection Bureau (“CFPB”) to more closely monitor and create a rulemaking to regulate providers of Buy-Now-Pay-Later financing. The coalition is concerned that this type of financing could harm financially vulnerable consumers and that it is largely unregulated. Among other things, the coalition is asking the CFPB to analyze whether providers clearly and correctly disclose fees and charges, how providers protect consumer rights, and asks the CFPB to consider requiring  providers to ensure consumers have the ability to repay loans.
  • A multistate coalition of attorneys general wrote a letter to social media companies TikTok and Snapchat, urging them to allow parents to monitor their children’s social media usage and protect them from online threats with parental control apps. While social media platforms already moderate content to an extent, the coalition believes that partnership with parents is essential to maintaining safe online spaces for children.
  • Several state attorneys general have continued to announce partnerships with the Federal Communications Commission (“FCC”) to investigate robocalls. The attorneys general believe partnering with the FCC will allow for more effective and efficient targeting of robocalls.
  • A multistate coalition of attorneys general filed an amicus brief in the U.S. Supreme Court, asking it to affirm a lower court decision that transportation employees who load and unload interstate cargo are exempt from the Federal Arbitration Act. The coalition is arguing that the transportation sector is critical to state economies and infrastructure, so states have an interest in ensuring any related disputes are resolved in transparent, public proceedings.

Arizona

  • Arizona Attorney General Brnovich announced a settlement with ABC Nissan and Pinnacle Nissan, both owned by Berkshire Hathaway Automotive, resolving allegations that they engaged in false advertising by advertising low vehicle prices online but then refusing to actually sell vehicles for that price and instead requiring the purchase of add-on accessories. The settlement includes over $500,000 in restitution, penalties, and fees.

California

  • California Attorney General Bonta announced state Senate Bill 1311, which would increase legal and financial protections for California active duty and reserve component service members and their families. Among other things, the bill would prohibit businesses from offering military discounts that are conditioned on waiving any legal rights, bar businesses from using a loophole to deny service members the Military Lending Act’s protections, and increase civil penalties for violations of the Unfair Competition Law against service members and veterans.

Colorado

  • Colorado Attorney General Weiser announced a settlement against magazine subscription company Mountain View Publishers including a $250,000 payment and resolving allegations that the company misled consumers into subscribing to its quarterly Jackpot Journal magazine. The company allegedly sent deceptive mailers telling consumers they won prizes and asked them to sign and return the mailer, entering those consumers into an automatically renewing subscription. In addition to the payment, the settlement requires the company to clearly disclose its automatic subscription renewal and the subscription price as well as to stop using pressure tactics.

Georgia

  • Georgia Attorney General Carr announced a settlement with Mavis Tire Supply, LLC, resolving allegations that the company used illegal and deceptive practices during its vehicle repairs and sale of automotive parts. For example, the company was accused of telling consumers their vehicles needed parts or repairs they did not need and representing that parts were new when they were actually used. The settlement includes $200,000 in civil penalties and about $96,000 in restitution to identified and non-identified consumers.

Massachusetts

  • Massachusetts Attorney General Healey announced a settlement against home health agency Compassionate Homecare, Inc., which requires the company to pay $6.53 million to MassHealth. The settlement resolves allegations that the company billed MassHealth for services a physician did not authorize, and it also sets aside $375,000 for unpaid employee wages.

Michigan

  • Michigan Attorney General Nessel filed a civil action against Concentrated Animal Feeding Operation Holloo Farms, LLC, related to its alleged noncompliance with Department of Environment, Great Lakes, and Energy permitting and the Natural Resources and Environmental Protection Act. Specifically, the complaint alleges that the business has overloaded state water bodies with bacteria and pathogens from animal waste.

New Jersey

  • New Jersey Acting Attorney General Platkin announced that the New Jersey Bureau of Securities issued a Summary Cease and Desist Order against financial services company Voyager Digital Ltd., Voyager Digital, LLC, and Voyager Digital Holdings, Inc., seeking to stop the company from selling unregistered securities through cryptocurrency.

New York

  • New York Attorney General James sent letters to large credit card companies and major debt collectors operating in the state, warning them that the Consumer Credit Fairness Act of 2021, which goes into effect next month, shortens the statute of limitations for consumer debt collection from six to three years. The press release also reminds companies of the requirements of the Act and federal debt collection law, such as limiting communications to consumers, providing consumers with important information, and taking debt disputes seriously.
  • New York Attorney General James announced a settlement with energy service provider Columbia Utilities, LLC and Columbia Utilities Power, LLC, resolving allegations that they engaged in prohibited door-to-door marketing for gas and electric contracts, in violation of a previous settlement. The settlement includes a $500,000 payment and automatically terminates all contracts unless consumers affirmatively opt to continue them.
  • New York Attorney General James issued a press release warning virtual currency investors and their advisors that taxes must be declared and paid on virtual investments, as well as cryptocurrency transactions.
  • New York Attorney General James announced a court ruling against Prestigious Marketing Concepts, Inc., requiring it to pay full restitution to all consumers who paid for consumer goods, including Xboxes and PlayStations that were never delivered. The court order follows a December 2021 lawsuit Attorney General James filed against the company.
  • New York Attorney General James announced agreements with home health agencies All American Homecare Agency, Inc. and Crown of Life Care NY LLC, requiring them to repay $5.4 million to Medicaid and Crown to refund over $1.5 million to employees for wage theft. The companies were accused of cheating employees out of wages and of submitting false claims to Medicaid. New York Attorney General James also announced the sentencing of the owner of Healthy Living Community Center and LCM Livery P/U, Inc. for a Medicaid fraud scam. The scam involved a sham housing assistance program the companies used to collect personal information, which was then used to submit false claims for custom-molded back braces. The sentence includes an order to repay over $4 million in restitution.

Vermont 

  • Vermont Attorney General Donovan announced a settlement against Taconic Orthopedics, P.C., which does business as Taconic Spine, for sending a deceptive debt collection letter to patients with overdue accounts. In reality, the legal time for suing many of these patients had already passed. The settlement bars the company from collecting certain debts, requires it to use a professional debt collection agency in future collection efforts, and requires a $10,000 partially suspended payment.

Washington

  • Washington Attorney General Ferguson announced that his office created a complaint form for consumers to report robocalls, as well as a website that gives consumers more information about robocalls and telemarketing scams.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Arkansas

  • Arkansas Attorney General Leslie Rutledge announced a lawsuit against Eastern Ozarks Regional Health System for failing to protect sensitive patient information, both personal and medical, after the hospital closed. The suit alleges that the former Cherokee Village hospital violated the Personal Information Protection Act and the Arkansas Deceptive Trade Practices Act when the hospital abruptly closed its doors, locking out employees and abandoning patient and employee files.

California 

  • California Attorney General Rob Bonta sent a letter to refineries active in the California market warning them against illegal market manipulation and other violations of state antitrust laws. While gas prices reflect a number of factors, too often, market disruption creates opportunity for market manipulation. In the letter, Attorney General Bonta calls on these businesses to keep a close eye out for manipulation and to immediately report any anticompetitive behavior.
  • Attorney General Rob Bonta issued a statement following a decision by the First District Court of Appeal rejecting SK Trading‘s request to be dismissed as a defendant for lack of jurisdiction in ongoing litigation against SK Energy Americas and Vitol. In 2020, the California Department of Justice filed a lawsuit alleging that the multinational gasoline firms took advantage of market disruption following a 2015 explosion at a gasoline refinery in Torrance, California to drive up gas prices for their own profit.

Connecticut

  • Connecticut Attorney General William Tong testified in support of House Bill 5463, which seeks to strengthen the state’s ability to combat price gouging. House Bill 5463 “An Act Concerning the Authority of the Office of the Attorney General to Bring an Action Against a Seller Who Engages in Price Gouging During a Disaster or Emergency” would extend the state’s ability to bring price gouging enforcement actions against bad actors and sellers higher up the supply chain.
  • Attorney General William Tong and acting United States Attorney for the District Court of Connecticut Leonard C. Boyle announced a $192,699 joint state and federal settlement with the Windham Eye Group and its owners William Kaufold, MD and Dana Woods, MD resolving allegations that the Windham-based ophthalmological practice improperly employed an individual who was excluded from work with federal healthcare programs.

Delaware

  • Delaware Attorney General Kathy Jennings, the DOJ’s Consumer Protection Unit, and the DOJ’s Investor Protection Unit issued cautionary advisories for consumers and investors related to the risk of scams, cyberattacks, and investment threats related to the conflict in Ukraine.

Florida

  • Florida Attorney General Ashley Moody issued a consumer alert warning Floridians about charity scams attempting to exploit Florida Highway Patrol Master Trooper Toni Schuck, who risked her life by driving a patrol vehicle in front of a speeding drunk driver to protect runners.
  • Attorney General Moody warned Floridians about scams related to the 2022 tax-filing deadline, outlining common tax scams and tips about how to avoid them.
  • Attorney General Moody also issued a consumer alert warning Floridians about potential cyberattacks due to growing tensions in Europe.

Illinois

  • Attorney General Raoul convened a meeting with representatives of Metro East law enforcement agencies, the retail industry and lawmakers to discuss collaborations to strengthen investigations and prosecutions of individuals and enterprises involved in organized retail crime.

Michigan

  • Michigan Attorney General Dana Nessel provided consumer protection reminders regarding auto insurers’ issuance of $400-per-vehicle refunds to eligible Michigan policyholders.
  • Attorney General Nessel presented on consumer protection measures for the state’s senior population as the Elder Abuse Task Force (EATF) launches its latest resource focused on the rights of residents living in nursing homes.
  • Following a Notice of Intended Action, Attorney General Nessel reached an Assurance of Voluntary Compliance (AVC) agreement with pharmacies located in Holland, Madison Heights, Birch Run, and Bay City addressing complaints related to at-home COVID-19 test kit pricing.

New York

  • New York Attorney General Letitia James announced that her office recovered more than $40,000 in refunds for New Yorkers who had their events cancelled at the Falkirk Estate & Country Club (Falkirk) in the Hudson Valley due to pandemic-related shutdowns. Couples reported that Falkirk refused to refund them their deposits when their weddings were cancelled due to pandemic restrictions on large gatherings. In an agreement with Falkirk, the venue will repay two couples $18,300 and provide additional refund payments for any other individuals who made deposits between June 26, 2020 and May 19, 2021 but were denied refunds.

North Carolina

  • North Carolina Attorney General Josh Stein released a statement on the federal DO NOT Call Act (H.R. 4919), sponsored by Rep. Deborah Ross (NC-2). In the statement, Attorney General Stein condemned robocalling and urged the passage of the DO NOT Call Act.

Washington

  • Washington Attorney General Bob Ferguson filed consumer protection lawsuits against two companies and their owners for sending more than 210,000 deceptive letters to small business owners in Washington. The letters deceptively appear to originate from the government, and demand payment for a “Certificate of Status” or a workplace poster that are available free of charge or for a fraction of the monetary demand.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • Nevada Attorney General Aaron Ford and Delaware Attorney General Kathy Jennings, co-chairs of the Democratic Attorneys General Association, released a statement regarding the Democratic Attorneys General efforts to protect the Affordable Care Act (ACA). The Attorneys General reaffirmed their commitment to continue defending the ACA and thanked the Biden-Harris Administration “ensuring that affordable health care is a right for every American.”
  • A coalition of 23 Attorneys General, led by California Attorney General Rob Bonta, filed a motion to intervene in defense of federal greenhouse gas emissions standards (GHG) for light-duty vehicles. The coalition argues that the GHG standards are critically important to states, which are already experiencing the economic, public health, and environmental impacts of climate change.
  • A coalition of 14 Attorneys General, led by Indiana Attorney General Todd Rokita, filed a complaint requesting that the Biden administration respond to Freedom of Information Act (FOIA) requests filed last fall on behalf of various states. The FOIA requests seek federal officials’ communications preceding an Oct. 4 Department of Justice memo that called for FBI surveillance of parents expressing opinions at school board meetings and other forums.

Arizona

  • Arizona Attorney General Mark Brnovich announced his agreement to enter a consent judgment, pending court approval, with home security company Vivint, Inc., which allegedly made false representations, primarily through door-to-door salespeople, to induce consumers to sign contracts. Under the consent judgment, Vivant will pay $75,000 for restitution to Arizona consumers.
  • Arizona Attorney General Mark Brnovich announced a proposed consent judgment that will require CashCall, Inc., its owner, and a wholly-owned subsidiary WS Funding LLC for allegedly providing personal loans at interest rates as high as 169 percent. Under the consent judgment the defendants will be required to pay $4.8 million in restitution to Arizona consumers.
  • Arizona Attorney General Mark Brnovich announced a consent judgment against a number of telemarketing companies PublisherTech, LLC d/b/a Above CMS, Publisher Wealth Corporation, and Upstarter, LLC, which allegedly solicited consumers by falsely promising substantial income from selling merchandise online. The defendants are required to pay up to $500,000 in restitution and up to $900,000 in civil penalties.
  • Arizona Attorney General Mark Brnovich announced the resolution of a lawsuit filed against auction companies Auction Nation, LLC and Auction Yard, LLC, and their owners for allegedly engaging in “house bidding,” a practice where sellers and auctioneers place bids, typically to raise auction prices up to a “reserve price.” Under the consent decrees (pending court approval), Auction Nation will be required to pay $210,000 and Auction Yard will be required to pay $50,000 in consumer restitution.
  • Arizona Attorney General Mark Brnovich filed an amicus brief in Arizona Republic Party v. Hobbs urging the Arizona Supreme Court to ensure that there is an election manual in place for the 2022 election.

California

  • California Attorney General Bonta announced a $3.25 million settlement with senior living operator Brookdale Senior Living, Inc., resolving allegations that Brookdale’s California skilled nursing facilities failed to adequately notify and prepare residents for both transfers and discharges and misrepresented its quality of care to the public by reporting false information, including over-reporting the number of hours that nurses provided care to residents, to the Centers for Medicare & Medicaid. The settlement also requires Brookdale to appoint a monitor to oversee compliance at its Kern County Facility and to cease engaging in the illegal practices alleged in the complaint.
  • California Attorney General Bonta issued a statement following the Environmental Protection Agency’s (EPA) final action restoring California’s waiver under the Clean Air Act for its greenhouse gas and zero-emission vehicle programs.
  • California Attorney General Bonta announced the arrests of 14 individuals charged in connection with hospice companies New Hope Hospice, Inc. and Sterling Hospice Care, Inc., which allegedly stole over $4.2 million from the federal and state Medicare programs. For example, the defendants allegedly enrolled individuals who were not terminally ill into hospice care, many times without the individuals’ knowledge or consent.
  • California Attorney General Bonta released an alert reminding employers and workers that noncompete agreements are not enforceable in California and urged individuals who are wrongfully presented with a noncompete agreement to know their rights.

Florida

  • Florida Attorney General Ashley Moody announced an arrest of the owner and COO of Cornerstone Community Mental Health Services for allegedly defrauding the Medicaid program out of more than $148,000. The defendants are facing felony charges and penalties.

New York

  • New York Attorney General Letitia James announced a settlement with energy services company, Family Energy for allegedly deceiving and misleading thousands of consumers in the state with false promises of savings, and then charged them significant early termination fees when they tried to cancel their contracts. The settlement requires Family Energy to pay $2.15 million in restitution.
  • New York Attorney General Letitia James announced a coalition of 30 national, state and local advocacy groups calling on the U.S. Department of Justice to launch a federal investigation into Texas Governor Gregg Abbott’s recent directive to treat gender-affirming care for transgender children as child abuse. Their letter to the Department of Justice argues that the Texas order is discriminatory, potentially unlawful, and does untold harm to trans youth in Texas.

Pennsylvania

  • Pennsylvania Attorney General Josh Shapiro announced six settlement agreements with owners of the furniture store Ashley HomeStore for alleged “Hang Tag” law violations. The Hang Tag law requires that, if a retailer offers rental purchase agreements, basic terms of the transaction must be displayed to consumers on a hang tag that is physically attached to the item offered for rental purchase. All Ashley HomeStores in Pennsylvania are now required to provide consumers with clear information, including “hang tags” on rent-to-own items displayed in stores.

Washington

  • Washington Attorney General Bob Ferguson filed a lawsuit against US Stemology and its owner for deceptively marketing stem cell treatments for COVID-19 and dozens of other serious medical conditions, including asthma, lupus, Parkinson’s, congestive heart failure, and multiple sclerosis. The lawsuit seeks restitution of at least $748,250 and $12,500 in civil penalties, including enhanced civil penalties of $5,000 per violation.

Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.

Multistate

  • A coalition of nine attorneys general successfully challenged bankruptcy plan in the forty-eight state lawsuit against Purdue Pharma for deceptive advertisement of OxyContin. The bankruptcy plan was approved in Sept. 2021. The nine states that challenged the plan settled for an additional $1.175 billion. Purdue Pharma has appealed the original bankruptcy plan, and the newly proposed settlement is contingent on the approval of the bankruptcy plan. The money must be used to help states, cities, and tribes tackle the continued harms of the opioid crisis.
  • A bipartisan coalition of attorneys general launched a nationwide investigation into whether TikTok operates and promotes its social media platform to children and teenagers in a manner that either causes or exacerbates physical and mental health harms. Various attorneys general have expressed concern about the negative effects of social media platforms on young adults. The investigation will focus on methods utilized by the platform to encourage engagement, increase the duration of time spent on the platform and increase the frequency of use of the platform. The investigation is led by attorneys general from California, Florida, Kentucky, Massachusetts, Nebraska, New Jersey, Tennessee and Vermont.
  • Many state attorneys general issued notices alerting consumers of the 2021 T-Mobile data breach and highlighted steps for consumers to protect their personal information. The T-Mobile data breach occurred August 2021, and compromised sensitive personal information of millions of current, former and prospective customers, affecting over 53 million individuals. Many states have warned consumers about possible identity theft attempts.
  • A handful of state attorneys general issued notices warning consumers about potential issues related to the crisis in Ukraine. For example, New York Attorney General James issued a notice about potential price gouging and cybersecurity threats. Michigan Attorney General Nessel issued a notice about fraudulent charities and reminded consumers to be vigilant prior to sending money to an unknown entity.
  • Many state attorneys general issued notices recognizing National Consumer Protection Week, offering consumers advice and warnings about common consumer protection issues and highlighting resources provided by the offices of attorneys general. The notices highlighted common issues such as construction fraud, vehicle fraud, telecommunications scams, consumer debt scams, online purchasing scams and identity theft.

Colorado

  • Colorado Attorney General Weiser announced three settlements, based on his ongoing investigation of the auto-lending guaranteed automobile protection (GAP) market. Ent Credit Union, Premier Members Credit Union and Credit Union of Denver distributed refunds to tens of thousands of Colorado borrowers totaling around six million dollars after failing to return GAP fees to consumers. Investigations into the GAP market, found that lenders neglected to refund unearned fees, which is required by Colorado law.
  • Colorado Attorney General Weiser announced that he requested the U.S. Department of Transportation to investigate Frontier Airlines regarding flight change policies and customer service practices. Attorney General Weiser has previously requested that the Department of Transportation investigate Frontier Airlines for similar issues and consumer complaints.
  • Colorado Attorney General Weiser announced that the Unemployment Fraud Task Force referred 17 criminal cases for prosecution to Colorado’s district attorneys, the Attorney General’s Office, and the U.S. Attorney’s Office in its first year. The task force was launched last year to address pandemic-related fraud against the state and to investigate identity theft and employment fraud.

Georgia

  • Georgia Attorney General Carr announced a settlement with Evergreen Publishing Group, LLC, Readers Services, Inc. and their owner, Chris Sidhilall resolving allegations of deceptive telemarketing activities in the course of selling magazine subscriptions. The settlement required the companies to cease telemarketing and the collection of any payments, and to pay approximately $100,000 to the Office of the Attorney General.

Illinois

  • Illinois Attorney General Raoul announced that Edmund Kavanaugh pled guilty to charges of home repair fraud and theft. The defendant, using his business, Goliath Construction, defrauded customers out of thousands of dollars by failing to complete agreed upon home repairs.

Massachusetts

  • Massachusetts Attorney General Healey announced GM Financial agreed to pay more than $1.8 million to resolve allegations that the company’s business practices violated state consumer protection laws. GM Financial allegedly failed to pay legally-required interest after delaying refunds of guaranteed asset protection enrollment fees.

Missouri

  • Missouri Attorney General Schmitt announced a lawsuit against ProCare Pools, LLC for unlawful business practices. The lawsuit alleges the defendants received advance payments for pool installations and maintenance services that were never provided.
  • Missouri Attorney General Schmitt announced a lawsuit against Rainworks Irrigation Co. for unlawful business practices. The lawsuit alleges the defendants received advance payments for irrigation system maintenance services that were never provided.

New York

  • New York Attorney General James announced a rulemaking process to investigate whether corporations are using the pandemic and inflation as an excuse to unfairly raise the price of basic goods. This marks the first price gouging rulemaking process by the New York Office of the Attorney General and it will examine evidence to determine whether recent price hikes were designed to increase profit versus address the increase in costs. The process may lead to the Office of Attorney General implementing new price gouging rules to address profiteering and corporate greed.

Washington

  • Washington Attorney General Ferguson announced the state legislature passed House Bill 1616 to increase access to affordable healthcare. The bill will expand charity care eligibility to more than one million Washingtonians and guarantee free hospital care to an additional one million Washingtonians who are currently eligible for discounted care. Attorney General Ferguson has previously filed three lawsuits against Washington hospitals for alleged violations of the state Consumer Protection Act for preventing low-income patients from accessing charity care. The bill was introduced as an “Attorney General Request” bill.
  • Washington Attorney General Ferguson announced the state legislature passed Senate Bill 5793 to reduce barriers for low-income individuals with relevant lived experiences to participate in state task forces and workgroups by paying a stipend for their work. Attorney General Ferguson introduced this bill as an “Attorney General Request” bill.
  • Washington Attorney General Ferguson announced the state legislature passed House Bill 1725 unanimously, creating an alert in Washington state to help identify missing Indigenous women and people. The system would operate similar to “silver alerts” for missing vulnerable adults and would send broadcast messages through varied public notice tools. Attorney General Ferguson introduced this bill as an “Attorney General Request” bill.