Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AG’s have taken. Here are this week’s updates.
Monday, Dec. 21, 2020:
- Maryland Attorney General Frosh announced a settlement with the owners of Accurate Optical, a company that operated a chain of eye care and eyewear providers that are now closed. The settlement, which comes after consumer complaints of not receiving eyewear they purchased or refunds, requires the owners to stop selling goods they cannot deliver and to pay back all money collected for eyewear that was not provided.
- Massachusetts Attorney General Healey issued an advisory about consumers’ and dental practices’ rights and responsibilities for COVID-19 related surcharges. The advisory explains that when consumers see a dentist within their insurance network, the contract between the insurer and practice typically prohibits surcharges. However, when surcharges for PPE are allowed, such as when the dentist is out of network or the consumer is uninsured, the dental practice must provide advance notice of the surcharge.
- Maryland Attorney General Frosh warned consumers of illegal unlicensed pop-up COVID-19 testing sites outside of stores and shopping centers and along the road. According to the press release, “These testing sites are not authorized and the individuals operating them are not following CDC guidelines for collecting, handling, and testing clinical specimens from persons for COVID-19, and they could be placing consumers at risk.”
- The Governors of Massachusetts, Connecticut, and Rhode Island and the Mayor of Washington, D.C. signed a Memorandum of Understanding committing to a multistate motor vehicle pollution reduction program. The new program, called the Transportation and Climate Initiative Program, will allow the participating jurisdictions to invest in cleaner, equitable transportation options and create new employment opportunities while improving public health.
- The Michigan Attorney General’s Office signed an Assurance of Voluntary Compliance (“AVC”) with Smokehouse Distribution for alleged price gouging of face masks on the BeamerSmoke website. The AVC requires Smokehouse Distribution to refund consumers who purchased the excessively priced PPE as well as to stop selling masks for COVID-19 purposes and pay a $2,000 fee to cover costs.
- Vermont Attorney General Donovan announced a settlement with Big Brother Security Programs, Inc. for overpriced surgical masks sold to Central Vermont Medical Center (“CVMC”). Among other provisions, the settlement requires the business to provide almost 80,000 units of PPE to CVMC and 10,000 units to the state. In connection with the settlement, Attorney General Donovan stated, “Price-gouging will not be tolerated in Vermont, especially during this historic pandemic. Protecting Vermonters, especially hospitals and medical professionals, from unfair practices involving medical equipment will remain a top priority for my office. I will continue to do all that I can to protect the Vermonters on the front lines of this pandemic so that they can continue to protect us.”
- The Minnesota Attorney General’s Office filed three more lawsuits against restaurants that were operating indoor dining in violation of Executive Order 20-103, which ordered all restaurants to close for indoor on-premises dining until January 10, 2021.
Tuesday, Dec. 21, 2020:
Financial Services | Consumer Financial Protection Bureau
- The Consumer Financial Protection Bureau (“CFPB”) settled with student loan servicers Discover Bank, The Student Loan Corporation, and Discover Products, Inc. for violations of a prior CFPB order, the Electronic Fund Transfer Act, and the Consumer Financial Protection Act of 2010 by, among other things, misrepresenting the minimum loan payments owed as well as the amount of interest paid, not providing all consumer redress required in the prior order, withdrawing payments without authorization, and cancelling or not withdrawing payments without notification. The consent order includes injunctive relief as well as $10 million in consumer redress and a $25 million civil penalty.
- The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against Santander Consumer USA Inc., a nonprime auto loan and lease originator and servicer, for violating the Fair Credit Reporting Act by providing incorrect consumer loan data to consumer reporting agencies in a way where consumers’ credit scores and access to credit could have been negatively impacted. The consent order imposes a $4,750,000 civil penalty and requires the company to take steps to prevent future violations.
- A proposed class action lawsuit is accusing debt collection agency Nationwide Recovery Systems of making unsolicited robocalls, violating the Telephone Consumer Protection Act (“TCPA”). The potential named plaintiff is accusing the agency of calling at least 40 times since fall of 2020, changing the balance of the debt owed with each call. The proposed class is alleging violations of the Florida Consumer Collection Practices Act and Fair Debt Collection Practices Act in addition to the TCPA and is seeking statutory damages, actual damages, and fees and costs.
Wednesday, Dec. 23, 2020:
- Vermont Attorney General Donovan announced that his office reached a $150,000 settlement with TPB International, LLC, which operates vaporfi.com, for violating Vermont’s Consumer Protection Act and its Delivery Sales Ban by selling vaping products to individual consumers. In addition to the monetary penalty, TPB must notify Vermont consumers that the website does not ship to anyone other than licensed wholesaler dealers and retailers. Similarly, Washington Attorney General Ferguson announced that online tobacco retailer Smoker’s Outlet Online must pay $65,885 for illegally sending tobacco products to individuals in Washington state rather than licensed retailers or wholesalers.
- North Dakota Attorney General Stenehjem issued a cease and desist order against Sports Media Marketing for violating the state consumer fraud law, do not call law, and charitable solicitations laws. Sports Media Marketing, which uses several other business names, allegedly made calls to local merchants falsely claiming to represent a local high school and solicited donations and sales. Then the business failed to deliver the promised promotional cups and banners.
- Ohio Attorney General Yost filed two lawsuits against home improvement contractors. One lawsuit was against Roofless General Contracting LLC and Gutter and Downspouts LLC for allegedly failing to provide the services promised and paid for, and the other was against an individual for using fraudulent business name Tunison Construction and failing to complete projects and honor warranties.
Privacy | Data Breach
- 27 attorneys general entered into a $2.4 million settlement with Sabre Corporation, a business which facilitates hotel reservation bookings. The settlement resolves an investigation into a 2017 data breach of Sabre’s reservation system, which exposed information from 1.3 million credit cards. In addition to the monetary element, the settlement requires Sabre to put in place a robust information security program, a written incident response and notification plan, and specific security requirements, as well as to undergo a third-party security assessment and provide a list of all customers notified of the breach.
- A coalition of 12 attorneys general is supporting the challenge against the Keystone XL Pipeline in an amicus brief filed in the Ninth Circuit. The coalition is arguing that the United States Army Corps of Engineers’ decision to reauthorize Nationwide Permit 12, which allows the construction of the Pipeline, is invalid because the Corps did not consult the U.S. Fish and Wildlife Service and the National Marine Fisheries Service as the Endangered Species Act requires before reissuing the permit.