Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Monday, May 17, 2021:
- The Consumer Financial Protection Bureau (“CFPB”) asked a Massachusetts federal district court to enter a final judgment and order that would require DMB Financial, LLC to pay consumers at least $5.4 million for illegal fees it charged for debt settlement and for failing to provide required disclosures, in addition to a nominal civil penalty due to the company’s limited financial resources. The CFPB is alleging that DMB’s conduct violated the Telemarketing Sales Rule and the Consumer Financial Protection Act.
- The Consumer Financial Protection Bureau (“CFPB”) announced that five federal financial regulatory agencies will extend the comment period on how financial institutions use artificial intelligence (“AI”) in their activities and the challenges AI presents until July 1, 2021.
- On May 14, 2021, Middle District of Tennessee Judge Richardson declined to block the Consumer Financial Protection Bureau’s (“CFPB”) rule requiring landlords to inform tenants about federal protections due to the pandemic. The Judge found that the rule does not apply where the CDC order does not apply such as in some Sixth Circuit jurisdictions, and that it does not violate the First Amendment because it does not require false speech.
- California Attorney General Bonta is warning providers not to charge for the COVID-19 vaccine, saying his office has already sent several cease and desist letters related to these charges and that charging for the vaccine is a potential violation of the civil False Claims Act and other civil and criminal laws.
- A coalition of 23 attorneys general led by California Attorney General Bonta and New York Attorney General James sent a comment letter to the U.S. Department of Health and Human Services applauding its Proposed Rule to undo a 2019 Title X Rule, which the attorneys general believe reduced access to healthcare services related to family planning counseling, access to contraceptive methods, and critical screenings for health conditions.
Tuesday, May 18, 2021:
- New York Attorney General James announced a $200,000 settlement with online water filtration retailer Filters Fast resolving a 2019 data breach that compromised over 300,000 consumers’ personal information. In connection with the settlement, Attorney General James stated, “Filters Fast fell far short of its responsibilities of protecting its customers against attacks on its online platform, and of promptly informing customers of any such attack so that they could take the necessary steps to protect their identities. Online information security has been especially critical during the COVID-19 pandemic, during which New Yorkers have increasingly relied on online retailers, such as Filters Fast, to purchase basic household goods. My office is committed to protecting consumers, which is why we will continue to use every available tool to hold companies accountable when they fail to safeguard personal information.” The agreement also includes injunctive relief.
- Virginia Attorney General Herring announced a settlement with travel company Key Tours International Inc. resolving claims that it did not honor its refund terms in contracts with consumers who purchased vacation packages that were cancelled due to the pandemic. The settlement includes a partially suspended civil penalties payment, $12,838.15 in restitution, and attorneys’ fees.
- Michigan Attorney Genera Nessel sent a notice of intended action to Skin Envy, LLC, which operates non-surgical weight-loss centers in Michigan, after its owner allegedly made misleading claims about injections’ ability to prevent COVID-19. The owner also allegedly claimed that the procedures improve immunity without mentioning their potential side effects.
- A coalition of 19 attorneys general is asking President Biden to support energy infrastructure, including the Keystone XL Pipeline, after the Colonial Pipeline shutdown. The coalition is arguing that energy infrastructure is necessary for domestic energy needs and to maintain the United States’ leadership position as a net-energy exporter.
- Connecticut Attorney General Tong applauded the Connecticut House of Representatives’ passage of legislation to strengthen Connecticut’s ability to enforce against price gouging. If it is passed in the Senate, the new legislation would extend price gouging enforcement beyond retail sales, define price gouging as an “unconsciously excessive price,” mirroring New York’s language, and include rentals and leases.
- Washington D.C. Attorney General Racine applauded Congress’ passage of bipartisan legislation, the Jabara-Heyer NO HATE Act, providing state and local governments and law enforcement agencies with resources to identify, report, and understand hate crimes with the goal of preventing them.
- Florida Attorney General Moody is asking Congress to enact the Federal Initiative to Guarantee Health by Targeting Fentanyl Act (“the FIGHT Fentanyl Act”). The FIGHT Fentanyl Act would add fentanyl-related compounds to Schedule I of the Controlled Substances Act, which are only currently on Schedule I temporarily until October 22, 2021. Attorney General Moody believes that permanently placing fentanyl-related compounds on Schedule I would better protect communities’ health and safety.
- Connecticut Attorney General Tong is asking the Public Utilities Regulatory Authority to reject Connecticut Water Company’s proposed $20 million rate increase, saying the proposed increase includes several excessive and unnecessary costs.
Wednesday, May 19, 2021:
Federal Trade Commission
- The Federal Trade Commission (“FTC”) and six states filed a lawsuit against Frontier Communications, alleging that it failed to provide consumers the DSL internet speeds promised and charged others for more expensive and higher-speed service than it was giving them. The complaint alleges that Frontier violated state laws and the FTC Act by misrepresenting the service it would provide as well as that it engaged in unfair billing practices.
- Nevada Attorney General Ford announced the sentencing of the owner of Spirit of David Behavioral Health, LLC in a Medicaid fraud case that involved failure to maintain adequate records. The sentence includes a $100,000 restitution payment.
- North Carolina Attorney General Stein announced the sentencing of the owner of home health provider Agape Healthcare Services Inc for health care fraud, wire fraud, aggravated identify theft, and conspiracy to commit money laundering, after the defendant billed the state Medicaid program for services that were not provided. The defendant has also been ordered to pay $13,396,921 in restitution.
- Vermont Attorney General Donovan filed an amicus brief in support of the Koffee Kup, et al. Emergency Motion to Compel Receiver to Pay Urgent Payroll Deductions, after the court-appointed receiver and Key Bank refused to pay $797,568.17 in accrued paid time off to employees after Koffee Kup closed earlier this year. Vermont is arguing that the court should compel the receiver and bank to give the employees the paid time off funds, as they are deemed “wages.”
Thursday, May 20, 2021:
- Colorado Attorney General Weiser announced that his office entered into a settlement agreement with American Assurance Corporation for failing to pay full guaranteed automobile protection (“GAP”) coverage to Colorado vehicle owners. The agreement requires the company to pay $121,983 in refunds to the consumers.
- Kentucky Attorney General Cameron announced a partnership with the Kentucky Beer Wholesalers Association to raise awareness of human trafficking in its “Your Eyes Save Lives” campaign. As part of the campaign, the Attorney General’s Office and Association will provide training materials to beer distribution employees.
- Connecticut Attorney General Tong, United Illuminating, and other settling parties filed a joint letter with the Public Utilities Regulatory Authority (“PURA”) clarifying PURA’s questions and reaffirming their commitment to a $46.5 million COVID relief bill credit which would decrease and stabilize electric rates until 2023.
- New York Attorney General James announced that she won the right to intervene in a Southern District of New York lawsuit against conspiracy theorists who threatened robocalls to suppress Black voters in the 2020 election.
Elder Fraud & Abuse
- Washington D.C. Attorney General Racine is advising consumers to be vigilant about elder abuse and neglect as well as scams targeting elders during Older Americans Month in May.
Friday, May 21, 2021:
- The Consumer Financial Protection Bureau (“CFPB”) issued a consent order against auto loan finance company 3rd Generation, Inc., which has been doing business as California Auto Finance, for allegedly illegally charging interest for late payments on its Loss Damage Waivers without consumers’ knowledge or consent. The CFPB consent order includes $565,813 in required refunds or credits, a $50,000 civil penalty, and injunctive relief. It also mandates corrected information to credit reporting agencies.
- Kansas Attorney General Schmidt announced that charity A Ride for the Wounded, Inc. has been permanently banned from doing business in Kansas and ordered to pay over $11,000 in damages after it failed to respond to a lawsuit accusing the charity of using funds for personal expenses in violation of the Kansas Charitable Organizations and Solicitations Act.
- North Dakota Attorney General Stenehjem applauded a court order declining to shut down the Dakota Access Pipeline pending an Environmental Impact Statement.
- Kansas Attorney General Schmidt led a coalition of 17 attorneys general in a U.S. District Court for South Dakota brief supporting South Dakota Governor Noem’s lawsuit against the U.S. Department of Interior, asking the court to block the agency’s decision to deny a July 3, 2021 fireworks permit at Mount Rushmore. The agency had raised concerns about the environmental impact and fire risk, as well as about crowding during the pandemic.
- California Attorney General Bonta announced charges against 15 defendants for allegedly conspiring to defraud at least 30 victims of their retirement savings in a Ponzi scheme. The defendants allegedly used their positions as financial advisors to convince the victims to invest in the scheme, making misrepresentations throughout the process.
- Michigan Attorney General Nessel announced charges against the doctor who owns business VCC Services, PLLC for allegedly engaging in insurance fraud by dispensing and billing insurers for prescriptions while lacking the proper license.
- New York Attorney General James announced the introduction of the Police Accountability Act, legislation which if enacted will reform New York’s use of force law, such as by establishing that the use of force is a last resort, and establish criminal penalties for those police officers who use excessive force.