Multistate Actions

A bipartisan coalition of 36 attorneys general announced a $450 million agreement in principle with opioid maker Endo International plc and its lenders as part of Endo’s bankruptcy filing. The tentative agreement would provide up to $450 million to participating states and local governments, ban promotion of Endo’s opioids, and require Endo to turn over millions of documents related to its role in the opioid crisis for publication in a public online archive.

Led by Indiana Attorney General Todd Rokita, Ohio Attorney General Dave Yost, and North Carolina Attorney General Josh Stein, 50 attorneys general announced the formation of a national anti-robocall litigation task force to fight illegal robocalls. The task force recently issued 20 civil investigative demands to 20 gateway providers and other entities allegedly responsible for a majority of foreign robocall traffic. Gateway providers that bring foreign traffic into the U.S. phone network have a responsibility to ensure that the traffic is legal, and the attorneys general are pursuing providers who are not taking sufficient action to stop illegal calls.

A bipartisan coalition of attorneys general sent 2 letters urging the Federal Trade Commission (FTC) to strengthen the Telemarketing Sales Rule to better protect consumers. NAAG sent a letter on behalf of 39 attorneys general in support of the FTC’s proposed changes to repeal exemptions for telemarketing calls made to businesses and provide protections related to negative option products or services. NAAG also sent a letter on behalf of 43 attorneys general urging the FTC to require telemarketers and sellers to maintain additional records of their telemarketing activities, prohibit material misrepresentations and false or misleading statements in business to business (“B2B”) telemarketing transactions, and add a new definition for the term “previous donor.”

Led by Illinois Attorney General Kwame Raoul and Iowa Attorney General Tom Miller, a bipartisan group of 19 attorneys general urged the FTC to address deceptive ‘dark patterns’ in digital advertising. The letter responds to the FTC’s request for information and public comment about revising its business guidance on how to make effective disclosures in digital advertising.

Led by Illinois Attorney General Kwame Raoul and Massachusetts Attorney General Maura Healey, 20 attorneys general called on President Biden and Education Secretary Miguel Cardona to extend and expand the limited public service loan forgiveness (PSLF) waiver currently set to expire on October 31, 2022. The letter notes that many borrowers remain unaware of or confused by the waiver, and that an extension is necessary to enable borrowers to get the information and help they need to secure critical waiver benefits.

Led by Minnesota Attorney General Keith Ellison, a bipartisan group of 10 attorneys general sent a letter supporting a proposed USDA rule to increase transparency in the poultry industry. In the letter, the attorneys general submit that increased transparency will reduce the information imbalance between farmers and processors in the poultry industry, which would make it easier for small poultry farmers to compete for fair pricing terms from large poultry processors.

Led by Pennsylvania Attorney General Josh Shapiro, a bipartisan coalition of 6 attorneys general sued consumer lending company, Mariner Finance, LLC for allegedly deceiving consumers out of millions of dollars. The suit alleges that Mariner Finance charged consumers for hidden add-on products that consumers either did not know about or did not agree to buy, adding hundreds to thousands of dollars to the total amount a consumer owed. Pennsylvania was joined by the attorneys general of the District of Columbia, New Jersey, Oregon, Utah, and Washington.

Led by New York Attorney General Letitia James, a bipartisan group of six states and the Federal Trade Commission filed a lawsuit against rental listing platform Roomster Corp. and its owners John Shriber and Roman Zaks for allegedly duping consumers seeking affordable housing by paying for fake reviews and then charging for access to phony listings. The complaint alleges that Roomster and its owners have taken tens of millions of dollars from largely low-income and student prospective renters who are most in need of reliable housing and can least afford to lose money.

Individual Attorney General Actions

Arizona Attorney General Mark Brnovich resolved a consumer fraud lawsuit against two Tucson Midas locations.  The lawsuit alleges that the two locations charged customers for unnecessary services, including repairs they did not make, as evidenced by undercover photos and video. The proposed consent judgment requires the company to pay $50,000 in restitution to consumers, as well as $22,500 to the state for civil penalties, costs, and attorney’s fees.

Arkansas Attorney General Leslie Rutledge sued an Arkansas truck part marketer and fabricator, Dodge Off Road and its owner Daniel Gaston for allegedly accepting thousands of dollars from consumers to order aftermarket automotive parts but never providing the parts, the installation, or a refund to the customer.

California Attorney General Rob Bonta announced a $15.5 million settlement with Rent-A-Center, one of the nation’s largest rent-to-own companies, for violations of state consumer protection laws relating to allegedly unlawful leasing practices and deceptive marketing. The complaint alleges Rent-A-Center used an inflated “cash price” for its products that was 15% higher than the retail price, potentially costing consumers hundreds of extra dollars, among other violations. The stipulated judgment imposes injunctive terms to deter future misconduct and requires payment of $13.5 million in restitution to California consumers, and $2 million in civil penalties.

Colorado Attorney General Phil Weiser obtained an $18 million settlement from opioid manufacturer Mallinckrodt for its role in allegedly fueling the opioid epidemic. Attorney General Weiser also announced that a statewide grand jury indicted contractor Jeremy Carter on 33 counts of felony theft for allegedly taking payments from clients throughout Colorado to build pole barns and failing to complete the projects,

District of Columbia Attorney General Karl A. Racine won a $4 million court judgment in a lawsuit against Polymer80, a “ghost gun” manufacturer and distributor. The court permanently barred Polymer80 from selling unserialized, untraceable firearms to District residents and ordered the company to pay more than $4 million in penalties for making false and misleading claims about the legality of its products. Attorney General Racine also announced a $2.54 million settlement with Instacart, an online delivery company, resolving a lawsuit alleging that the company misled consumers, used tips left for workers to boost the company’s bottom line, and failed to pay required sales taxes. As part of the settlement, Instacart will pay $1.8 million to the District, which can be used to provide restitution to delivery workers and consumers and cover litigation costs. The company also agreed to release $739,057 in previously-disputed tax payments.

Georgia Attorney General Chris Carr announced a guilty plea by a man who stole more than $230,000 from elderly victims through romance scams. Borin Khoun pleaded guilty to multiple counts of Theft by Taking relating to his involvement in cyber fraud scams targeting 2 older adults in California and Arizona. The case was referred to the Georgia Attorney General’s Office by the Georgia Cyber Fraud Task Force.

Indiana Attorney General Todd Rokita finalized a $2 million settlement with ImmediaDent of Indiana P.C., a chain of dental clinics that closed in March of 2020. The entirety of the settlement will be paid in refunds to more than 22,000 Hoosiers who, according to the state’s allegations, paid for treatments they never received.

Iowa Attorney General Tom Miller obtained agreements to stop doing business in Iowa from three out-of-state land acquisition companies that solicited rural Iowa landowners with offers to purchase land at prices far below market value. Iowa farmland value has increased by 21% since 2021 and the Attorney General alleged offers far below market value was an unfair business practice.

Kansas Attorney General Derek Schmidt announced that a Kansas man and three corporate entities he controlled who provided unlawful autopsy services have been permanently banned from doing business and ordered to pay more than $250,000 in restitution. Shawn Parcells allegedly contracted with a county to conduct coroner-ordered autopsies and failed to conduct them in accordance with Kansas law. Additionally, the petition alleged Parcells performed private autopsies without the presence or supervision of a licensed pathologist or otherwise in violation of consumer protection laws.

Kentucky Attorney General Daniel Cameron obtained a temporary restraining order against a landscaping company that allegedly failed to start work, perform quality work, respond to customer inquiries regarding delays, and to refund money to consumers who terminated their contracts with the company. The order prevents Quality Landscaping LLC from conducting new business in Kentucky, demanding payment from current customers, or disposing of evidence related to the ongoing case.

Maryland Attorney General Brian E. Frosh’s Consumer Protection Division issued a final order imposing a $1.2 million penalty against debt adjusters Marcia L. Bailey and Arthur Wittenberg along with their entities, Marcia Bailey Inc. trading as Signature Accounting and the Wittenberg Family Trust. The defendants allegedly collected hundreds of thousands of dollars from consumers to help them consolidate and pay off outstanding consumer debt but did not provide the promised services. The order also requires a refund of all monies consumers paid.

Massachusetts Attorney General Maura Healey obtained $3.2 million in relief for Massachusetts consumers from a national mortgage servicer to settle allegations that it engaged in unfair and deceptive conduct through its mortgage servicing, debt collection, and foreclosure practices. The proposed settlement alleges that Fay Servicing, LLC failed to take required steps to help homeowners avoid foreclosure under the Massachusetts Act Preventing Unlawful and Unnecessary Foreclosures. In addition, the company allegedly harassed consumers with excessive debt collection calls, failed to inform borrowers of their right to request verification of the amount of their debt, and in some instances, unfairly charged foreclosure-related fees before obtaining authority to foreclose.

Minnesota Attorney General Keith Ellison obtained a $125,000 settlement resolving allegations of deceptive sales practices by a home security system contractor. According to the settlement, Safe Haven Security Services, LLC, an ADT authorized distributor, allegedly instructed salespeople to: introduce themselves as being “from ADT;” falsely tell consumers that the salespeople did not work on commission; and deceptively imply that a realtor or another trusted person at the consumer’s recent real estate closing should have told them that the salesperson would be coming to their home.

Attorney General Josh Shapiro sued Progressive Leasing, a rent-to-own business, for violating a state law requiring clear and conspicuous disclosure of leasing fees to consumers. via a hang tag that is physically attached to the products offered for rent. According to the  lawsuit, agents of the Office of Attorney General visited multiple stores across Pennsylvania that use Progressive Leasing to offer rental-purchase agreements to their customers. The investigation revealed widespread non-compliance with RPAA’s disclosure requirements by Progressive Leasing and its merchant partners.

Tennessee Attorney General Herbert H. Slatery III filed suit against Walgreens alleging the company failed to maintain effective controls against abuse and diversion of opioid medications. This failure directly contributed to the ongoing opioid crisis which created a public nuisance and violated state consumer protection laws.

Washington Attorney General Bob Ferguson announced additional claims in an expanded lawsuit involving charity care and collections practices. The state’s amended lawsuit alleges that the collection agencies operating on behalf of the Providence Health & Services-Washington and affiliated hospitals, Harris & Harris, Ltd. and Optimum Outcomes, Inc.,  illegally failed to inform patients about the availability of charity care discounts before aggressively collecting on their medical debt as required under Washington’s charity care law.

West Virginia Attorney General Patrick Morrisey announced a settlement with Rite Aid that could total $30 million, to resolve a lawsuit that alleged the pharmacy chain failed to maintain effective controls against diversion and contributed to the oversupply of opioids in the state.

Charities

Minnesota Attorney General Keith Ellison obtained an agreement shutting down Welch Charities, a Minnesota nonprofit, and permanently banning its president, Arturo Eguia, from operating a charity, having access to charitable assets, or soliciting charitable contributions in Minnesota. The charity, whose stated mission is to help children start the school year right, operates the annual Indian Bike Week motorcycle festival and fundraising event. The settlement resolves allegations that the charity misused donor funds and that Eguia used funds for personal expenses.

Virginia Attorney General Jason Miyares reached a settlement with JumpStart U2, Inc. f/k/a Jump Start University, Incorporated and related entities, settling charges they violated the law by falsely advertising programs offered to low-income tenant consumers and misrepresenting that the tenant consumers were entering into a “housing program” or “housing initiative” that offered credit counseling, education, and assistance obtaining employment. The settlement provides restitution, debt relief and contains injunctive terms prohibiting future misrepresentations.

Veteran and Servicemember News

California Attorney General Rob Bonta announced the arrest of a Los Angeles man for defrauding military families and California universities of more than $500,000. Don Azul is alleged to have duped more than 40 families with a grandparent or other family member who served in the armed forces into paying at least $500 each for counterfeit California Department of Veterans Affairs College Fee Waiver letters and instructing those families to submit the letters to universities to have their children’s tuition waived when in fact they were not eligible for such a waiver.

Washington Attorney General Bob Ferguson obtained a court order requiring a towing company to cease violating servicemembers’ rights through illegal towing practices. Chuck’s Towing will also pay three service members for illegally selling their cars at auction. The case is part of Ferguson’s ongoing Military & Veterans Initiative to stand up for Washington’s active-duty service members and veterans. It involves engaging and educating service members and veterans about their rights and the resources available to them, vigorously enforcing the legal protections within the Attorney General’s authority, and promoting and facilitating access to civil legal services.

USDOJ settled with two Virginia landlords who agreed to pay $225,000 to resolve allegations that they violated the Servicemembers Civil Relief Act (SCRA) by obtaining unlawful court judgments against military tenants in Virginia Beach, Virginia. USDOJ alleged that the defendant landlords filed false affidavits and failed to file affidavits of military service, violations of the SCRA, prior to obtaining default judgments against numerous servicemembers.

Other articles in this edition include:

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