Multistate Actions

Led by Massachusetts Attorney General Maura Healey, Nebraska Attorney General Doug Peterson, Tennessee Attorney General Herbert H. Slatery III, and Vermont Attorney General T.J. Donovan, a bipartisan coalition of 44 attorneys general urged Facebook to abandon its launch of Instagram Kids, a social media platform for children under the age of 13. The letter cited numerous sources documenting the harmful effects of social media platforms on children and dangers to younger children in particular.

Led by Florida Attorney General Ashley Moody and New York Attorney General Letitia James, a bipartisan coalition of 47 attorneys general endorsed the Fraud and Scam Reduction Act (H.R. 1215), which has already passed the House of Representatives and is awaiting a vote in the Senate. This legislation would create the Senior Scams Prevention Advisory Group and the Senior Fraud Advisory Office within the Federal Trade Commission and improve interagency coordination on efforts to protect seniors from falling victim to fraud and scam attempts.

Led by Colorado Attorney General Phil Weiser, Iowa Attorney General Tom Miller, Nebraska Attorney General Doug Peterson, New York Attorney General Letitia James, Texas Attorney General Ken Paxton, and Utah Attorney General Sean Reyes, a bipartisan coalition of 45 attorneys general wrote a letter urging Congress to support state antitrust efforts, noting the critical roles that attorneys general provide in antitrust enforcement and current bipartisan legislative proposals to increase funding for federal antitrust enforcement agencies.

Led by District of Columbia Attorney General Karl Racine and Nebraska Attorney General Doug Peterson, a bipartisan coalition of 41 attorneys general urged Congress to provide adequate funding for the Legal Services Corporation, which provides legal aid services to low-income clients through more than 800 offices nationwide.

A bipartisan coalition of 6 attorneys general, including Arizona, California, Indiana, Michigan, North Carolina, and Wisconsin, along with the Federal Trade Commission, filed suit against Frontier Communications, alleging the company did not provide internet service at the speeds it promised and charged many consumers for more expensive and higher-speed services than Frontier actually provided.

Colorado Attorney General Phil Weiser and Wyoming Attorney General Bridget Hill announced a $1 million settlement with two magazine subscription companies that allegedly targeted older consumers nationwide. Atlantic Publishers Group, LLC and Publishers Partnership Services, LLC, operating out of Colorado and Wyoming respectively, allegedly sent millions of deceptive mailers designed to look like renewal notices for consumers’ legitimate existing subscriptions. In fact, the companies had no affiliation with the magazines and the renewal rates were much higher than could be obtained through the usual renewal process. The companies and their owners agreed to pay $500,000 to each state and to be banned from operating magazine subscription businesses in both states.

Individual Attorney General Actions

Arizona Attorney General Mark Brnovich obtained a settlement with an Arizona hearing device company to stop allegedly deceptive advertising. The attorney general alleged that Budget Hearing Aids (Budget) and a subsidiary, Audien, advertised its devices as being “FDA APPROVED” or “FDA REGISTERED” when the FDA has not approved any over-the-counter hearing aids. The settlement required Budget to remove the FDA logo and the terms “FDA APPROVED,” and “FDA REGISTERED” from any of its advertising.

Arkansas Attorney General Leslie Rutledge obtained a $2.6 million judgment against timeshare exit company Real Travel, LLC, and the company’s founder, Brian Scroggs. Through owners Scroggs and Bart Bowe, the now-defunct Bentonville-based company, allegedly peddled its timeshare exit services to consumers nationwide, charging consumers exorbitant fees but did not deliver on their guarantees to help consumers transfer or cancel their timeshare property interests. In October, Rutledge received a judgment against Bowe requiring he pay $50,000 in restitution and $450,000 in suspended civil penalties. Attorney General Rutledge also sued two chiropractic clinics for allegedly dumping patients’ personal information in a public park in violation of Arkansas’s Personal Information Protection Act and its deceptive trade practices act.

California Attorney General Rob Bonta announced arrests and arraignments in an alleged $15 million mortgage fraud and green loan scheme in Southern California. The defendants allegedly ran a scheme that used stolen identities to obtain mortgage and “green” loans, funding available for licensed contractors for energy-efficient home improvements. The defendants also allegedly used their false identities to obtain mortgage loans from conventional banks and lenders for years, culminating in a loss of $15 million. Attorney General Bonta also announced guilty pleas of 9 defendants in a $6 million mortgage relief scheme that affected over 200 properties. Many homeowners lost their homes to foreclosure despite paying the group hundreds of dollars a month over the course of many years.

Colorado Attorney General Phil Weiser filed suit against Pennsylvania Higher Education Assistance Authority, operating as FedLoan Servicing and AES, one of the largest servicers of federal student loans. The company allegedly refused to fully comply with Colorado law requiring it to submit to oversight under a 2019 Colorado statute authorizing the attorney general to license student loan servicers and oversee their operations. Attorney General Weiser also obtained $121,983 in refunded GAP insurance benefits from American Assurance Corporation which allegedly failed to pay 171 Colorado vehicle owners their full benefit. Guaranteed automobile protection (GAP) is an optional benefit offered to car buyers who finance their purchase. If a buyer’s car is totaled in an accident, the buyer’s auto insurance typically pays only the fair market value of the car, which can be less than the amount owed on the buyer’s loan.

Illinois Attorney General Kwame Raoul settled with an allegedly fraudulent tax preparation company, obtaining $100,000 in consumer restitution for 59 Illinois consumers. The company, Su Familia, purportedly offered low-cost tax preparation services but ended up charging consumers for expensive additional fees, sometimes as much as $1,000 and gave them fake tax returns showing lower tax refunds to hide its unauthorized fees.

Indiana Attorney General Todd Rokita issued additional civil investigative demands (CIDs) in his investigation of alleged censorship practices of big tech companies including Amazon, Apple, Facebook, Google, and Twitter. The CIDs were issued to eight individuals who allegedly attended an October 2019 meeting with Facebook CEO Mark Zuckerberg and other Facebook executives where the social media platforms’ moderation policies were discussed.

Kansas Attorney General Derek Schmidt announced that a business was ordered to pay a $3,300 fine for selling counterfeit vaping products. The action was the fourth taken by Schmidt’s office in the past nine months related to misbranded counterfeit vaping products.

Maryland Attorney General Brian E. Frosh filed two actions against debt consolidation companies and their owners for allegedly wrongfully converting customers’ payments for personal use. Marcia L. Bailey and Arthur Wittenberg, along with their entities Marcia Bailey Inc. trading as Signature Accounting, and the Wittenberg Family Trust, which offer and sell debt consolidation services to consumers in Maryland and other states face charges filed by Frosh’s Consumer Protection Division. Attorney General Frosh also released guidance for residential tenants facing eviction.

Massachusetts Attorney General Maura Healey sued multinational marketing firm Publicis Health, LLC, alleging that deceptive marketing schemes it created helped Purdue Pharma sell more OxyContin, fueling the opioid crisis.

Minnesota Attorney General Keith Ellison won relief for tenants who were wrongfully required to move from their premises in violation of COVID-related restrictions. The settlement requires the landlord to pay $3,573.86 in part to reimburse the tenants for their out-of-pocket costs in being forced out of their home.

Missouri Attorney General Eric Schmitt filed charges against Kristofer Bain, a contractor alleged to have defrauded consumers in connection with home improvement projects. The charges claim that Bain and his business, Telos Contracting LLC, defrauded consumers out of a total of $164,500.

New Hampshire Attorney General John M. Formella announced the indictment of Elvis Guzman in a grandparent scams case. Guzman allegedly targeted 11 elderly New Hampshire residents, conspiring with others to pose as grandchildren who had been arrested and needed money for bail. The indictment alleges theft by deception of more than $100,000 in total from the victims.

New Jersey Attorney General Gurbir Grewal obtained a $69,000 settlement with NRG Residential Solar Solutions (NRG) to resolve allegations that NRG used deceptive sales practices to mislead consumers into leasing solar energy panels, failed to deliver promised energy savings, and made misrepresentations regarding servicing, installation, and financing.

New York Attorney General Letitia James issued a report detailing her office’s investigation into allegedly fake public comments submitted to the Federal Communications Commission (FCC) in a 2017 proceeding to repeal net neutrality rules. In addition, the Attorney General announced $4.4 million in settlements with 3 lead generators, Fluent, Inc., Opt-Intelligence, Inc., and React2Media, Inc., who were allegedly responsible for millions of the fake comments. Attorney General James also won dismissal of the National Rifle Association’s Texas bankruptcy case, meaning the New York Attorney General’s case seeking dissolution of the NRA may continue in New York state court. The U.S. Bankruptcy Court for the Northern District of Texas stated in its Order: “the Court finds there is cause to dismiss this bankruptcy case as not having been filed in good faith both because it was filed to gain an unfair litigation advantage and because it was filed to avoid a state regulatory scheme.”

North Carolina Attorney General Josh Stein obtained more than $600,000 in financial relief for borrowers with loans from Alpha Finance Company (Alpha), a North Carolina-based lender that closed in July 2019 and left some borrowers with outstanding secured loans that had balances and others with paid-off loans whose liens had not been cancelled by Alpha. Stein obtained a default judgment which provides that all consumers’ outstanding loans made under the Retail Installment Sales Act are cancelled and all affected liens will be released. The judgment also imposed $100,000 in civil penalties.

Oklahoma Attorney General Mike Hunter reached an agreement with FFF Enterprises to return the state’s stockpile of hydroxychloroquine, purchased by the Oklahoma State Health Department, and receive a full refund. The department made the purchases after the U.S. Food and Drug Administration granted emergency use authorization (EUA) for the drug as a treatment for the COVID-19 virus, but the EUA was later revoked.

South Dakota Attorney General Jason Ravnsborg announced the sentencing of a woman in an identity theft case. The state alleged that Amy Violet Schmidt knowingly and intentionally misused financial information while she worked at a facility that provides care to elders. Schmidt, who pled guilty, was sentenced to 2 years in prison and ordered to pay $464.85 in restitution.

U.S. Virgin Islands Attorney General Denise George announced the arrest of a contractor, Henry Peters, for allegedly defrauding five consumers by inducing them to pay thousands of dollars for work that he has never completed.

Vermont Attorney General T.J. Donovan reached settlements with nine 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. It is illegal to sell electronic cigarettes and related “vaping” products over the internet to individual Vermont consumers. In total, the companies will pay $157,500 in civil penalties to the state of Vermont.

Virginia Attorney General Mark Herring obtained more than $12,000 in restitution from a travel company Key Tours International Inc., for failing to refund customers who cancelled trips due to the pandemic. The settlement also set up a 180-day claims period for additional claimants to apply for refunds.

Washington Attorney General Bob Ferguson sued alleged “patent troll,” Landmark Technology A, LLC (Landmark), for its predatory practices that target small businesses. Ferguson’s complaint was filed under Washington’s Patent Troll Protection Act which prohibits bad faith assertions of patent infringement. Landmark allegedly sent threatening letters in bad faith to over a thousand small businesses nationwide, demanding $65,000 in patent licensing fees. When five Washington small businesses refused to pay, Landmark sued them claiming infringement of a patent that the U.S. Patent and Trademark Office has deemed likely to be declared invalid. The businesses settled with Landmark to avoid the expense of a lawsuit. Ferguson’s suit seeks restitution and injunctive relief barring bad faith enforcement of the allegedly dubious patent.

Other articles in this edition include:

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