Multistate Actions
Led by Attorneys General Kwame Raoul (IL), Lynn Fitch (MS), Ellen Rosenblum (OR), and Jonathan Skrmetti (TN), the National Association of Attorneys General sent a letter to the Federal Trade Commission (FTC) on behalf of a bipartisan coalition of 43 state attorneys general to urge the agency to update and strengthen the rules technology companies must follow under the federal Children’s Online Privacy Protection Act (COPPA). The FTC’s proposed rule change would place new restrictions on the use and disclosure of children’s personal information and further limit the ability of companies to condition access to services on users’ consent to monetizing children’s data. The attorneys general also asked the FTC to adopt a comprehensive framework for determining whether services qualify for a proposed parental consent exception and to prohibit operators from abusing the multiple-contact exception in COPPA with engagement-maximizing push notifications. (To read all the recommended updates, read the letter in full.)
A bipartisan coalition of 25 attorneys general announced an airline passenger protection partnership with U.S. Department of Transportation (DOT) in a Memorandum of Understanding. This bipartisan work with the DOT comes at a time when flight disruptions and complaints about the lack of refunds and lost or delayed baggage continue to plague travelers who rely on airline services for business and vacation travel.
The attorneys general of Arkansas, Indiana, Michigan, Missouri, North Carolina, North Dakota, Ohio, and Texas took robocaller repeat offender Rising Eagle Capital and John Caldwell Spiller back to the U.S. District Court for the Southern District of Texas. The bipartisan group of attorneys general filed a Motion to Modify the Stipulated Order and a Motion to Show Cause to enforce court-ordered injunctive terms that banned Defendants’ telemarketing, recover $122 million in suspended penalties, and shut down Defendants’ new telephone-related services.
Twenty-two attorneys general sent a letter urging UnitedHealth Group to provide more assistance to patients and providers harmed by a cyberattack. The bipartisan coalition, led by Minnesota Attorney General Keith Ellison, asked UnitedHealth to offer financial assistance, resolve backlogged claims, and suspend requirements for prior authorizations to protect patients and providers further.
Led by Attorneys General Brian Schwab (DC), Christopher Carr (GA), Andrea Joy Campbell (MA) and Gentner Drummond (OK), the National Association of Attorneys General (NAAG) sent a letter to leaders of the U.S. House and Senate Appropriations Committees urging them to allocate robust funding for the nonprofit Legal Services Corporation (LSC) in the FY2025 budget. The NAAG letter highlights the critical work performed by LSC’s grantees across the nation, from urban centers to small towns. The letter was sent on behalf of a bipartisan coalition of 39 state and territory attorneys general.
Several attorneys general warned consumers about weather-related scams after recent storms struck their states. Georgia Attorney General Chris Carr and Louisiana Attorney General Liz Murrill warned of home repair fraud after tornadoes and severe storms and offered tips to consumers. Indiana Attorney General Todd Rokita warned consumers to be wary of scammers who pose as repairmen but steal consumers’ money or personal information following floods and storms.
Individual Attorney General Actions
California Attorney General Rob Bonta recovered $4.5 million in penalties and other monetary relief from the University of Phoenix for unlawful student recruitment techniques. The settlement, announced on April 25th, resolves allegations that Phoenix and its parent company, Apollo Education Group, Inc., used unlawful tactics to recruit military students from 2012 to 2015 in violation of California’s Unfair Competition Law and False Advertising Law.
Delaware Attorney General Kathy Jennings obtained a preliminary victory for residents in the Pine Haven manufactured housing community after the owner, Blue Beach Bungalows DE, LLC, violated statutory protections afforded to residents. The hearing officer’s opinion found that Blue Beach willfully violated Delaware’s Consumer Fraud Act, among other laws, and ordered the company to pay over $800,000 in penalties, along with rebates of excess rent paid by residents. A number of the Pine Haven residents targeted for eviction by Blue Beach were protected due to a recent amendment to Delaware’s Manufactured Housing Code expanding the definition of a manufactured home.
Illinois Attorney General Attorney Kwame Raoul filed a lawsuit against MV Realty PBC, LLC a related company, and their managers, for allegedly tricking financially strapped consumers into confusing and convoluted 40-year real estate brokerage contracts. The complaint alleges that the defendants market themselves as a real estate brokerage firm providing a “one-of-a-kind,” “innovative” way to conduct real estate transactions. However, according to the complaint, MV Realty aggressively targets vulnerable consumers in dire need of money and locks them into contracts spanning decades with hidden fees and severe limits on their ability to sell their homes. Similar suits against the company have been filed by attorneys general of California, Connecticut, Florida, Georgia, Indiana, Missouri, New Jersey, Massachusetts, North Carolina, Ohio, and Pennsylvania.
Massachusetts Attorney General Joy Campbell issued Advisory Guidance on how state consumer protection and other laws apply to artificial intelligence (AI). The advisory clarifies that AI developers, suppliers, and users must comply with existing state consumer protection, anti-discrimination, and data privacy laws.
Michigan Attorney General Dana Nessel sent a cease and desist letter to Ecoshield Pest Solutions Detroit, LLC for allegedly committing unlawful business practices while selling pest service contracts door-to-door. The letter, announced on April 24, 2024, alleges that the business’s contract unlawfully attempted to waive consumers’ three-day right-to-cancel in its terms and conditions in violation of Michigan’s Home Solicitation Sales Act.
Missouri Attorney General Andrew Bailey launched consumer protection investigation to combat dangerous illicit Delta-8 products. The investigation stems from adverse health incidents occurring both in Missouri and around the nation, specifically incidents harming children. Delta-8 is already illegal or severely restricted in at least 24 states because of the serious health risks it poses to consumers. In March of 2024, six elementary-age children in St. Louis County became so sick that their parents had to pick them up from school after reportedly ingesting Delta-8 products that were packaged as “Nerds Rope Bites and Mad Monkey Sour Strawberry Premium Gummies.” One of the affected children had trouble walking and believed she was being kidnapped when her mother came to pick her up.
New York Attorney General Letitia James secured more than $1.9 million from Nissan dealers that allegedly cheated New Yorkers. The lawsuit alleged that five Nissan car dealerships overcharged thousands of consumers who wanted to purchase their leased vehicles at the end of their lease term. When the consumers returned to the dealerships at the end of their lease to buy their car, the dealerships allegedly substantially overcharged them, either adding miscellaneous “dealership fees” or “administrative fees,” or inflating the vehicle’s price on the invoice. In some instances, customers were allegedly overcharged as much as $7,000 on an $18,000 vehicle. The five dealers will also pay $340,000 in civil penalties.
New Hampshire Attorney General John Formella filed a civil complaint against home contracting businesses for consumer protection violations. The defendants allegedly accepted substantial advance payments from consumers without performing the contracted-for work or refunding consumers. New Hampshire’s complaint seeks to enjoin defendants from operating any construction business in the state.
Washington Attorney General Bob Ferguson succeeded in his case against Seattle plastic surgery provider Allure Esthetic and its owner, Dr. Javad Sajan. In an order granting Ferguson’s partial motion for summary judgment, U.S. District Judge Ricardo Martinez found that Allure’s “pre-service” contracts, which purported to prevent patients from posting negative reviews about the business, violated the federal Consumer Review Fairness Act (CFRA).
Federal Consumer Protection News
Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB or Bureau) announced the actions it has taken to stop allegedly illegal “junk fees” charged by mortgage servicers. The Bureau’s announcement describes the agency’s actions to combat certain fees charged by mortgage servicers, as well as other allegedly illegal practices. CFPB examinations found servicers charging illegal junk fees, such as prohibited property inspection fees, sending deceptive notices to homeowners, and violating loss mitigation rules that help struggling borrowers stay in their homes. According to the report, in response to the CFPB’s findings, financial institutions refunded such fees to borrowers and stopped their illegal practices.
Federal Trade Commission
The Federal Trade Commission is sending partial refunds to thousands of AT&T Mobility LLC customers for misleading customers about its unlimited data plan. The latest refunds, which stem from a $6.3 million settlement announced in 2019, are going to consumers who had not yet received a fund and filed a valid claim with the FTC.
The Federal Trade Commission issued a final rule to promote competition by banning noncompetes nationwide, protecting the fundamental freedom of workers to change jobs, increasing innovation, and fostering new business formation. The new rule, announced April 23, 2024, is expected to increase competition, create new businesses, and higher earnings for workers.
FTC issued a report to Congress on collaboration with state attorneys general on April 10, 2024, highlighting current cooperative law enforcement efforts, best practices to ensure continued collaboration, and legislative recommendations to enhance such efforts. The report, directed by the FTC Collaboration Act of 2021, “Working Together to Protect Consumers: A Study and Recommendations on FTC Collaboration with the State Attorneys General” makes legislative recommendations that would enhance these efforts, including reinstating the Commission’s authority to seek money for defrauded consumers and providing it with the independent authority to seek civil penalties.
Sellers deceived by Online Real Estate listing services Opendoor Labs will receive $62 million in refunds through the FTC. According to the FTC’s August 2022 complaint, Opendoor cheated home sellers by tricking them into thinking that they could make more money selling their home to Opendoor than on the open market using the traditional sales process while saving them money on costs.
In Other Federal News
The U.S. Food and Drug Administration announced a consent decree against Philips Respironics following recall of certain sleep therapy machines. The decree was entered in the Western District of Pennsylvania, which oversees multidistrict litigation concerning machines. The decree includes novel provisions aimed at helping ensure patients receive relief. Phillips will be required to offer a remediation payment option for recalled devices, the first time a device company is providing this option under a consent decree. Thereafter, the court also entered an order granting final approval of a $1.1 billion settlement of economic loss claims related to the machines.
Charities News
Minnesota Attorney General Keith Ellison’s action secured the dismissal of several nonprofit officials over misuse of funds. Ellison announced that his office reached a settlement with Act for East African People (AFEAP). Its founder and former executive director, Ayan Abukar, as well as her daughter and AFEAP’s former treasurer and secretary, were removed from office over millions of dollars diverted from the charity’s assets for improper uses. The Assurance of Voluntary Compliance with the charity did not release Attorney General Ellison’s monetary or other claims against the individuals involved who also face criminal prosecution for their actions.
California Attorney General Bonta announced the final regulations for implementing a new online charitable fundraising law. The final regulations implement Assembly Bill 488, a first-of-its-kind law governing charitable fundraising on internet platforms. The final regulations are the result of an extensive rulemaking process and improve the Attorney General’s ability to supervise crowdfunding websites and other online platforms that perform, permit, or enable solicitations for charitable donations through their platforms. Most notably, starting on June 12, 2024, these charitable fundraising platforms must register with the Attorney General’s Registry of Charities and Fundraisers.
