Multistate Actions

Led by Illinois Attorney General Kwame Raoul, North Carolina Attorney General Josh Stein, and Tennessee Attorney General Herbert H. Slatery III, a bipartisan coalition of 45 attorneys general called on Twitter, eBay, and Shopify and online mobile market place OfferUp to act immediately to prevent people from selling fraudulent CDC vaccination cards on their platforms.

Led by Illinois Attorney General Kwame Raoul, a bipartisan coalition of 26 attorneys general urged Congress to rescind the so-called “True Lender Rule,” a regulation promulgated by the Office of the Comptroller of the Currency which the states allege would allow predatory lenders to take advantage of consumers.

Led by Colorado Attorney General Phil Weiser and Oregon Attorney General Ellen Rosenblum, a bipartisan coalition of 24 attorneys general urged the US Department of Education to forgive loans of certain ITT Tech (ITT) students. The states filed a collective borrower defense to repayment application alleging that ITT misrepresented potential post-graduation earnings by more than $100,000 over the average earnings of workers with the same credentials. The misrepresentations were made in recruiting materials given to more than 280,000 students between 2007 and 2010.

Individual Attorney General Actions

Alaska Attorney General Treg Taylor sued opioid manufacturers Teva, Cephalon, and Allergan, alleging they engaged in deceptive marketing practices which played a significant role in increased levels of opioids prescribing and addiction.

Arkansas Attorney General Leslie Rutledge filed a lawsuit involving a puppy scam. The suit alleges that two individuals obtained $160,000 from consumers who believed they were paying for a new dog that was never delivered. The defendants also allegedly posed as representatives from the Little Rock Municipal Airport and falsely told consumers that the airport required another $900 to ship the dog in a specialized crate.

Illinois Attorney General Kwame Raoul and the Federal Trade Commission are returning more than $4 million to consumers who lost money to the Stark Law phantom debt scheme. Stark Law allegedly used a host of business names to target consumers who obtained or applied for payday or other short-term loans, pressuring them into paying debts they either did not owe or that the defendants had no authority to collect. The FTC is mailing consumers full refunds, averaging $375 each.

District of Columbia Attorney General Karl Racine sued baby food company Beech-Nut for allegedly misleading parents about the safety of its products. Beech-Nut allegedly advertised that its baby food underwent the most stringent testing and was fully safe for babies when, in fact, the food contained high levels of toxic heavy metals. Attorney General Racine also sued online lender OppFi for allegedly making predatory and deceptive loans to more than 4,000 District consumers. In addition to making misleading claims, OppFi allegedly charged interest rates of up to 198%—more than eight times the District’s 24% rate cap.

Florida Attorney General Ashley Moody announced more than $11 Million in refunds secured for consumers affected by an alleged credit card interest rate reduction scam. E.M. Systems & Services, its owners and other defendants, allegedly used a variety of phony business names with associated websites, cold-called consumers with credit card debt, and falsely promised to save consumers thousands of dollars by reducing credit card interest rates. The defendants charged an up-front fee between $695 and $1,495, falsely promising to provide refunds to consumers if interest rates were not lowered. The action was brought in conjunction with the Federal Trade Commission (FTC). The FTC’s interactive dashboards for refund data provide a state-by-state breakdown of FTC refunds.

Kentucky Attorney General Daniel Cameron announced the US Sixth Circuit Court of Appeals upheld the constitutionality of Kentucky’s price gouging law. The court lifted a preliminary injunction by the district court, which had prohibited the attorney general’s investigation of alleged price gouging of Kentuckians by third-party Amazon sellers during the COVID-19 pandemic. Kentucky was supported in its appeal by an amicus brief led by Illinois Attorney General Kwame Raoul and joined by a bipartisan group of 31 attorneys general.

Massachusetts Attorney General Maura Healey took action against two finance companies for illegal dog leasing. Dog leases are illegal in Massachusetts and the companies, Credova Financial, LLC and Nextep Holdings, LLC, canceled $126,000 owed by consumers on the leases and agreed to transfer full ownership of dozens of dogs to Massachusetts consumers. Attorney General Healey also secured $89,000 for students from an online for-profit coding bootcamp, resolving claims of high-pressure enrollment and failing to provide proper disclosures. Flatiron School LLC, who offered online and on-campus training programs, allegedly failed to provide information required by Massachusetts regulations prior to students entering their programs including information about tuition and fees, employment statistics, graduation rates, and program completion time.

Michigan Attorney General Dana Nessel obtained consumer restitution in a settlement with Ferrellgas over service disruption issues during January and February 2021. Complaints filed with the attorney general’s office and the Better Business Bureau detailed various issues, such as difficulties in contacting Ferrellgas representatives by telephone, protracted delivery periods following the placement of orders, and an inability to secure expedited fills to resolve situations where homes were without heat when Michigan was under a declared state of emergency due to extreme cold temperatures and heavy snowfall. Restitution of $49,500 is available through a claims process to consumers who were left without heat due to a mistake or failure by Ferrellgas.

Minnesota Attorney General Keith Ellison obtained a settlement barring an allegedly fraudulent student loan debt settlement company from operating in Minnesota. Capital Student Loan Center allegedly falsely promised consumers forgiveness of their federal student loans, but merely enrolled them in federal repayment programs that consumers can enroll themselves in for free. The company then pocketed both up front and monthly fees in violation of Minnesota law regarding debt settlement services. Consumers will receive full refunds through the settlement.

Mississippi Attorney General Lynn Fitch’s case against Johnson & Johnson (J&J) regarding its sale of products containing talc may proceed according to the Mississippi Supreme Court which rejected J&J’s interlocutory appeal. J&J had claimed that the Mississippi Consumer Protection Act does not apply to the labeling of products regulated by the US FDA, and alternatively, that such claims would be preempted. 

New Jersey Attorney General Gurbir S. Grewal announced that an unregistered investment adviser was charged with stealing $644,000 from investors recruited to invest in an unregulated commodities trading group called Think Big Institute, LLC.

New York Attorney General Letitia James obtained 1.2 million eggs for New Yorkers in resolving price gouging allegations against wholesale egg distributor Hillandale Farms Corporation. The eggs – 100,00 cartons – are to be delivered to food banks located throughout the state. The state had alleged that Hillandale had raised its prices to some retailers to almost five times the price it charged immediately prior to the pandemic.

Oklahoma Attorney General Mike Hunter announced a $25 million settlement with Farmers Insurance related to the company’s alleged failure to properly pay approximately one thousand claims regarding earthquake damage.  The settlement creates a claims process for affected consumers to re-submit claims and have them independently reviewed and damage to their property repaired.

Oregon Attorney General Ellen Rosenblum announced a $5.1 million settlement with Boston Scientific, resolving allegations that the company failed to disclose the serious risks and complications of transvaginally-placed surgical mesh. Proceeds of the settlement will go to fund women’s health and Boys & Girls Club programs.

Pennsylvania Attorney General Josh Shapiro settled with online payday lender Think Finance and its debt collector, National Credit Adjusters (NCA). The settlement resolves allegations that Think Finance engaged in a $133 million illegal payday lending scheme and that NCA collected more than $4 million in illegal loan payments. Consumer debt relief and restitution are provided under the terms of this and a prior nationwide class action settlement. The settlement also restricts the company’s owner from engaging in consumer lending activities in Pennsylvania in the future.

Vermont Attorney General T.J. Donovan settled with Strategic IT Partner, which allegedly routed thousands of foreign scam robocalls to Vermonters. The attorney general investigated the company after reports of scam robocalls were received by the Vermont Consumer Assistance Program. The settlement will prevent Strategic IT Partner from bringing any robocalls into the U.S. from abroad unless the company first verifies they are wholly legitimate. The attorney general also announced the formation of a robocall team to assist in the office’s ongoing efforts to combat scam calls in Vermont.

Virginia Attorney General Mark Herring obtained more than $200,000 from online ticket reseller Ryadd, Inc. over COVID-related event cancellations on its platform TicketsOnSale.com. The company allegedly failed to honor its “100% Buyer Guarantee” for events cancelled due to the pandemic.

Washington Attorney General Bob Ferguson obtained a $14.5 million trial verdict against an alleged “trust mill” scheme operator.  The court ordered CLA Estate Services, Inc. and CLA USA, Inc to pay a total of more than $6.1 million plus 12 percent annual interest to 1,100 seniors for misleading them about estate planning and other deceptive conduct. The court also imposed $6.5 million in civil penalties and awarded the state more than $1.8 million in attorney’s fees and costs.

Other articles in this edition include:

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