Led by Idaho Attorney General Lawrence Wasden and Oregon Attorney General Ellen Rosenblum, a bipartisan coalition of 33 attorneys general wrote the Consumer Financial Consumer Protection Bureau (CFPB), calling for stronger consumer safeguards for money sharing platforms and apps. The letter, written in response to the CFPB’s request for comments on its inquiry into “Big Tech Payment Platforms,” noted a rise in complaints against popular payment apps including Apple Pay, Venmo, Square, Zelle, and others. The letter highlighted three major issues that should be addressed: poor customer service, account access difficulties, and increases in third-party scams.
Led by District of Columbia Attorney General Karl Racine, 21 attorneys general wrote the U.S. Department of Housing & Urban Development to address mortgage servicers’ failures to implement federal FHA COVID-19 relief provisions. According to the letter, a number of servicers of FHA-approved lenders are failing to implement loss mitigation options such as payment pauses and forbearances as required by Mortgage Letter 2021-18 which became mandatory on October 21, 2021.
Minnesota Attorney General Keith Ellison and Wyoming Attorney General Bridget Hill led a bipartisan coalition of 16 attorneys general in a letter to the Secretary of the U.S. Department of Agriculture in support of efforts to promote competition in the agriculture industry by strengthening enforcement under the Packers and Stockyards Act. The letter notes that structural changes, including corporate consolidation and changes in sales and marketing practices, have reduced competition in meat processing markets and driven many smaller meat producers out of business. The attorneys general argue that aggressive antitrust enforcement is essential to improve supply chain resiliency and encourages USDA to work actively with states to bolster their efforts to investigate agriculture markets.
Individual Attorney General Actions
Florida Attorney General Moody and the Federal Trade Commission (FTC) obtained $1.8 million in refunds for consumers harmed by an alleged robocall scam. Defendant Lifewatch Inc. allegedly bombarded consumers with more than one billion unsolicited robocalls pitching a variety of products and services, including fraudulent medical alert systems. Many of the robocalls allegedly targeted seniors and tricked consumers into paying for supposedly free in-home medical alert devices. The FTC will send checks directly to defrauded citizens nationwide.
Kentucky Attorney General Daniel Cameron acted to protect storm victims following the devastating wave of tornadoes that struck western Kentucky. Cameron announced creation of a new hotline for Kentuckians to report suspected fraud and warned of disaster-related scams. Cameron’s office also worked with local leaders to implement a contractor registration program to deter “fly-by-night” fraud artists.
Illinois Attorney General Kwame Raoul announced a consent decree With E-cigarette manufacturer Juice Man, LLC. The consent decree effectively prohibits the company from operating in Illinois and resolves allegations the company developed and marketed its products through its website to attract minors. The company was also required to pay the state $45,000 for future consumer protection enforcement and education.
Iowa Attorney General Tom Miller was elected president of the National Association of Attorneys General during its Capital Forum, Dec. 6-8. Attorney General Miller has selected “Consumer Protection 2.0: Tech Threats and Tools” as his presidential initiative. He will host his Presidential Summit in Des Moines, Iowa from August 9-10, 2022.
Massachusetts Attorney General Maura Healey obtained nearly $51 Million from national E-cigarette retailer Eonsmoke, LLC and co-owners Gregory Grishayev and Michael Tolmach, in settlement of allegations they marketed and sold vaping products to young people. The settlement also prohibits future sales, distribution, marketing, or advertising of any tobacco product in Massachusetts. Massachusetts law and regulations set the minimum legal age to purchase electronic smoking devices at 21 and imposes age verification requirements on online retailers. Eonsmoke ceased all operations and dissolved in 2020. Attorney General Healey also obtained a settlement with drug company Collegium Pharmaceutical, Inc., resolving allegations that it deceptively promoted an opioid product to Massachusetts doctors. The company allegedly misled doctors about its opioid product Xtampza ER, marketing it as a safe and responsible alternative to other opioids, even though it has the same active ingredient (oxycodone) as other drugs like Oxycontin. The company agreed to pay $185,000 to resolve the matter and also agreed to stop marketing its opioids directly to prescribers.
Acting New Jersey Attorney General Andrew J. Bruck announced three New Jersey-based health care providers will adopt new security measures and pay $425,000 to settle data breach allegations. Regional Cancer Care Associates LLC, RCCA MSO LLC, and RCCA MD LLC suffered a data breach following a successful phishing attack and then improperly disclosed patient data during a retained third-party’s subsequent notification efforts. The breaches allegedly violated New Jersey’s Consumer Fraud Act and the federal Health Insurance Portability and Accountability Act.
New Mexico Attorney General Hector Balderas settled with Google over children’s online privacy. The settlement resolved two federal court cases filed against Google LLC. Both cases concerned allegations against the company under the federal Children’s Online Privacy Protection Act, or COPPA, as well as under state consumer protection laws. Under the settlement, Google will establish and fund a $3,850,000 Google New Mexico Kids Initiative to promote education, privacy, and safety for kids in New Mexico. Attorney General Balderas also filed a lawsuit against Bob’s LP Gas, Inc. (“Bob’s Gas”) for failure to provide the propane gas they had contracted to deliver to northern New Mexicans as winter weather sets in. The lawsuit alleges that Bob’s Gas is refusing to refill propane tanks of hundreds of customers. The suit seeks an immediate injunction to force the company to either provide propane or allow another company to temporarily fill consumers’ tanks which are leased from Bob’s Gas. The suit follows Balderas’ investigation and consumer advisory on increased cost and unavailability of propane gas.
Pennsylvania Attorney General Shapiro obtained $400K in restitution from home security company THS Group, LLC (“Total Home Protection”), resolving allegations of wrongfully denied claims, failure to provide services and falsely advertising services and coverage. As part of the settlement the company also agreed to revise their business practices and pay the Commonwealth $200,000 in costs and $150,000 in civil penalties.
Texas Attorney General Ken Paxton announced a $63 million opioid settlement with Endo Pharmaceuticals, Inc. The agreement will largely track the terms of the Global Prescription Opioid Litigation Settlement Agreement that was announced on July 23, 2021. Pursuant to the settlement, Endo will pay $63 million into the Texas State Qualified Settlement Fund, without any requirement that the global deal first be finalized, and without any rebates or reductions to the payment amount.
Other Items of Interest
Attorneys general across the country advised consumers wanting to make charitable donations on how to avoid charity scams and provided tips on wise giving during the holiday season, including by researching specific charities and fundraisers on websites maintained by the attorneys general. Among those issuing consumer guidance were California Attorney General Rob Bonta, New Hampshire Attorney General John M. Formella, and West Virginia Attorney General Patrick Morrisey. NAAG partnered with the National Association of State Charity Officials and National Association of Secretaries of State to create guidance for online donors.
Illinois Attorney General Kwame Raoul filed suit against the Wheaton Historical Preservation Council (WHPC) and some of its board members for allegedly misusing charitable funds. The lawsuit alleges that board members illegally transferred over $300,000 to the board president, raises concerns about the WHPC’s storage of historical artifacts, and alleges the WHPC is not registered with the Office of Attorney General, in violation of state law.
The IRS announced that beginning December 31, 2021, the publicly available data it provides on electronically filed Form 990s in a machine-readable format will be available solely on the Tax Exempt Organization Search webpage. The IRS will no longer update the Form 990 Series data on Amazon Web Services. The change is to provide access to public data for organizations with tax-exempt status in one location on IRS.gov on the Charities and Nonprofits webpage.
The IRS is calling attention to a special tax provision that allows more people to deduct donations to qualifying charities on their 2021 federal income tax return. The pandemic-related provision allows married couples filing jointly to deduct up to $600 in cash donations and individual taxpayers to deduct up to $300 in donations. Ordinarily, people who choose to take the standard deduction cannot claim a deduction for their charitable contributions. But this special provision permits them to claim a limited deduction on their 2021 federal income tax returns for contributions made to qualifying charitable organizations by year’s end, December 31, 2021.
Veterans and Military
The CFPB and USDOJ issued two joint letters regarding important legal housing protections for military families. One letter was sent to landlords and other housing providers regarding protections for military tenants. A second letter was sent to mortgage servicers regarding military borrowers who have already exited or will be exiting COVID-19 mortgage forbearance programs in the coming weeks and months. While military families are entitled to the same legal protections and privileges afforded to all other homeowners and tenants, they also have additional housing protections under the Servicemembers Civil Relief Act, which is enforceable by the DOJ and servicemembers themselves.
Illinois Attorney General Kwame Raoul issued an updated veterans benefits guide. The revised 2022 Benefits for Veterans publication has updated information on veterans benefits including health care for female veterans, veterans experiencing homelessness, Vietnam War-related exposures, Camp Lejeune contaminated water exposure, and Iraq and Afghanistan service-linked illnesses.
Other articles in this edition include:
- Consumer Chief of the Month
- Center for Consumer Protection Year in Review 2021
- Federal Consumer Protection News: December 2021