Multistate Actions
This month was kicked off by National Consumer Protection Week (NCPW), which occurred March 5-11, 2023. NCPW is a week when government agencies, consumer protection groups, and other organizations work together to share information about consumer rights and help people learn to spot, report, and avoid scams. For more information regarding this year’s NCPW, please click here. For more information regarding next year’s NCPW, please visit this link.
Led by Colorado Attorney General Phil Weiser and Tennessee Attorney General Jonathan Skrmetti, a bipartisan coalition of forty-seven attorneys general filed an amicus brief asking the court to order social media company TikTok to produce communications critical to their multistate investigation of TikTok’s potential unlawful activities. The attorneys general are seeking to determine whether TikTok engages in deceptive and unfair conduct that harms the mental health of TikTok users, including children. The amicus brief alleges that TikTok repeatedly failed to preserve relevant information and refused to provide it in a useful format.
A bipartisan coalition of eight attorneys general obtained injunctions against robocall operations that made millions of illegal robocalls, Rising Eagle Capital Group and JSquared Telecom. The coalition originally filed their lawsuit in 2020 alleging violations of the Telephone Consumer Protection Act, the Telemarketing Sales Rule, as well as state consumer protection laws. The complaint alleged that the defendants called consumers regarding a variety of scams, including both car warranties and health care services.
District of Columbia Attorney General Brian Schwalb, Massachusetts Attorney General Andrea Joy Campbell, and New York Attorney General Letitia James joined the U.S. Department of Justice to challenge the proposed acquisition by JetBlue of Spirit Airlines. The attorneys general cited the need to prevent an anticompetitive acquisition that would cost consumers money and limit their options when making travel plans.
Individual Attorney General Actions
Alaska Attorney General Treg Taylor announced a settlement with Belissima Cosmetics this month. Salespeople for Belissima allegedly personally solicited consumers to purchase expensive cosmetic products at the 2022 Alaska State Fair, but did not honor the right to return these purchases within five days.
Arizona Attorney General Kris Mayes announced the results of Arizona’s organized retail theft task force investigation. Investigators were able to seize more than 3,200 cans of baby formula, more than 1,200 cloned Supplemental Nutrition Assistance (SNAP) Electronic Benefit Transfer (EBT) cards, skimming devices, and equipment used to manufacture fraudulent EBT cards. More than 2,700 victims lost over $1.2 million in stolen SNAP benefits.
Arkansas Attorney General Tim Griffin filed two lawsuits against two solar companies, Sun Valley Renewables, LLC, and Cavalry Solar Solutions, doing business as Apollo Energy, and their owners. The complaints allege that after accepting consumers’ money for the construction of solar panel systems, the defendants failed to perform the contracted services or provide the purchased goods. Attorney General Griffin also sued a health spa that was offering various medical services without a license. According to the complaint, Hourglass Vixens, LLC, offered massage, medical, cosmetology and dentistry services without a license and without the required personnel recommended for those establishments.
California Attorney General Rob Bonta announced $2.1 million settlement against Shared Health Alliance, Inc. (SHA) and Alliance for Shared Health (ASH) over allegedly sham health insurance plans. ASH and SHA advertised their plans as the equivalent of standard health insurance, but the plans were allegedly unreliable and did not provide mandated coverage.
Connecticut Attorney General William Tong filed a lawsuit against Vision Solar, LLC regarding their predatory high-pressure sales tactics, misrepresentations about financing and tax credits, and unpermitted work that left homeowners saddled with nonfunctioning systems and unaffordable loans. Vision Solar began installing residential solar energy systems in December 2020. Since August 2021, the AGO has received fourteen complaints, among them, reports that Vision took advantage of elderly and disabled consumers, including pressuring them into signing contracts they were not fully able to read or understand.
Hawaii Attorney General Anne Lopez warned of a fake FBI bitcoin phone scam involving “spoofed” Department of the Attorney General phone number. The scammers allegedly used “scam scripts” to try to steal money or valuable personal information.
Indiana Attorney General Todd Rokita announced that his office has filed two separate Assurances of Voluntary Compliance with a number of respondents related to an ongoing real estate fraud operation. The fraud alleged by the attorney general included creating falsified heirs and heirship affidavits to obtain title and filing of a quiet title action to “wash” the title so that it could be sold free and clear of any liens or other claims to title. The respondents also allegedly sought to defraud elderly homeowners through the use of forged documents. Attorney General Rokita also obtained a settlement of more than $250,000 from Integrity Acceptance Corp., a group of Indiana companies that originated allegedly deceptive and unlicensed personal loans to people purchasing vehicles. The defendants allegedly extended loans to consumers who bought vehicles from Empire Auto Group.
Louisiana Attorney General Jeff Landry has filed a lawsuit against drug manufacturers and the pharmacy benefit managers (PBMs) who have allegedly raised the prescription costs of insulin. The complaint alleged that insulin manufacturers are plotting with PBMs to achieve the extremely high prices that PBMs have imposed on patients. According to the complaint, these PBM schemes have allowed the price to increase more than 1,000%.
Massachusetts Attorney General Joy Campbell received a favorable decision from Massachusetts Superior Court, which ruled that online food delivery service platform Grubhub Holdings Inc. illegally overcharged Massachusetts restaurants in violation of the statutory fee cap in place during the COVID-19 public health emergency.
Minnesota Attorney General Keith Ellison, along with Minneapolis Mayor Jacob Frey and St. Paul Mayor Melvin Carter pressed Kia and Hyundai for a safety recall. There has been an increase in Kia and Hyundai auto thefts across the U.S., including an 836% increase in Minneapolis and a 611% increase in Saint Paul. The investigation concerns whether Kia and Hyundai vehicles are missing industry-standard anti-theft technology and have violated Minnesota’s consumer protection and public nuisance laws. Attorney General Ellison also announced that his office settled with Housing Hub, LLC, a St. Paul-based property management company that allegedly illegally withheld amounts from tenants’ security deposits. The settlement requires the company to provide refunds to its tenants and change its security deposit retention practices to comply with state law.
New York Attorney General Letitia James recovered $350,000 for hundreds of homeowners from the mortgage servicer, Servis One, Inc. for allegedly failing to offer required mortgage relief to homeowners who could not make payments at the height of the COVID-19 pandemic. State and federal law required that homeowners facing financial hardship be allowed to defer their mortgage payments for up to 12 months in 2020 and 2021. An investigation found that Servis encouraged homeowners who faced financial hardships to continue making partial payments on their loans and did not offer the legally required relief. Servis will pay $350,000 in penalties and restitution to as many as 160 homeowners who were not offered the relief to which they were entitled.
North Carolina Attorney General Josh Stein filed a lawsuit against real estate brokerage firm MV Realty alleging that they violated North Carolina’s laws prohibiting unfair and deceptive practices, usurious lending, abusive telephone solicitation practices, and unfair debt collection practices by tricking homeowners into signing oppressive 40-year real estate agreements. North Carolina received more than twenty complaints from consumers about MV Realty’s allegedly unfair and unlawful practices.
North Dakota Attorney General Drew Wrigley announced a settlement with House of Prayer and Life, Inc., Jericho Share, Jericho Health Share, and JHS Community, a Healthcare Sharing Ministry (HSM) based in Houston, Texas. HSMs are not health insurance, and their plans do not come with the same guarantees, mandates, and protections as traditional health insurance plans. The settlement resolved concerns that Jericho made misrepresentations and violated North Dakota law while advertising and offering its memberships. The settlement requires Jericho Share to provide a verbal and written disclosure to consumers and establish corrective internal procedures. The settlement also requires payment of restitution to seventy-five impacted consumers, and $15,000 in lieu of civil penalties as well as investigation costs and attorney fees.
Ohio Attorney General Dave Yost filed a lawsuit accusing pharmacy benefit managers Express Scripts and Prime Therapeutics, as well as Ascent, Humana Pharmacy Solutions, Cigna Group, parent company of Express Scripts, Evernorth Health, another subsidiary of Cigna, and Humana, parent company of Humana Pharmacy Solutions, of using a Switzerland-based company to illegally drive up drug prices and ultimately push those higher costs onto patients who rely on lifesaving drugs such as insulin. The attorney general alleged that the collusion has been made possible by PBM market consolidation, which has left the three largest PBMs in control of more than 75% of the drug market and the three next largest PBMs in control of much of the rest. This lawsuit targets PBMs only, not pharmacies or manufacturers. The lawsuit alleges multiple violations of the Valentine Act, Ohio’s antitrust law, which prohibits price fixing, controlled sales and other agreements that restrain trade and hurt competition.
Other articles in this edition include:
- Federal Consumer Protection News: March 2023
