A bipartisan group of 40 attorneys general entered into a $19.2 million multistate settlement with Ford Motor Company resolving deceptive advertising allegations related to fuel efficiency and payload capacity claims regarding certain vehicles. According to the settlement, Ford allegedly misrepresented both the fuel efficiency of its 2013-2014 C-Max hybrids and the payload capacity of its 2011-2014 Super Duty pickup trucks. The multistate was led by the attorneys general of Arizona, Illinois, Maryland, Oregon, Texas, and Vermont.
Led by Delaware Attorney General Kathleen Jennings and Mississippi Attorney General Lynn Fitch, a bipartisan coalition of 41 attorneys general wrote the Consumer Financial Protection Bureau in support of regulations implementing the Debt Bondage Repair Act, which prohibits consumer credit reporting agencies from reporting adverse information resulting from human trafficking. The letter notes the importance of victims recovering financial independence from traffickers which can be difficult if credit harm is not repaired.
Led by Illinois Attorney General Kwame Raoul, a bipartisan coalition of 25 attorneys general urged the Federal Trade Commission (FTC) to consider the action states have taken to address misrepresentations made by for-profit colleges and universities during its rulemaking related to schools’ deceptive earnings claims. The coalition’s letter was filed in response to a March request by the FTC for comments regarding deceptive or unfair earnings claims made by a broad range of businesses, including for-profit schools.
A bipartisan group of 16 attorneys general announced the release of more than 1 million Malinkrodt documents by the repository established through multistate opioid settlements. The repository is operated by the University of California at San Francisco in collaboration with Johns Hopkins University and was established to provide public access to documents associated with the opioid crisis to “advance understanding of the root causes of the opioid epidemic and help address corporate behavior that is harmful to the public.”
Led by Arizona Attorney General Mark Brnovich and Mississippi Attorney General Lynn Fitch, 14 attorneys general wrote congressional leaders opposing the Accelerating Charitable Efforts (ACE) Act. The letter expresses opposition to provisions in the act that would prohibit public charities from using anonymous donor-advised fund donations to satisfy the IRS’s public-support test, which could cause donors who would otherwise contribute anonymously not to donate at all.
The attorneys general of Arizona, Colorado, Kansas, and Vermont collaborated on a settlement with Pfizer regarding its alleged failure to honor coupons for three medications. According to the settlement, Pfizer offered copayment coupons stating that consumers would “pay no more than” a certain amount for Estring®, which treats moderate to severe symptoms related to menopause; Quillivant, which treats attention deficit hyperactivity disorder; and Flecto0r Patch®, a prescription NSAID patch that treats acute pain due to minor strains, sprains, and bruises. Pfizer included small-print terms and conditions on the “pay no more than” claim that were allegedly not listed clearly and conspicuously.
Individual Attorney General Actions
Arizona Attorney General Mark Brnovich obtained an agreement permanently banning a debt collector and awarding more than $1.6 million in restitution and resolves allegations the defendants impersonated law enforcement officers, government officials, process servers, and law firm personnel in order to scare or intimidate consumers into paying alleged debts. The consent judgment against Mark Anthony Smith, the owner and manager of debt collection businesses CMS Financial Group, John Lee Group & Associates, and TD Financial Solutions Group AZ, if approved by the court, also includes up to $900,000 in civil penalties.
Arkansas Attorney General Leslie Rutledge filed suit against insulin drug manufacturers and PBMS for allegedly inflating insulin and other diabetic drug prices. The complaint alleges that Novo Nordisk, Sanofi and Eli Lilly conspired with Express Scripts, Caremark, and Optum to significantly increase their revenues by unfairly and deceptively driving up the costs of insulin, which has made insulin and other diabetic treatments unaffordable for many diabetics.
Colorado Attorney General Phil Weiser announced an agreement with Comcast to save consumers money on HD television service. Comcast currently charges some consumers a monthly $9.95 fee for HD service on older plans although HD has become standard industry-wide. Under the settlement Comcast agreed to notify 40,000 Coloradans who continue to pay a separate HD TV fee that they can switch to a new plan that does not include an additional fee for HD service, without a penalty. Weiser’s office has previously reached agreements regarding HD fees with DISH Network and DIRECTV.
District of Columbia Attorney General Karl Racine obtained nearly $2 million for victims of a rent hike scam and the District following a favorable trial judgment against Equity Residential Management, LLC which manages an apartment complex. The court held that the defendants’ methodology for rate increases was not adequately disclosed and led to unexpected and significant increases in rent payments. The court ordered defendants to pay more than $869,000 in restitution and more than $1 million to the District for its costs and attorneys’ fees.
Florida Attorney General Ashley Moody obtained a lifetime ban and a final judgment of more than $20 million against related household moving businesses and their owner. Following a week-long trial alleging a wide-ranging, deceptive moving scheme, the court entered judgment against Ohad Guzi and eight Florida moving companies that he owned, finding they misrepresented prices, delivery dates, insurance coverage, and used unskilled labor and third-party contractors rather than the company’s own employees. The judgment awards more than $5 million in consumer restitution and $16.5 million in civil penalties.
Illinois Attorney General Kwame Raoul announced $43 million will be distributed to Illinois consumers in settlement of price fixing claims against cathode ray tube (CRT) television and monitor manufacturers Hitachi, LG, Philips, Samsung, Toshiba, and Panasonic. The case was filed in 2012 and alleged collusion among the companies between 1997 and 2007. Payments will be made to CRT purchasers whose claims were approved by a claims administrator. The distribution was delayed by an appeal by consumers whose claims were denied.
Acting New Jersey Attorney General Matthew J. Platkin obtained a $10 million judgment against a telemarketing company that allegedly defrauded timeshare owners. The order was entered against Andrew Burns LLC and its owner William O’Hanlon for allegedly calling timeshare owners, many of the elderly, and using high-pressure tactics and misrepresentations to obtain up-front fees of $594-$2,899 to rent or resell their timeshares. Acting Attorney General Platkin also announced action to stop alleged Russian scammers operating a NFT fraud. A summary cease and desist order issued by the New Jersey Bureau of Securities requires a Russian website operator to stop offering securitized non-fungible tokens (NFTs) on its Flamingo Casino Club site. The action, taken in coordination with four other state security regulators, alleges the operators of the site misrepresented its location as being in New York in order to procure web hosting services and that it was associated with the Flamingo Las Vegas Hotel.
New York Attorney General Letitia James announced investigations into social media companies in connection with the terror attack in Buffalo. The investigations will examine the social media companies including but not limited to Twitch, 4chan, 8chan, and Discord that the shooter allegedly used to discuss and amplify his intentions and acts to carry out the attack.
North Carolina Attorney General Josh Stein won a permanent ban prohibiting a debt adjuster from operating in North Carolina. Michael Grinnell and his businesses, Amstar Services and Home Relief Services, allegedly told consumers he would reduce mortgage loan payments, get loan forbearances, and prevent lenders or mortgage services from foreclosing on them, but failed to do so despite receiving up-front fees of as much as $2,400. Under the judgment, the defendants are barred from offering such services to North Carolinians in the future. The court also ordered payment of more than $5 million in restitution to consumers who filed affidavits in support of the state’s complaint.
Washington Attorney General Bob Ferguson announced a settlement with a robocaller who marketed a call blocking product. Oregon-based based Global Grid and its owner must shut down its allegedly illegal robocalling operation and stop all deceptive marketing practices, including misrepresentations about a product it falsely promised could block robocalls. Global Grid must pay restitution of $8,000; civil penalties of more than $600,000 are suspended.
West Virginia Attorney General Patrick Morrisey announced a $161.5 million settlement with Teva and Allergan regarding actions that allegedly contributed to the opioid crises. The settlement was concluded mid-trial after the state had presented 54 witnesses and introduced approximately 630 documents into evidence in a span of six weeks. According to the settlement, West Virginia will receive payments totaling more than $134,531,000 in cash over 15 years provided that the state has received sign-ons from its political subdivisions. In addition, Teva will also provide $27 million worth of Narcan over 10 years.
Minnesota Attorney General Keith Ellison reached an agreement to strengthen the governance of a charity serving the Cameroonian community in Minnesota. The Assurance of Discontinuance with Minnesota Cameroon Community (MCC) requires a restructuring of leadership and imposes other business protocols to resolve issues that allegedly led to neglect of the organization’s primary asset, the Cameroon Community Center which was allowed to fall into disrepair. MCC’s board and directors also allegedly failed to pay outstanding tax liabilities.
New Hampshire Attorney General John M. Formella announced a report of his Charitable Trusts Unit objecting to a proposed merger involving GraniteOne Health and Dartmouth Health. According to the report, the transaction, as proposed, would end existing competition between the two systems and violate state and federal law without sufficient remedies to address the anticompetitive harm.
Other articles in this edition include:
- Consumer Chief of the Month
- New Jersey Issues Guidelines for Retailers on Gift Card Fraud
- Federal Consumer Protection News: May 2022