Led by Maryland Attorney General Brian Frosh, a bipartisan coalition of 11 attorneys general announced settlements with StubHub for refusing to refund ticketholders for COVID-19-related cancellations. StubHub had refused to provide refunds, instead providing customers a 120% credit for future events. Under the settlements, StubHub agreed to provide refunds unless customers elected to retain their account credits. Also participating were the attorneys general of Arizona, Arkansas, Colorado, the District of Columbia, Indiana, Minnesota, New Hampshire, Ohio, Virginia, and Wisconsin.
Led by Indiana Attorney General Todd Rokita and North Carolina Attorney General Josh Stein, a bipartisan group of 35 attorneys general successfully defended a challenge to the Telephone Consumer Protection Act’s (TCPA) robocall ban in the U.S. Court of Appeals for the Sixth Circuit. In Lindenbaum v. Realgy, robocallers argued that a U.S. Supreme Court decision that a government debt exemption enacted in 2015 was unconstitutional, invalidated the TCPA ban for calls made between 2015 and 2020. At the urging of the attorneys general, who filed an amicus brief in the case, that argument was rejected and the court held that the TCPA ban was lawful and enforceable for the entire time period.
Led by New York Attorney General Letitia James, a coalition of 14 attorneys general commended the U.S. Department of Education for recognizing the states’ vital role in investigating student loan servicers. The states’ comments were filed in response to action by the Department reversing a 2018 notice of interpretation of the federal Higher Education Act that purported to preempt state laws that target abuses by student loan servicers.
A bipartisan coalition of 6 attorneys general from Arizona, Florida, Massachusetts, Pennsylvania, Virginia, and the District of Columbia along with the U.S. Department of Justice sued American Airlines and JetBlue over the launch of an allegedly anticompetitive alliance which would consolidate their operations in Boston and New York City. According to the complaint, the alliance will cause hundreds of millions of dollars in harm to air passengers across the country through higher fares and reduced choice.
Led by Colorado Attorney General Phil Weiser and Nebraska Attorney General Doug Peterson, a bipartisan coalition of 32 attorneys general applauded federal legislation to modernize antitrust enforcement. In a letter sent to House and Senate leaders, the attorneys general urged them to continue making improvements to the antitrust laws via a range of bills moving through Congress.
Led by California Attorney General Rob Bonta, a coalition of 21 attorneys general urged the U.S. Department of Education to take robust action to correct problems with the Public Service Loan Forgiveness (PSLF) program. The attorneys general, responding to the Department’s request for information on how to improve access to the PSLF program, noted that since borrowers first became eligible for relief in 2017, almost all PSLF applications have been rejected, leaving millions of public servants in the lurch.
Led by District of Columbia Attorney General Karl Racine, a coalition of 11 attorneys general filed an amicus brief, urging the Supreme Court to hear a case supporting states’ rights to enact public health policies that can prevent opioid overdose deaths and treat those suffering from opioid use disorder. In the brief, the attorneys general ask the Supreme Court to review a ruling by the U.S Court of Appeals for the Third Circuit that prevents Safehouse, a Pennsylvania nonprofit, from operating a “safe injection site” that can prevent opioid overdose deaths.
Individual Attorney General Actions
Colorado Attorney General Phil Weiser obtained more than $3 million in debt relief from subprime auto lender Santander Consumer USA. The settlement resolves allegations that Santander’s subprime lending practices exposed consumers to unnecessarily high levels of risk and knowingly placed consumers into auto loans with a high probability of default. Attorney General Weiser also announced that Compass Bank, now called BBVA USA, and Air Academy Federal Credit Union will refund Colorado borrowers after failing to return guaranteed automobile protection (GAP) fees that were improperly retained by those institutions. Compass Bank will refund borrowers approximately $1.68 million, and Air Academy Federal Credit Union is currently working to determine what it owes to customers, undertaking a manual review of lending files that could take several months.
Florida Attorney General Ashley Moody obtained nearly $500,000 from ten heating, ventilation, air conditioning (HVAC) companies engaged in a variety of deceptive trade practices. According to the final judgment, $490,000 must be paid by the defendants within 90 days. Of that total, $340,000 will be available for victims of the scheme and $150,000 must be paid in civil penalties.
Idaho Attorney General Lawrence Wasden settled with a Boise direct mail company, Senior Supplemental Referral Service, LLC. The company allegedly mailed solicitations nationwide that appeared to be from a government office, failed to disclose that they were ads for insurance, omitted material terms and conditions, and created a false sense of urgency. In addition to injunctive relief imposing terms regarding future solicitations, the defendant agreed to pay $3,000 for fees and costs.
Massachusetts Attorney General Maura Healey obtained $27 million for over 3,000 Massachusetts consumers from subprime auto lender Credit Acceptance Corporation (CAC). The settlement resolves alleged violations relating to CAC’s origination, collection, and securitization of subprime loans, specifically, that CAC made high-interest loans that it knew or should have known borrowers would be unable to repay. Attorney General Healey also obtained $2.25 million from debt collector Transworld Systems, Inc. (Transworld), resolving allegations that it harassed consumers with a high volume of calls and attempted to collect on time-barred debt. The attorney general also alleged that Transworld used false and misleading affidavits to attempt to collect from student borrowers.
New Hampshire Attorney General John Formella filed a complaint against A&M Roofing and Sons alleging the defendant accepted deposits from consumers but failed to perform agreed upon services. Defendants are also alleged to have failed to make restitution as required by an Assurance of Discontinuance.
New York Attorney General Letitia James announced a $50 million settlement with opioid manufacturer Endo Health Solutions Inc., resolving allegations that the company falsely marketed prescription opioids, failed to effectively monitor and report suspicious orders, and failed to prevent drug diversion, all of which contributed to overdoses and addiction.
North Carolina Attorney General Josh Stein obtained a settlement with for-profit medical technical school, Stepping Stone Phlebotomy LLC. which Stein sued in 2020 for operating without a license. The school subsequently obtained a license. In addition to injunctive terms related to licensure, the settlement requires the school to provide a full refund upon request to more than 300 students if they did not pass a national certification exam.
Ohio Attorney General Dave Yost sued a florist who accepted money for weddings and other important events but failed to deliver services. An investigation of Desiree Gilliam Pace, doing business as Flowers by Des, found consumers either paid in full for services or put down a 50% deposit for Pace to provide flowers for their events. Pace allegedly either canceled the contracts within days of the events or, without notice, failed to appear at the events when she was contractually required to do so.
Tennessee Attorney General Herbert Slatery III warned consumers about flooded vehicles that may appear in used car markets following Hurricane Ida. In the past, vehicles from hurricane-impacted areas have been sold to unsuspecting consumers without proper disclosure. By law, these vehicles’ titles should indicate that they were “flooded,” “salvaged,” or “totaled.”
Vermont Attorney T.J. General Donovan filed a consumer protection suit against four major oil companies and affiliates, alleging they concealed crucial information and disseminated misleading information about fossil fuels and climate change. Named as defendants in the suit were Exxon Mobil Corporation, Shell Oil Company, Sunoco LP, CITGO Petroleum Corporation, and related companies.
Virginia Attorney General Mark Herring took action against Henrico-based Saly Inc. d/b/a RIR Mart Exxon for violating Virginia’s price gouging law following the Colonial Pipeline shutdown. According to the complaint, immediately after a state of emergency was declared, triggering the price gouging law, the business elevated its prices from $3.49 to $4.499 per gallon, an increase of nearly 29%. Under the terms of a settlement, the company agreed to pay $2,500 in civil penalties and attorneys’ fees, and also has disgorged more than $300 in excess profits made from the offending sales.
Washington Attorney General Bob Ferguson obtained a $1.675 million settlement with Washington-based debt collector Convergent Outsourcing, Inc., resolving allegations that it engaged in unlawful collection practices related to time-barred debt, including deceptively suggesting the possibility of litigation to collect the debt. 1,405 Washingtonians will recover 100% of the payments they made plus interest, totaling almost $710,000. The balance of the settlement funds will be used to cover the costs of the case and fund future investigations and enforcement. Attorney General Ferguson also announced a consent decree with timeshare exit company, Reed Hein & Associates LLC. The decree requires the company to stop its allegedly deceptive timeshare exit practices and pay $2.61 million to Washington. If the company violates the terms of the consent decree, it will be required to pay an additional $19 million — a total judgment of $22 million. A claims process will provide restitution to harmed consumers.
West Virginia Attorney General Patrick Morrisey sued to block a New York-based collection agency from doing business in the Mountain State. The Attorney General’s complaint, filed Thursday in Mingo County Circuit Court, alleges Bayside Capital Services, LLC, and its owner, John Max Werth, engaged in the business of debt collection without proper licensing and used unlawful, high-pressure tactics including calling consumers at their place of work and threatening them with criminal prosecution.
Other articles in this edition include:
- Consumer Chief of the Month: Steve Kaufmann, Colorado Attorney General’s Office
- The Relentless Battle to Eliminate Robocalls
- Federal Consumer Protection News: September 2021