Led by Arkansas Attorney General Leslie Rutledge, Connecticut Attorney General William Tong, and North Carolina Attorney General Josh Stein, 51 attorneys general called on the Federal Communication Commission (FCC) to require telephone providers that route calls across the U.S. telephone network to implement more rigorous measures to prevent illegal and fraudulent robocalls from bombarding Americans. The attorney general comments support the FCC’s proposal to extend the implementation of STIR/SHAKEN, a caller ID authentication technology that helps prevent spoofed calls, to all “intermediate” phone providers in the United States.
Led by Arizona Attorney General Mark Brnovich and Colorado Attorney General Phil Weiser, a bipartisan coalition of 38 attorneys general sent a letter urging Congress to pass legislation that would authorize state attorneys general to enforce both state and federal consumer protection laws governing the airline industry. The letter also encourages Congress to consider shifting the authority for federal investigations of airline patron complaints from the United States Department of Transportation to an agency more primarily focused on consumer protection, such as the U.S. Department of Justice or the Federal Trade Commission.
Led by Massachusetts Attorney General Maura Healey and Minnesota Attorney General Keith Ellison, a bipartisan group of 20 attorneys general provided comments to the U.S. Department of Education commending the Department’s proposed improvements to the 90/10 Rule, which prohibits for-profit schools from receiving more than 90 percent of their revenue from federal student aid. The comments also call on the Department to adopt stronger regulations to protect borrowers from harms associated with improper conversions by for-profit schools to nonprofit status.
Eighteen attorneys general expressed support for an FTC proposal to establish nationwide protections for car buyers. The attorneys general support the FTC’s proposed updates to the Motor Vehicle Dealers Trade Regulation Rule related to the sale, financing, and leasing of motor vehicles by dealerships. The proposed rule would prohibit certain misrepresentations and sales of add-on products or services that have no benefit to the consumer, require accurate pricing and disclosures, and add recordkeeping requirements regarding the transaction and advertisements. Consumer complaints regarding automobile transactions are historically among the most numerous complaints received by attorney general offices.
Led by Missouri Attorney General Eric Schmitt and Nebraska Attorney General Doug Peterson, a coalition of six states filed a lawsuit challenging the federal student loan debt cancellation program announced by the Department of Education in August. The suit alleges the program violated federal law, the separation of powers, and the Administrative Procedure Act.
Individual Attorney General Actions
Arkansas Attorney General Leslie Rutledge announced a lawsuit against an Arkansas pool construction company and its owner for failing to complete multiple projects. David Tyler, d/b/a Pools & Construction, of Fayetteville, allegedly received more than $148,000 for pool construction projects that were not completed and misrepresented that he was a licensed contractor. Tyler’s license had actually been revoked in 2021 for misconduct.
California Attorney General Rob Bonta filed an antitrust lawsuit against Amazon alleging that the company stifled competition and caused increased prices across California through anticompetitive contracting practices. The complaint alleged that in order to avoid competing on prices with other online e-commerce sites, Amazon requires merchants to enter into agreements that severely penalize them if their products are offered for a lower price not on Amazon. The suit alleges that the agreements have expanded and entrenched Amazon’s market power, impeded rivals, and resulted in pricing above competitive levels in California in violation of California’s Unfair Competition Law and the Cartwright Act.
Connecticut Attorney General William Tong announced a settlement with Frontier Communications worth over $60 million, resolving an investigation into whether Frontier deceived or misled consumers in the marketing and sales of internet services. Under the settlement, Frontier is required to expand access to high-speed internet for its customers in economically distressed communities, end a hidden monthly $6.99 internet surcharge, and make significant improvements in marketing and customer service.
District of Columbia Attorney General Karl Racine took action against Liberty Tax, the third largest tax preparation service in the U.S., for allegedly misleading and secretly increasing the cost of tax preparation for thousands of DC taxpayers. The complaint alleges that Liberty Tax aggressively markets its services to low-income residents by offering them $50 in cash “just for filing,” but then secretly increases the cost of tax preparation for individuals who accept the cash payment.
Georgia Attorney General Chris Carr entered into a $25,000 settlement with a company that allegedly targeted small businesses with deceptive solicitations that appeared to be from a government agency. According to the settlement, CA Certificate Service, LLC, sent deceptive direct mail solicitations to Georgia small business owners offering to assist in obtaining a Certificate of Existence. The company would then charge $72.50, which it allegedly represented to be a “government fee” for completing the paperwork to obtain the certificate, even though it had no government affiliation and businesses can acquire a certificate directly from the Georgia Secretary of State’s Office for only $10.
Indiana Attorney General Todd Rokita announced a federal court has denied a Voice-Over-Internet Protocol carrier’s motion to dismiss, clearing the way for the state’s suit. The court rejected the argument of Startel Communication LLC, d/b/a VoIP Essential Inc. that its actions facilitating communications entitled it to “common carrier” status which would exempt it from liability under the federal Telemarketing Sales Rule and Indiana law.
Maryland Attorney General Brian E. Frosh announced a $3.25 million civil penalty obtained in a settlement with Westminster Management, LLC, and 25 property owners resolving allegations of unlawful rental practices. The settlement also requires a claims process for consumers who faced serious maintenance issues such as leaks, pest infestations, or lack of utilities to obtain restitution. The properties in question contained more than 9,000 rental units and the settlement will potentially pay restitution to thousands of current and former residents.
Massachusetts Attorney General Maura Healey announced a $12 million settlement with a national debt collection company and its subsidiaries that will provide restitution and debt relief for Massachusetts consumers. The settlement resolves allegations that Encore Capital Group, Inc., and its subsidiaries, Atlantic Credit and Finance, Inc., Midland Funding, LLC., and Midland Credit Management, Inc. were collecting on debts without sufficient proof that the debts were valid and accurate, using misleading and harassing collection tactics, and attempting to collect debts that were beyond the statute of limitations or “time-barred.”
New Hampshire Attorney General John M. Formella announced a settlement with Janssen Pharmaceuticals/Johnson & Johnson to settle the state’s opioids-related claims against the company. The company has agreed to pay $40.5 million, of which $31.5 million will be used for opioid abatement purposes. The state’s trial against Johnson & Johnson had been scheduled to begin on September 7, 2022. The settlement requires releases by the 23 litigating subdivisions and 18 primary non-litigating cities and towns for the agreement to be final.
New Mexico Attorney General Hector Balderas announced an investigation of allegations that Huggies brand diapers are causing serious negative skin reactions on children wearing the diapers. Reports received by the state indicate that reactions can range from mild irritation to serious medical conditions. To assist in the investigation, the Attorney General is seeking information from New Mexicans about any reactions their children have experienced while using Huggies products.
Ohio Attorney General Dave Yost sued Thrifty Propane, Inc. for allegedly failing to deliver its products, refund consumers’ money, and for violating two previous consent judgments. The lawsuit is seeking $25,000 for each violation and reimbursement to wronged consumers. The attorney general is also asking for a receiver to be appointed to conduct Thrifty’s business during litigation, arguing that the company is incapable of both complying with Ohio law and providing products to consumers in a timely manner.
Pennsylvania Attorney General Josh Shapiro settled with online ticket seller RYADD, Inc., for alleged consumer protection violations related to its failure to provide refunds for shows cancelled due to the pandemic. The settlement alleges that early in the pandemic RYADD changed their refund policy to a mandatory store credit and refused to provide refunds for canceled shows without notice and against Pennsylvania law. RYADD has agreed to fully refund any Pennsylvania consumer who purchased a ticket before September 8, 2022, to a show that was canceled and who hasn’t yet received a refund.
West Virginia Attorney General Patrick Morrisey announced two settlements with Walmart and CVS valued at more than $147 million. The settlements resolve lawsuits that alleged the pharmacies failed to maintain effective controls as a distributor and dispenser against diversion that contributed to oversupply of opioids in the state. Walmart agreed to a settlement of $65,070,000. CVS agreed to pay $82.5 million.
Other articles in this edition include:
- Consumer Chief of the Month
- An Internet Privacy Win for Maine Consumers
- Federal Consumer Protection News: September 2022