As 2022 begins, we look back upon the consumer protection work the nation’s attorneys general undertook in 2021 with this Year in Review. In 2021, the COVID-19 pandemic continued to grip the world and attorneys general took action on a number of fronts to protect consumers from COVID-related harms. But consumer protection efforts were certainly not limited to matters connected to the pandemic. A $26 billion national opioid settlement with manufacturers and distributors was announced. Attorneys general worked together in bipartisan fashion on many matters, taking policy positions supporting a broad array of federal consumer-related issues and pressing certain industries to reform harmful practices. They announced wide ranging investigative efforts involving the technology sector and halted unlawful behavior while obtaining consumer relief through a variety of multistate actions. Attorneys general also filed and successfully concluded numerous single-state enforcement actions involving businesses operating across the commercial landscape. This important work by the attorneys general and their dedicated and talented staffs continues to serve as a welcome reminder of the immense good that public servants can accomplish through coordinated efforts focused on serving the public interest. The Supreme Court’s ruling in AMG Management Capital v. FTC, limiting the FTC’s authority to recover restitution for consumers, at least until Congress restores it, further reinforce the need for attorneys general to work together to protect consumers from deceptive and unfair business practices. In 2021, attorneys general did just that. In addition to the $26 billion opioids settlement, bipartisan coalitions of attorneys general obtained multistate settlements valued at another $763 million.
As the pandemic continued, attorneys general remained committed to protecting consumers from those seeking to take advantage of opportunities to price gouge on high-demand necessities, deceive and mislead regarding COVID-19-related products and services, or disregard measures imposed by federal and state authorities to minimize the financial impacts of the continuing economic disruption. Below are summaries of some of the more noteworthy COVID-related actions.
Enforcing price gouging laws
- Attorneys general enforcing price gouging laws scored an important victory when the U.S. Sixth Circuit Court of Appeals upheld the constitutionality of Kentucky’s price gouging law, a ruling with national importance. Kentucky Attorney General Danial Cameron successfully appealed a lower court’s preliminary injunction halting a price gouging investigation of third-party sellers on Amazon.com. The district court held that Kentucky’s price gouging law, which is similar to laws in other states, likely violated the extraterritoriality doctrine of the dormant commerce clause of the U.S. Constitution, however the Sixth Circuit reversed and held that the investigation was lawful. Cameron’s office was supported by a bipartisan coalition of 31 attorneys general led by Illinois Attorney General Kwame Raoul, who filed an amicus brief in the matter.
- Minnesota Attorney General Keith Ellison and New York Attorney General Letitia James each resolved price gouging suits against egg producers, both obtaining more than 1 million eggs for nonprofit organizations fighting hunger and food insecurity in their states.
Obtaining refunds for cancelled or delayed travel or ticketed events
- Maryland Attorney General Brian Frosh led a bipartisan group of 11 attorneys general in a settlement with StubHub through which they obtained refunds for tickets to events that were cancelled due to the pandemic.
- Florida Attorney General Ashley Moody helped recover more than $7 million from online travel company BookIt Operating, LLC, for failing to secure bookings paid for by consumers.
- The attorneys general of California, Colorado, Georgia, Indiana, Iowa, Kentucky, Minnesota, Missouri, and Virginia collectively obtained refunds of more than $5 million from Voyageurs International, Ltd. which allegedly illegally retained cancellation fees after its student trips to Europe were cancelled due to the pandemic.
- New York Attorney General Letitia James obtained $4.4 million in refunds for consumers from Ticket Fulfillment Services, L.P., subsidiary of ticket reseller Vivid Seats, LLC.
- Virginia Attorney General Mark Herring obtained more than $200,000 in refunds from online ticket reseller Ryadd, Inc. which operates TicketsOnSale.com.
Taking action against purveyors of ineffective COVID tests, treatments, and protective equipment
- Colorado Attorney General Phil Weiser brought suit against Denver-based Nationwide Medical Supply Inc. for making misleading claims about masks and respirators it sold and for charging unreasonably excessive prices for those products.
- Michigan Attorney General Dana Nessel settled health fraud claims against Skin Envy, LLC after the owner allegedly made misleading claims about a product’s ability to prevent COVID-19.
- Missouri Attorney General Eric Schmitt recovered $156,000 and obtained a consent judgment against Jim Bakker and Morningside Church Productions for marketing “silver solution” as a potential cure for the coronavirus.
- Nebraska Attorney General Doug Peterson settled with two Omaha companies, Pivot Concierge Health, LLC and Banyan Medical Systems, LLC for making deceptive and misleading statements regarding COVID-19 antibody tests.
Protecting tenants from wrongful eviction
- Washington Attorney General Bob Ferguson took action against a low-income housing provider who threatened to evict tenants in violation of state emergency orders.
- Minnesota Attorney General Keith Ellison won relief for tenants who were wrongfully required to move from their premises in violation of COVID-related restrictions.
Recovering state funds paid for undelivered PPE or ineffective treatments
- Arkansas Attorney General Leslie Rutledge sued Med-Care Health Link, LLC of Virginia and others for failing to provide more than $10 million worth of personal protective equipment and 560 ventilators to University of Arkansas for Medical Sciences.
- Massachusetts Attorney General Maura Healey obtained $3.5 million in settlement of claims against Bedrock Group LLC related to its failure to deliver more than 900,000 N95 masks to the Commonwealth.
- Oklahoma Attorney General Mike Hunter reached an agreement with FFF Enterprises to return the state’s stockpile of hydroxychloroquine, purchased by the Oklahoma State Health Department, and receive a full refund.
Helping obtain resources to provide internet access needed by K-12 students for remote learning due to closed schools
- Colorado Attorney General Phil Weiser and Nebraska Attorney General Doug Peterson, in February 2021, led a bipartisan coalition of 31 attorneys general in urging the Federal Communications Commission (FCC) to provide E-Rate funds to support Wi-Fi hotspots or extend broadband connections to schools closed due to COVID. Thereafter, in May, 2021, the FCC unanimously adopted a Report and Order establishing the rules and procedures for the Emergency Connectivity Fund Program.
Warning consumers about fake vaccination cards and other COVID-related scams
- Led by Illinois Attorney General Kwame Raoul, North Carolina Attorney General Josh Stein, and Tennessee Attorney General Herbert H. Slatery III, a bipartisan coalition of 45 attorneys general called on Twitter, eBay, and Shopify and online mobile market place OfferUp to act immediately to prevent people from selling fraudulent CDC vaccination cards on their platforms.
- Among the more pervasive scams addressed by attorney general consumer alerts were: bogus vaccine priority scams (IL), fake vaccination cards (NV), phishing scams offering COVID relief funds (FL), vaccine survey scams (IN), and testing scams (GA).
One consequence of the COVID pandemic and the increased amount of time many consumers have had at home has been an increase in the demand for pets, including puppies. So, of course, fraudsters have seized the moment as an opportunity to scam caring pet owners. Attorneys general received numerous complaints from consumers reporting outright scams as well as deceptive sales practices.
- Arkansas Attorney General Leslie Rutledge sued two individuals who obtained $160,000 from consumers who believed they were paying for a dog that was never delivered.
- Massachusetts Attorney General Maura Healey took action against two finance companies for illegal dog leasing and required the defendants to cancel the leases and transfer ownership of dozens of dogs to consumers.
- Maryland Attorney General Brian Frosh enforced Maryland’s No More Puppy Mills Act, obtaining $100,000 in civil penalties from Just Puppies of Maryland, Inc. for selling sick puppies and others with undisclosed congenital disorders or hereditary conditions.
- New York Attorney General Letitia James sued Shake a Paw stores on Long Island for selling numerous sick or injured puppies.
National opioids settlement
Nationally, the $26 billion multistate opioids settlement was the highest profile consumer protection case in 2021 and one with far reaching consequences as communities across the nation deal with the continuing opioid crisis. The settlement culminated from years of work by attorneys general as well as the federal, state, and local governments who sued and fought to hold pharmaceutical manufacturers and distributors accountable for their roles in fueling the crisis. Attorneys general moved to bring the matter to a close in order to speed relief to struggling local jurisdictions and provide treatment to addicts. The number of U.S. overdose deaths continued to increase, with more than 75,000 opioid-related deaths, a 25% increase over the prior annual reporting period.1 The billions of dollars the states have negotiated for desperately needed treatment and abatement programs is contingent upon there being enough local government participation nationally. An announcement on whether those thresholds have been met is expected in late February 2022. Once the settlements are finalized, participating entities could see their first payments as early as April 2022. Attorneys general from a number of states have objected to the settlement and successfully appealed the bankruptcy court’s approval of the settlement. Those attorneys general seek to obtain more monetary relief and also to hold the former owners of Purdue Pharma personally responsible. The U.S. District Court’s decision rejecting the settlement’s treatment of the Sackler family, is almost certain to be appealed. These proceedings, and the uncertain future of the entire settlement will be one of the leading stories of 2022.
Other opioids-related actions
- A bipartisan coalition of 48 attorneys general announced a $573 million settlement with consulting company McKinsey & Company for its role advising Purdue Pharma on how to maximize profits, fueling the opioid epidemic.
- New York Attorney General Letitia James announced a $50 million agreement from opioid manufacturer Endo Health Solutions for its role in the opioid crisis.
- Texas Attorney General Ken Paxton announced a $63 million opioid settlement with Endo Pharmaceuticals, Inc.
Other health care-related matters
Attorneys general have been leaders in the fight against health fraud involving pharmaceutical and other products in addition to opioids for decades. They obtained important results and filed enforcement actions involving multiple health care-related matters in 2021, including the following:
- Surgical Mesh
- Led by Washington Attorney General Bob Ferguson and the California Department of Justice, 48 attorneys general announced a $186 million multistate settlement with surgical mesh manufacturer Boston Scientific Corporation to resolve deceptive marketing allegations.
- Hawaii Attorney General Clare E. Connors obtained an $834 million order against Bristol-Myers Squibb and Sanofi Aventis for allegedly failing to investigate and disclose the ineffectiveness of Plavix® for many patients, including, in particular, Asian and Pacific Island patients.
- Stem Cell Therapy
- Georgia Attorney General Chris Carr joined with the FTC in suing a group of health care providers for making false and misleading claims about stem cell therapies and products.
- New York Attorney General Letitia James obtained a $5.1 million judgment against Park Avenue Stem Cell clinic for allegedly scamming patients out of thousands of dollars through false advertising.
- Mississippi Attorney General Lynn Fitch sued insulin manufacturers and pharmacy benefit managers over allegedly unconscionable insulin pricing activities.
Attorneys general receive more consumer complaints about annoying and deceptive robocalls than any other topic and addressing robocalls is a major priority for the attorney general community. NAAG, along with Michigan Attorney General Dana Nessel and Ohio Attorney General Dave Yost, hosted a virtual Robocall Summit in September to bring law enforcement partners and other interested parties together to share information and strategies to combat illegal robocalls. Plans for a 2022 in person summit are in the works, but Nessel and Yost, and other attorneys general have done more than just talk about the robocall scourge; they have taken action to hold violators accountable.
- Michigan and Ohio partnered with 37 other attorneys general and the FTC to stop a Michigan-based charitable fundraising operation, Associated Community Services, Inc. (ACS), that flooded Americans with 1.3 billion deceptive robocalls resulting in more than $110 million in fraudulent solicitations. Under Consent Judgments with ACS and a number of related defendants, the operators were banned from using robocalls for telemarketing and fundraising and a $500,000 fine was donated to legitimate charities.
- Michigan and Ohio also joined six other states in a federal lawsuit against a Texas-based robocalling operation, Rising Eagle Capital Group LLC, and a VoIP service provider JSquared Telecom LLC, that blasted residents across the country with billions of robocalls under the guise of auto warranties and healthcare-related inquiries from 2018 to 2020.
- Ohio teamed up with the FTC to file the first case against a Voice over Internet Protocol (VoIP) service provider, Globex Telecom, for knowingly facilitating robocalls. Globex and its subsidiaries now are subject to strict injunctive terms related to client screening and monitoring.
- A bipartisan group of 35 attorneys general led by North Carolina Attorney General Josh Stein and Indiana Attorney General Todd Rokita filed an amicus brief in the U.S. 6th Circuit Court of Appeals in Lindenbaum v. Realgy, successfully arguing that the Telephone Consumer Protection Act’s (TCPA) robocall ban applies to calls made between 2015 and 2020 after the U.S. Supreme Court invalidated an exception for government debt collection calls which robocallers claimed invalidated the entire TCPA for calls made during that time period.
- NAAG, on behalf of 51 attorneys general, urged the Federal Communications Commission (FCC) to move up the deadline for smaller telephone companies to implement caller ID technology required by the TRACED Act. The FCC subsequently acceded to this request and moved the deadline up a year to June 30, 2022.
- Florida Attorney General Moody and the FTC obtained $1.8 million in refunds for consumers harmed by an alleged robocall scam committed by Lifewatch Inc.
- Indiana Attorney General Todd Rokita sued Evansville-based Startel Communication LLC, which allegedly made hundreds of millions of illegal calls across the nation.
- Vermont Attorney General TJ Donovan settled with Strategic IT Partner, which allegedly routed thousands of foreign scam robocalls to Vermonters.
E-cigarettes and vaping products
Attorneys general continued their work to address unlawful and deceptive activity by purveyors of tobacco and nicotine-related products, particularly those firms targeting children and young people.
- North Carolina Attorney General Josh Stein obtained a $40 settlement from JUUL requiring it to drastically change its business practices in order to prevent the marketing and availability of its products to minors.
- Arizona Attorney General Mark Brnovich, subsequently announced a $14.5 million settlement with JUUL that similarly ensures that JUUL products will not be marketed or sold to youth in Arizona.
- Massachusetts Attorney General Maura Healey obtained nearly $51 Million from national E-cigarette retailer Eonsmoke, LLC for marketing and selling vaping products to young people.
- Vermont Attorney General TJ Donovan brought several actions against online vaping product sellers for violating a Vermont law banning unlicensed online sales of the products.
- Washington Attorney General Bob Ferguson also brought several actions against online vaping retailers, including E-Juice Vapor, for selling to underage youth.
Attorneys general were active in privacy enforcement and in the legislative arena as comprehensive privacy bills were filed in a growing number of states.
In the legislative arena, Colorado and Virginia joined California as states passing comprehensive privacy laws. California attorney general Rob Bonta released a first-year enforcement update regarding the California Consumer Privacy Act (CCPA). Bonta also provided consumers a consumer privacy interactive tool to directly notify businesses of noncompliance which could trigger a 30-day cure window.
On the enforcement front, data breaches were addressed both in multistate efforts and in single-state actions.
- Forty-one attorneys general, led by Connecticut Attorney General William Tong, Indiana Attorney General Todd Rokita, New York Attorney General Letitia James, and Texas Attorney General Ken Paxton, settled with Retrieval-Masters Creditors Bureau d/b/a American Medical Collection Agency, resolving an investigation into a 2019 data breach that exposed the personal information of more than 7 million individuals, and potentially exposed the personal information of up to 21 million individuals nationally.
- Kansas Attorney General Derek Schmidt obtained a nearly $500,000 settlement with The Corporation Company, Inc. & C T Corporation System, ST2 d/b/a SearchTec, Inc., and Farven Inc., for improperly placing documents containing personal information in public trash bins.
- Acting New Jersey Attorney General Andrew Bruck obtained a $425,000 settlement with three New Jersey-based providers of cancer care, including Regional Cancer Care Associates LLC and related entities, who suffered two 2019 breaches.
- New Mexico Attorney General Hector Balderas settled a child privacy violation investigation concerning Google. Under the settlement agreement, Google agreed to provide more than $3.8 million to support a K-12 education program called The Google New Mexico Kids initiative, a charitable program launched by Google to promote education, privacy, and safety for kids in New Mexico.
- New York Attorney General Letitia James obtained a $200,000 settlement with Filters Fast, an online water filtration retailer, over a 2019 breach that affected 320,000 consumers nationwide.
The role of attorneys general regarding charity work includes working with the sector to educate and assist non-profit leadership and staff to accomplish their charitable missions as well as ensuring that charitable assets are managed prudently and utilized in accordance with applicable requirements. Attorneys general also address deceptive practices committed by unscrupulous actors within the sector. In 2021, NAAG partnered with the National Association of State Charities Officials to host its second virtual national conference in October. Plans are underway to host an in-person event in 2022. Important charities enforcement work in 2021 included the following matters:
- Florida Attorney General Ashley Moody secured $5 million in charitable assets for the benefit of domestic violence centers in Florida through action against the board and CEO of the Florida Coalition Against Domestic Violence which was dissolved after allegedly misusing charitable funds.
- Massachusetts Attorney General Maura Healey sued a former executive director of a homeless shelter for abusing his position to funnel more than $2 million to himself.
- Michigan Attorney General Dana Nessel dissolved 10 sound-alike charities with names similar to valid non-profits who appeared to serve no legitimate purpose.
- Minnesota Attorney General Keith Ellison restructured a charity serving military servicemembers after determining that charity funds were directed to benefit businesses owned by insiders. Ellison also obtained a $955,000 judgment against another veterans-related charity and its owner for defrauding donors. None of the money collected by the charity was used for charitable purposes.
- South Carolina Attorney General Alan Wilson obtained the indictment of a former executive director of a Boys and Girls Club for embezzling more than $100,000 from the organization.
- Virginia Attorney General Mark Herring sued a service dog training charity for allegedly selling inadequately trained dogs, some with behavioral issues, for thousands of dollars.
- Washington Attorney General Bob Ferguson obtained a $1 million settlement with non-profit organization Veterans Independent Enterprises of Washington following alleged embezzlement and misappropriation by its executive director.
Technology – social media and other online businesses
Attorneys general of both parties joined together to express concern about the impact of technology on children and its use to harm consumers.
- Led by Massachusetts Attorney General Maura Healey, Nebraska Attorney General Doug Peterson, Tennessee Attorney General Herbert H. Slatery III, and Vermont Attorney General TJ Donovan, a bipartisan coalition of 44 attorneys general urged Facebook to abandon its launch of Instagram Kids. Facebook subsequently halted the launch.
- Idaho Attorney General Lawrence Wasden and Oregon Attorney General Ellen Rosenblum led 33 bipartisan attorneys general calling for stronger consumer safeguards for money sharing platforms and apps in a letter to the Consumer Financial Protection Bureau.
Attorneys General continued to be active in the higher education space, advocating for action by the U.S. Department of Education on a number of fronts and taking enforcement action against schools and loan servicers accused of deceptive business practices.
- Led by California Attorney General Rob Bonta, 22 attorneys general urged the Department of Education to fix the Public Service Loan Forgiveness (PSLF) program to ensure eligible graduates working in public interest positions receive the loan forgiveness to which they are entitled. Thereafter, the Department announced a major overhaul of the program to make the program live up to its promise of relief for graduates devoting a decade of their lives to public service.
- The U.S. Department of Education granted 115,000 former ITT Tech Students more than $1 billion in relief from federal student loans at the urging of state attorneys general based on systemic deceptive acts and practices committed by the now bankrupt former for-profit school. Colorado Attorney General Phil Weiser and Oregon Attorney General Ellen Rosenblum are leading a multistate coalition submitting a group application for discharge of loans for additional students.
- Massachusetts Attorney General Maura Healey obtained the first national settlement with major student loan servicer PHEAA (Pennsylvania Higher Education Assistance Agency, d/b/a FedLoan Servicing). The settlement allows Massachusetts borrowers in the federal PSLF program to request detailed account reviews and PHEAA to make corrections, restoring borrowers to the correct eligibility status for loan forgiveness, or payments if account corrections are not possible.
- Attorney General Healey also obtained more than $1 million in relief for students from for the for-profit Mildred Elley School for high pressure sales tactics and advertising inflated job placement rates.
- Minnesota Attorney General Keith Ellison obtained a settlement barring an allegedly fraudulent student loan debt settlement company, Capital Student Loan Center, from operating in Minnesota.
- New Hampshire Deputy Attorney General Jane E. Young sued Trigram Education Partners, LLC (“Trigram”) for alleged deceptive acts or practices in its management and operation of the American School of Nursing and Medical Careers in Manchester, New Hampshire.
Predatory lending related to automobiles led to several enforcement actions.
- Massachusetts Attorney General Maura Healey obtained a $27.2 million settlement from Credit Acceptance Corporation over allegations of unfair practices related to subprime auto loans.
- Mississippi Attorney General Lynn Fitch obtained $3.7 million from subprime auto lender Santander for lending to consumers with a high probability of default and aggressive collection practices.
- Pennsylvania Attorney General Josh Shapiro obtained a judgment against Dominion Management of Delaware, Inc. for charging illegally high interest on car title loans. The judgment requires payment of $8.5 million and cancellation of $3.2 million in outstanding loans.
Attorneys general brought several cases involving deceptive efforts to collect time-barred debt as well as overly aggressive and abusive collection tactics.
- Georgia Attorney General Chris Carr obtained nearly $20 million in debt relief from Turtle Creek Assets, Ltd. for using deceptive and abusive collection tactics.
- Illinois Attorney General Kwame Raoul and the FTC returned more than $4 million to consumers who lost money to the Stark Law phantom debt scheme.
- Massachusetts Attorney General Maura Healey obtained $2.25 million from Transworld Systems, Inc. for using deception to collect on time-barred student loan debt.
- Washington Attorney General Bob Ferguson obtained $1.6 million from Convergent for using deception to collect on time-barred student loan debt.
- West Virginia Attorney General Patrick Morrisey sued Bayside Capital Services, LLC for allegedly engaging in unlicensed and abusive collection activity.
- Washington Attorney General Bob Ferguson reached a $4.75 million settlement with LuLaRoe, a multi-level marketing business featuring women’s apparel.
- Arkansas Attorney General Leslie Rutledge and Texas Attorney General Ken Paxton both took action to halt an alleged pyramid scheme targeting African-American faith communities called “Blessing in No Time,” or BINT Operations LLC, which promised participants an over 800% rate of return on a minimum $1,400 investment but instead allegedly caused millions of dollars in losses.
Timeshare exit companies
Consumers with unwanted timeshare interests are often targeted by so called “timeshare exit” companies who make false promises about their ability to relieve consumers of what can be an unending future of maintenance payments for property interests that consumers no longer want and are unable to sell back or resell. Attorneys general took several actions to hold accountable companies that failed to deliver on their promises of relief for timeshare owners.
- Arkansas Attorney General Leslie Rutledge obtained a $2.6 million judgment against timeshare exit company Real Travel, LLC, and the company’s founder, Brian Scroggs.
- Missouri Attorney General Eric Schmitt obtained a judgment against Missouri-based time share exit company Martin Management Group LLC and its owner and operator Steven Martin. who allegedly failed to perform contracted-for services or offer refunds despite allegedly offering money-backed guarantees for those services.
- Washington Attorney General Bob Ferguson took action against Washington-based timeshare exit company, Reed Hein & Associates LLC, requiring it to stop its deceptive timeshare exit practices and pay $2.61 million to Washington.
Looking ahead to 2022
2022 will no doubt bring continuing pandemic-related challenges to the country and to attorneys general as we enter the third year of the COVID-19 pandemic amid the omicron variant surge in cases. The growing reliance of businesses and consumers on technology to market and access goods and services raises a host of concerns related to privacy, transparency, deceptive dark patterns, and other forms of manipulation.
New NAAG President, Iowa Attorney General Tom Miller, has made consumer protection the focus of his NAAG Presidential Initiative and will focus on a range of issues related to technology. Miller’s initiative is called “Consumer Protection 2.0: Tech Threats and Tools” and will focus on threats facing consumers resulting from deceptive uses of technology and also how attorneys general and law enforcement partners can harness technology and social media to better educate consumers about emerging and traditional scams. Miller’s Presidential Summit is scheduled for August 9-10, 2022 in Des Moines and NAAG and the NAGTRI Center for Consumer Protection will be assisting and coordinating with Miller to make the initiative a success.
Attorneys general working together, will continue to provide important leadership in developing national and state policy in the area of consumer protection in 2022. They will also continue their leading role in protecting the consumers of their states and the nation from a wide range of harms through aggressive and effective enforcement actions.
Other articles in this edition include:
- Consumer Chief of the Month
- Attorney General Consumer Protection News: December 2021
- Federal Consumer Protection News: December 2021
- Drug Overdose Deaths in the U.S. Top 100,000 Annually, National Center for Health Statistics (Nov. 17, 2021)