As 2023 begins, this Year in Review examines the consumer protection work the nation’s attorneys general undertook in 2022.
Attorneys general took action on numerous fronts last year, obtaining $22.5 billion in opioids-related settlements from manufacturers, pharmacies and retailers. Combined with the $26 billion obtained through the 2021 National Opioids Settlement with other manufacturers and distributors, the total monetary value totals nearly $50 billion nationally. Settlements valued at $2.9 billion were obtained through a variety of other multistate actions, the largest being the $1.85 billion settlement with student loan servicer Navient (formerly Sallie Mae), a $438.5 million settlement with e-cigarette company JUUL Labs, and a nearly $400 million settlement with Google over its location tracking practices.
But these are not the only areas where attorneys general were active and achieving important results. Attorneys general also carried out important enforcement actions across the consumer protection landscape as well as policy initiatives to protect consumers.
Opioids Settlements Lead to Billions of Dollars in Relief for State and Local Governments to Address Epidemic
Following the 2021 opioids settlements with McKinsey & Company, Purdue Pharma and the Sackler family, three pharmaceutical distributors and Johnson & Johnson, litigation with pharmacy chains took center stage in 2022. In November, agreements in principle were announced with CVS, Walgreens, and Walmart which were valued at $13.8 billion, dependent upon a sufficient number of states and governmental subdivisions signing off on the settlement. As the year ended, states have begun announcing their participation in the settlements. As set forth in the agreements, Walgreens would pay $5.7 billion over 15 years, CVS $5 billion over 10 years, and Walmart $3.1 billion as an expedited payment.
In addition to the pharmacy settlements, major agreements with manufacturers Teva, Allergan, and Endo were announced in 2022. The Teva and Allergan settlement is valued at $6.6 billion with up to $1.2 billion being provided by Teva in the form of generic naloxone. The settlement is subject to states signing onto the agreement in sufficient numbers as determined by Teva. The Endo settlement is valued at $450 million.
Money from the national opioid settlements began flowing to the states in May 2022 and as of December 15, 2022, more than $2.1 billion had been paid to the states, as reported by the national settlement administrator.
Robocall and Telemarketing Fraud Enforcement
Few practices irritate and frustrate consumers more than illegal robocalls and complaints about them rank right at the top of most attorney general lists. In August, 50 attorneys general, led by Indiana Attorney General Todd Rokita, Ohio Attorney General Dave Yost, and North Carolina Attorney General Josh Stein, announced the formation of a national anti-robocall litigation task force to fight illegal robocalls. With the advent of federal law requiring telephone service providers to verify caller ID information transmitted with each call (STIR/SHAKEN requirements), enforcers now have a much greater ability to identify the parties responsible for illegal robocall traffic who attempt to mask their identities by spoofing caller ID information. Working with federal partners at the Federal Trade Commission (FTC), U.S. Department of Justice (DOJ), and the Federal Communications Commission (FCC), as well as the USTelcom Industry Traceback Group, attorneys general filed numerous actions in 2022 to stop unlawful robocallers.
The attorneys general also engaged at the policy level, calling on the FCC to extend STIR/SHAKEN requirements to all service providers who transmit calls and close a loophole that exempted some carriers. The FCC later announced closure of the loophole.
On the telemarketing fraud front, a bipartisan coalition of attorneys general sent two letters urging the FTC to strengthen the Telemarketing Sales Rule to better protect consumers. in support of the FTC’s proposed changes to repeal exemptions for telemarketing calls made to businesses and provide protections related to negative option products or services. NAAG also sent a letter on behalf of 43 attorneys general urging the FTC to require telemarketers and sellers to maintain additional records of their telemarketing activities, prohibit material misrepresentations and false or misleading statements in business to business telemarketing transactions. Final rules have not yet been issued.
Below is a digest of some of the actions state attorneys general took to combat robocalls and telemarketing fraud in 2022.
Ohio Attorney General Dave Yost filed a sweeping robocall enforcement action naming 22 defendants, seeking to halt a massive scheme allegedly responsible for bombarding U.S. consumers with billions of illegal calls, many of them centered on allegedly fraudulent car warranties.
Florida Attorney General Ashley Moody sued Smartbiz Telecom, LLC (Smartbiz) for allegedly routing millions of foreign-based robocalls into the United States. Attorney General Moody also announced that she and the FTC secured court orders permanently banning telemarketers operating an alleged credit card interest rate reduction scam from working in the debt-relief industry.
North Carolina Attorney General Josh Stein sued “gateway” telephone service provider Articul8 and its owner for facilitating illegal and fraudulent telemarketing calls and robocalls that targeted millions of people in the U.S and allegedly violated the Telemarketing Sales Rule.
New Jersey Attorney General Matthew J. Platkin obtained a $10 million judgment against a telemarketing company that allegedly defrauded timeshare owners.
Wisconsin Attorney General Josh Kaul announced a settlement with telemarketer N.C.W.C., Inc. for alleged violations of Wisconsin telemarketing laws in its marketing of extended vehicle service plans.
Georgia Attorney General Chris Carr entered into a settlement with former telemarketing companies Evergreen Publishing Group LLC, Readers Services, Inc., and their owner, Chris Sidhilall, resolving allegations that the companies engaged in illegal and deceptive telemarketing activities in the course of selling magazine subscriptions to older and disabled adults.
COVID-Related Cases Surged in Early 2022 With Omicron Variant Uptick
The rise of the Omicron variant in late 2021 led to a shortage of over-the-counter tests and a new rash of COVID-related cases regarding testing issues. Attorneys general also continued to encounter defendants peddling unproven, ineffective treatments or protection, making misleading claims about testing, failing to provide refunds for cancelled events, and peddling bogus vaccination cards.
Oregon Attorney General Ellen Rosenblum, Minnesota Attorney General Keith Ellison, and Washington Attorney General Bob Ferguson each sued Center for Covid Control and its testing partner, Doctors Clinical Laboratory for problems with its testing services – both as to accuracy and overstating turnaround time for results. After the Oregon, Minnesota, and Washington actions, the company ceased operations.
Attorneys general across the country continued to advise consumers to beware of phony COVID test scams (California, Florida, Illinois, Maryland, Michigan, New Mexico) and warned testing companies not to misrepresent turnaround times for test results (New York, Colorado) amid increasing cases due to the Omicron variant.
Colorado Attorney General Phil Weiser announced three individuals pleaded guilty to felony and misdemeanor criminal charges related to the deceptive marketing and sale of a deodorizer they knew could not kill the coronavirus and prevent surface recontamination during the COVID-19 pandemic.
Michigan Attorney General Dana Nessel filed an action against a Michigan man accused of promoting the sale of blank COVID vaccination cards under a fake Facebook account. costs.
Washington Attorney General Bob Ferguson announced a settlement with Alpha Omicron Pi, a national sorority, requiring the refund or waiver of housing fees it charged dozens of University of Washington students during the COVID-19 pandemic when they were unable to access the housing.
Privacy Legislation and Enforcement Actions
Attorneys general continued to be busy on a number of privacy-related fronts in 2022. Connecticut and Utah passed laws in 2022, joining California, Colorado, and Virginia as states who have passed comprehensive data privacy laws. In Colorado, Attorney General Phil Weiser announced the publication of proposed Colorado Privacy Act rules. Attorney General Weiser then released an amended version of the draft proposed rules in December and the public comment period remains open through February 1, 2023, the date of a public hearing on the rules. In California, the California Privacy Protection Agency began formal rulemaking to adopt regulations to implement the Consumer Privacy Rights Act of 2020 (CPRA). Modified text of proposed regulations was issued in November. The CPRA went into effect on January 3, 2023.
Attorneys general also resolved several major multistate privacy matters.
Led by Nebraska Attorney General Doug Peterson and Oregon Attorney General Ellen Rosenblum, a bipartisan group of 40 attorneys general announced a $392 million settlement with Google over its location tracking practices. The attorneys general opened the Google investigation following press reports that revealed Google tracked users’ locations even when users told Google not to. The settlement requires Google to be truthful and more transparent with consumers about its practices.
Led by Connecticut Attorney General William Tong, District of Columbia Attorney General Karl Racine, Illinois Attorney General Kwame Raoul, and Maryland Attorney General Brian Frosh, a bipartisan coalition of 40 attorneys general obtained $16 million in settlements with Experian and T-Mobile regarding data breaches in 2012 and 2015 that compromised the personal information of millions of consumers nationwide.
New Jersey Attorney General Matthew J. Platkin and Pennsylvania Attorney General Josh Shapiro led a bipartisan group of 7 attorneys general who secured $8 million as a result of a multistate action following a Wawa data breach.
Led by Connecticut Attorney General William Tong, Florida Attorney General Ashley Moody, and Washington Attorney General Rob Ferguson, 46 attorneys general obtained a $1.25 million multistate settlement with Carnival Cruise Line stemming from a 2019 data breach.
Dark Patterns/Online Advertising
With consumers spending more and more time and money online and making purchasing decisions based on online reviews, it’s not surprising that deceptive practices abound on the internet. The FTC released a report showing how companies are increasingly using sophisticated design practices known as “dark patterns” that can trick or manipulate consumers into buying products or services or giving up their privacy. The dark pattern tactics detailed in the report include disguising ads to look like independent content, making it difficult for consumers to cancel subscriptions or charges, burying key terms or junk fees, and tricking consumers into sharing their data.
Led by Illinois Attorney General Kwame Raoul and Iowa Attorney General Tom Miller, a bipartisan group of 19 attorneys general urged the FTC to address deceptive ‘dark patterns’ in digital advertising.
Below are some notable actions by attorneys general to stop these practices and hold violators accountable.
New York Attorney General Letitia James secured $2.6 million from an online travel agency, Fareportal Inc. for allegedly misleading consumers by falsely advertising that airline tickets or hotel rooms were quickly selling out to pressure customers into making purchases on its platforms.
Pennsylvania Attorney General Josh Shapiro announced a settlement with online food delivery marketplace, Grubhub, resolving allegations that Grubhub’s platform used deceptive elements that led consumers sometimes being charged higher prices than they would be if they ordered from the restaurant directly.
Washington Attorney General Bob Ferguson filed a federal lawsuit against a plastic surgery provider for falsely and illegally inflating its ratings on online rating platforms.
Led by Connecticut Attorney General William Tong, Oregon Attorney General Ellen Rosenblum, and Texas Attorney General Ken Paxton, a bipartisan group of 34 states and territories announced a $438.5 million agreement in principle with JUUL Labs, resolving a two-year investigation into the e-cigarette manufacturer’s marketing and sales practices. In addition to the financial terms, the settlement would force JUUL to comply with a series of strict injunctive terms severely limiting their marketing and sales practices. Connecticut led the investigation and negotiations along with Texas and Oregon.
Separately, Washington Attorney General Bob Ferguson settled the state’s case with e-cigarette company JUUL for $22.5 million.
A bipartisan coalition of attorneys general announced a nationwide investigation of TikTok to determine whether the company violated state consumer protection laws and put the public, especially young children and young adults, at risk. On a related note, Mississippi Attorney General Lynn Fitch and North Carolina Attorney General Josh Stein led a bipartisan coalition of 44 attorneys general urging TikTok and Snapchat to give parents more control over their children’s social media usage in a letter to the two social media companies. These efforts follow the 2021 announcement that attorneys general are investigating Facebook for promoting its social media platform – Instagram – to children and young adults despite knowing that such use is associated with physical and mental health harms.
Indiana Attorney General Todd Rokita announced two separate lawsuits against TikTok —related to allegedly false claims that the app contains only “infrequent/mild” sexual content, profanity, or drug references — and that it protects users’ information from the Chinese government and Communist Party.
Impersonation scams remain one of the largest sources of reported consumer fraud loss according to the FTC. Impostors committing romance scams and government and business impersonations scams have fleeced consumers of more than $6 billion since 2018. Attorneys general work to combat these crimes through enforcement actions and consumer education efforts.
Led by Florida Attorney General Ashley Moody, Iowa Attorney General Tom Miller, Mississippi Attorney General Lynn Fitch, Pennsylvania Attorney General Josh Shapiro, and Tennessee Attorney General Herbert H. Slatery III, 49 attorneys general urged the Federal Trade Commission (FTC) to adopt a national rule to target impersonation scams.
Joining seven federal agencies who launched a national public awareness campaign to fight romance scams, attorneys general from Arkansas, Connecticut, Florida, Georgia, Nevada, New Hampshire, North Carolina and others issued Valentine’s Day consumer alerts, warning consumers about falling for romance scams that would take their money and break their hearts.
Arizona Attorney General Mark Brnovich obtained an agreement permanently banning a debt collector and awarding more than $1.6 million in restitution resolving 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.
Georgia Attorney General Chris Carr announced a guilty plea by a man who stole more than $230,000 from elderly victims through romance scams.
Maryland Attorney General Brian Frosh announced the guilty plea by a Maryland man charged with defrauding romantic partners.
Motor Vehicle Cases
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.
California Attorney General Rob Bonta announced a $25 million settlement with Bosch for its role in the diesel emissions cheating scandals at Volkswagen and Fiat Chrysler.
Illinois Attorney General Kwame Raoul and the Federal Trade Commission announced a $10 million settlement with an Illinois-based auto group over allegedly illegal fees and racial discrimination in its financing.
Pennsylvania Attorney General Josh Shapiro announced criminal charges against 30 individuals and 21 businesses for “title washing” and for re-titling stolen vehicles in three Pennsylvania counties.
New Hampshire Attorney General John M. Formella entered into a $1.25 million settlement agreement with a Kia dealership resolving allegations of falsifying customer loan applications to qualify customers for loans they could not afford.
Led by Illinois Attorney General Kwame Raoul, a bipartisan group of 36 attorneys general announced a $1 million national settlement with CarMax Auto Superstores Inc. that will require the retailer to disclose to consumers unrepaired recalls related to the safety of its used vehicles before vehicles are purchased.
Maryland Attorney General Brian Frosh announced a $1.1 million settlement with a Kia dealership that allegedly charged consumers hidden fees not included in the advertised price.
Attorneys general work to ensure that non-profit corporations meet obligations imposed by their charitable missions. Regulatory oversight and enforcement activity extends to those who provide services to charitable organizations. Below are some notable actions from 2022.
Minnesota and Washington took action against charitable hospital organizations whose billing and collection practices allegedly violated their obligations to assess patients’ ability to pay, and to provide free healthcare, known as “charity care,” to qualifying patients.
Minnesota Attorney General Keith Ellison negotiated an extension to a regulatory agreement with all nonprofit hospitals in Minnesota to protect patients from unfair and abusive billing and collection practices. The agreement covers all 128 nonprofit hospitals in Minnesota — and for the first time, covers one of Minnesota’s two for-profit hospital systems.
Washington Attorney General Bob Ferguson sued five hospitals and nine health care facilities for violating Washington’s charity care law that protects eligible low-income Washingtonians from out-of-pocket hospital costs and applies to both for-profit and not-for-profit corporations. The suit was expanded to include additional facilities.
California Attorney General Rob Bonta sued two alleged sham health care sharing ministry companies and their founding family members for advertising but failing to provide insurance-like coverage for subscribers, despite collecting millions of dollars in subscriptions.
Led by Louisiana Attorney General Jeff Landry, Mississippi Attorney General Lynn Fitch, and New Mexico Attorney General Hector Balderas, a bipartisan coalition of 28 attorneys general sent a letter to crowdfunding charity platform GoFundMe asking it to provide greater transparency regarding its terms of service. The letter follows criticism of the platform following actions taken in connection with donations supporting the truckers’ protest in Canada.
In addition to working to address the opioids crisis, attorneys general led consumer protection enforcement efforts in regard to other issues involving pharmaceuticals and health fraud including those referenced below.
Arkansas Attorney General Leslie Rutledge, Illinois Attorney General Kwame Raoul, and Kansas Attorney General Derek Schmidt filed separate suits against insulin drug manufacturers and pharmacy benefit managers for allegedly inflating insulin and other diabetic drug prices. Arkansas, Illinois, and Kansas became the latest states to sue over insulin pricing, joining Kentucky, Mississippi, and Minnesota.
Washington Attorney General Bob Ferguson obtained $500,000 from Seattle-based US Stemology and its owner, Dr. Tami Meraglia in resolving allegations the defendants made deceptive claims that its stem cell injections could treat COVID-19 and dozens of other serious medical conditions.
Delaware Attorney General Kathy Jennings, New Jersey Attorney General Matthew J. Platkin, and Pennsylvania Attorney General Josh Shapiro, working with the U.S. Department of Justice and Consumer Financial Protection Bureau, obtained a $20 million settlement with a former top mortgage lender over allegations of redlining in the greater Philadelphia region.
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.
District of Columbia Attorney General Karl Racine obtained nearly $2 million for victims of an alleged rent hike scam and the District following a favorable trial judgment against Equity Residential Management, LLC which manages an apartment complex.
Attorney General Maura Healey announced agreements with two companies that allegedly facilitated discrimination against tenants through “pre-qualification software” they sold to property managers and landlords in Massachusetts.
Kentucky Attorney General Daniel Cameron and North Carolina Attorney General Josh Stein are leading a bipartisan coalition of nine attorneys general investigating Pink Energy, whose customers have filed hundreds of consumer complaints alleging deceptive business practices. The group sent a letter to five solar power lending companies urging them to suspend the payment obligations of Pink Energy customers until the completion of the coalition’s investigation into possible consumer protection law violations. Missouri Attorney General Eric Schmitt filed suit against the company, for misrepresentations and failing to properly install or repair its systems.
Minnesota Attorney General Keith Ellison sued solar panel sales companies and lenders for allegedly defrauding Minnesota homeowners. The complaint alleges a host of deceptive practices including misrepresenting the companies’ relationship with local utilities and misrepresenting the benefits and cost savings.
Education/Student Loan Issues
Attorneys general continued to work to address student loan servicing issues and advocate for relief from federal student loans related to for-profit colleges. Navient, the largest servicer of federal student loans, agreed to a $1.85 billion settlement. Navient will make a total of $95 million in restitution payments of about $260 each to approximately 350,000 harmed consumers nationwide and will cancel nearly $1.7 billion in subprime private student loans owed by nearly 66,000 borrowers nationwide. Navient also agreed to pay $142.5 million to the attorneys general.
The efforts of attorneys general were also crucial to decisions by the U.S. Department of Education to forgive federal student loans for students who had attended ITT Technical Institute, Westwood College, Corinthian College, and DeVry Institute, among others. Supported by evidence submitted by attorney general offices, the Department provided more than $11.6 billion in debt relief to students of these four institutions alone, based on a range of alleged deceptive acts and practices, including conduct related to recruitment and representations about future employment prospects.
Minnesota Attorney General Keith Ellison and North Carolina Attorney General Josh Stein, with the Consumer Financial Protection Bureau (CFPB) and the Los Angeles City Attorney’s Office, announced that more than 87,000 consumers nationwide who were harmed by a student loan debt-relief company will receive $95 million in restitution. The governments alleged that Consumer Advocacy Center Inc., d/b/a Premier Student Loan Center and related companies violated state and federal law by committing deceptive acts and practices related to Premier’s student-loan debt-relief services. The funds will be paid from the CFPB’s civil penalty restitution fund.
And in an important enforcement action, California Attorney General Rob Bonta announced a court decision imposing $22.37 million in penalties against online, for-profit school, Ashford University, and its parent company Zovio, Inc. (formerly Bridgepoint Education). The decision found that the defendants violated the law by giving students false or misleading information about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to persuade them to enroll at Ashford. Zovio has appealed the decision.
North Carolina Attorney General Josh Stein obtained $23 million in financial relief from a debt collection company, who used deceptive tactics, including allegedly sending simulated court notices threatening criminal action.
Scams Targeting Military Servicemembers
Led by New York Attorney General Letitia James, a bipartisan coalition of 18 states and the FTC recovered $34.2 million for thousands of U.S. servicemembers allegedly defrauded by Harris Jewelry.
As 2023 begins, we see renewed commitments by state and territory attorneys general to protect consumers from deceptive trade practices and to address new and emerging concerns as they have historically done. With the ever-changing marketplace, it is difficult to predict what new enterprise or business activity imperiling consumers will emerge in 2023. Attorneys general have demonstrated that working together, they possess the clout to deter, combat, and reform business practices that are unfair and harm consumers and ethical businesses. Expect more of the same in 2023.
Other articles in this edition include:
- Attorney General Consumer Protection News: December 2022
- Consumer Chief of the Month
- Federal Agency and Other Consumer Protection News: December 2022