Multistate Actions
Led by Mississippi Attorney General Lynn Fitch and Nevada Attorney General Aaron Ford, a bipartisan group of nineteen attorneys general, announced the filing of an amicus brief in the Ninth Circuit criticizing the lower court’s specific jurisdiction analysis in Briskin v. Shopify, Inc. The brief explained that the adoption of the lower court’s analysis requiring differential excess contacts to establish specific jurisdiction over an out-of-state internet company “could operate to deprive state attorneys general of a proper venue to enforce their respective states’ consumer protection and other laws against internet-based companies.”
Led by Florida Attorney General Ashley Moody, Illinois Attorney General Kwame Raoul, New York Attorney General Letitia James and Texas Attorney General Ken Paxton, a bipartisan coalition of states announced a 30-state settlement with Cameo resolving allegations that Cameo violated state consumer protection laws and the Federal Trade Commission’s (FTC) Endorsement Guides’ paid advertiser disclosure requirements. The coalition alleged that Cameo failed to provide appropriate disclosures to consumers purchasing personalized video business messages that an endorsement of a product is a paid endorsement. Additionally, the investigation allegedly showed Cameo failed to refund users who paid for the business Cameo feature but mistakenly signed up for the less-expensive personal message Cameos. As part of the agreed settlement, Cameo will pay $100,000 in civil penalties and establish and maintain programs and policies to help ensure its website and mobile applications users comply with all applicable state and federal laws, including the FTC’s Endorsement Guides.
Individual Attorney General Actions
Arizona Attorney General Kris Mayes sued Cummins and FCA (formerly Fiat Chrysler Automobiles) for deceptive “super clean” truck claims allegedly defrauding Arizonans by falsely advertising and selling thousands of so-called environmentally friendly, low-emission “super clean” vehicles, without disclosing to consumers that the vehicles had illegal emissions defeat devices installed in them and were not clean trucks at all. The lawsuit alleges that the defendants used illegal defeat devices to bypass EPA emissions testing, ensuring these vehicles passed the tests but did not comply with emissions standards during normal operation. Cummins, the engine designer and manufacturer, allegedly knew its diesel engines included these illegal defeat devices and software but failed to disclose this when applying for Certificates of Compliance to sell these vehicles in the United States, including Arizona. Cummins settled with U.S. EPA and California regarding related issues in January.
Arkansas Attorney General Tim Griffin defeated TikTok’s motion to dismiss allowing its deceptive trade practices lawsuit to continue in state court. This decision marks the third time this year that a lawsuit against a social media platform has cleared this important legal hurdle in Arkansas. TikTok, Inc., and its parent company, ByteDance, LTD, argued the state district court lacked personal jurisdiction over the defendants, that Arkansas’s deceptive trade practices claims should fail, and that its claims were preempted by the federal Communications Decency Act.
Connecticut Attorney General William Tong sued solar energy companies SunRun, Bright Planet, and Elevate Solar alleging salespeople impersonated consumers, forged signatures, failed to obtain permits, and installed non-functional solar panels. The complaint alleges multiple violations of the Connecticut Unfair Trade Practices Act and Home Improvement Act and seeks restitution for consumers, disgorgement of profits, civil penalties, and injunctive relief blocking the companies from further illegal conduct
Delaware Attorney General Kathy Jennings launched a portal to help businesses prepare for enforcement of the new Delaware data privacy law. The Delaware Department of Justice’s Consumer Protection Unit launched a new personal data privacy portal, privacy.delaware.gov, as a navigational tool for parents, consumers and businesses that handle Delawareans’ personal data to help prepare for the upcoming implementation of the Delaware Personal Data Privacy Act (DPDPA), which goes into effect in January 2025.
Indiana Attorney General Todd Rokita announced a recovery of almost half a million dollars against Honest Abe Auto Sales. The attorney general alleged the operator of four Indianapolis used car businesses engaged in bait-and-switch sales tactics, falsely advertised prices and preyed on Hoosiers with subprime credit.
Minnesota Attorney General Ellison took actions to protect consumers from allegedly deceptive conduct in the solar industry by filing four new settlements against solar installers Kris Sipe and Trevor Sumner and advertisers EnergyBillCruncher and Prospect Bacon. The settlements alleged that the solar installers failed to install promised solar arrays and forced consumers to renegotiate the interest rates on their solar loans and that the two lead generators allegedly published factually incorrect advertisements on Facebook and elsewhere, then sold consumer data to local solar installers.
Nebraska Attorney General Mike Hilgers announced four new successful settlements reached in his statewide litigation campaign against shops selling allegedly dangerous synthetic THC products. The additional settlements bring the total to six retailers that have now settled with the Nebraska Attorney General’s Office. The statewide campaign was launched in order to address allegedly rampant unlawful conduct in the industry, which continues to cause serious harm to Nebraska consumers including sending adults and children to hospitals.
New Hampshire Attorney General John Formella announced the indictment of Rachel Chen in three counties for her alleged role in tech support scams targeting elderly New Hampshire residents. Chen faces a maximum penalty on each charge of 7 ½ – 15 years in the New Hampshire State Prison and a $4,000 fine on each indictment if convicted.
Ohio Attorney General Dave Yost launched a campaign to combat the influx of illegal vaping devices flooding Ohio communities, an initiative aimed at protecting young people from addiction, respiratory problems and other severe health risks associated with these products. The Attorney General filed complaints against three Ohio businesses for allegedly selling illegal vapes, failing to disclose the illegality of these products, and misrepresenting their authorization status. To date, the FDA has authorized only 27 e-cigarette products, all tobacco or menthol flavored. Any vape products not authorized by the FDA are illegal.
Oregon Attorney General Ellen Rosenblum announced passage of the new Oregon data privacy law offering significant new consumer privacy protections. The Oregon Consumer Privacy Act (OCPA) is the result of the efforts of the Attorney General’s Consumer Privacy Task Force, a group of over 150 experts and stakeholders who met every month for 4 years, gained insights from Oregon and national business and civic leaders, and studied best-practice models from states around the country. The OCPA imposes specific obligations on businesses and nonprofits.
Pennsylvania Attorney General Michelle Henry settled a lawsuit against the owners of Split Rock Timeshare Resort who allegedly denied consumer access and overcharged fees. The Consent Petition for Final Decree will require Split Rock Investments, LLC, and SCH USA, LLC — doing business as “Bel Air Owner’s Circle”— to comply with applicable laws and fund a restitution pool up to $250,000 for eligible consumers.
Vermont Attorney General Charity Clark sued pharmacy benefit managers (PBMs) for allegedly driving up prescription costs. The lawsuit against PBMs Evernorth (owner of Express Scripts) and CVS as well as nearly two dozen affiliated entities accused defendants of unfairly and deceptively driving up prescription drug prices in Vermont. The Attorney General’s lawsuit alleges these companies violated Vermont’s Consumer Protection Act by manipulating the marketplace and reducing access to certain prescription drugs, including lower-cost drugs, through a series of tactics with no transparency in their decision-making process.
Washington Attorney General Bob Ferguson’s AI Task Force convened its inaugural meeting. The AI Task Force brings together technology experts, civil liberty groups, and many other representatives who have a stake in the future of artificial intelligence. The task force will assess the technology’s benefits and challenges, issue findings and reports, and make policy recommendations to the legislature regarding guidelines and potential legislation for AI systems.
Federal Consumer Protection News
Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau proposed an interpretive rule on “earned wage” products. The CFPB stated that many paycheck advance products, sometimes marketed as “earned wage” products, are consumer loans subject to the Truth in Lending Act. The CFPB also published a report examining employer-sponsored paycheck advance loans finding that workers take out an average of 27 such loans per year and that the typical employer-sponsored loan carries an annual percentage rate (APR) over 100%.
The CFPB entered into Consent Orders with Fifth Third Bank (Fifth Third) for a range of allegedly illegal activities that, if approved by the court, would result in the bank paying $20 million in penalties in addition to paying redress to approximately 35,000 harmed consumers, including about 1,000 who had their cars repossessed. Specifically, Fifth Third would pay a $5 million penalty for forcing vehicle insurance onto borrowers who had coverage. The CFPB also filed a proposed court order that would require Fifth Third to pay a $15 million penalty for opening fake accounts in the names of its customers. The proposed court order bans Fifth Third from setting employee sales goals that incentivize fraudulently opening accounts.
Federal Trade Commission
The Federal Trade Commission (FTC) took action to stop a debt relief scheme allegedly targeting Spanish-speaking student loan borrowers. The operators allegedly often targeted Spanish-speaking consumers in Puerto Rico, pretended to be affiliated with the Department of Education and its loan servicers, and made false promises of low, permanently fixed monthly payments and loan forgiveness.
The FTC, International Consumer Protection and Enforcement Network’s (ICPEN) and Global Privacy Enforcement Network (GPEN) announced the results of a review of the use of dark patterns affecting subscription services and privacy. The potential dark patterns most often encountered during the review were “sneaking” practices, which involve hiding or delaying the disclosure of information that might affect a consumer’s purchase decision, and interface interference, techniques such as obscuring important information or preselecting options that frame information in a way that steers consumers toward making decisions more favorable for the business.
The FTC sent warning letters to companies to stop warranty practices that allegedly harm consumers’ right to repair. FTC staff sent warning letters to eight companies informing them that their practices violate the Magnuson-Moss Warranty Act (MMWA), a law that governs consumer product warranties and is enforced by the FTC.
The FTC took action to stop unauthorized billing scams that have taken in over $200 million from consumers. A U.S. district court in central Florida unsealed an FTC complaint charging two related groups of defendants with defrauding consumers nationwide by enrolling them, without their knowledge, into continuity plans where they are shipped and charged repeatedly for personal care products that they did not agree to purchase. The FTC’s complaint names two related groups as defendants: 1) U.K. resident Harshil Topiwala, Florida resident Kirtan Patel, and the three companies they operate, Legion Media, LLC, KP Commerce, LLC, and Pinnacle Payments, LLC; and 2) Florida resident Manindra Garg and a company he operates, Sloan Health Products, LLC.
In Other Federal News
Federal Communications Commission Chairwoman Rosenworcel proposed first-of-their-kind AI-generated robocall rules. The proposal was adopted by the Commission and seeks comment on the definition of AI-generated calls and rules requiring callers to disclose their use of AI-generated calls, supporting technologies that alert and protect consumers from unwanted and illegal AI robocalls, and protecting positive uses of AI to help people with disabilities utilize the telephone networks.
Charities News
DC Attorney General Brian Schwalb announced a resolution of a lawsuit against the National Rifle Association (NRA) and the NRA Foundation for allegedly misusing nonprofit funds and other violations of the District’s Nonprofit Corporation Act (NCA). The terms of the settlement require thorough oversight and extensive operational changes to ensure that the Foundation operates independently from the NRA and fully complies with District nonprofit laws.
The National Association of State Charity Officials (NASCO) and NAAG announced their annual conference to be held October 8-10, 2024, in Baltimore, Maryland. The conference is the sole annual event at which charity regulators and nonprofit organizations and their attorneys, accountants, fundraisers, and advisers can meet, learn about, and discuss issues of interest across the charitable sector. The conference will provide an opportunity to hear from regulators and others in the nonprofit sector on current issues. The first day of the program offers open registration to all those in the charities community, with the remaining two days limited to government staff only.
Military & Veterans News
The FTC announced that Career Step is to pay $43.5 million in cash and debt cancellation to resolve charges it allegedly used deceptive advertising to lure servicemembers and their spouses. According to the FTC’s complaint, Georgia-based company Career Step (also doing business as CareerStep, CareerCert, and Carrus), touted falsely-inflated employment outcomes, job placement, and partnerships with prominent companies.
