The National Attorneys General Training & Research Institute

The National Attorneys General Training & Research Institute The National Attorneys General Training & Research Institute

Center for Consumer Protection Monthly April 2020

Consumer Chief of the Month: Cholla Khoury, New Mexico

During this uncertain time, when our citizens are at their most vulnerable, the work we do in the consumer protection world is critical both to the well-being of our citizens and the successful reemergence of our economies. It is humbling to be asked to write about consumer protection as the critical importance of this topic is garnering more attention than ever before. However, the current crisis doesn't change the underlying principle that bad business is bad for everyone: consumers; businesses trying to do the right thing; and our economies, both statewide and nationally. 

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Article of the Month: 

Turning the Mitten on Your Map into a Boxing Glove Against Gougers

Darrin Fowler, Assistant Attorney General, Michigan Attorney General's Office

As COVID-19 spreads across the country, those of us working in consumer protection are now confronting the scourge of those seeking to profit from the upheaval through price gouging.

From the onset of the public emergency, the Michigan Attorney General's Office aimed for a prompt and powerful response to misconduct in the market for consumer goods. With the earliest reports of price gouging, we were concerned about a situation that could deteriorate if left unchecked. In the introduction to his 2000 book "The Tipping Point," columnist and author Malcolm Gladwell presciently observed: "Ideas and products and messages and behaviors spread just like viruses do." Applying Gladwell's premise to the present dynamic, people and businesses seeing an out-of-control market are more likely to engage in price gouging than they would be under ordinary conditions.

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A note from the NAGTRI Center for Consumer Protection (CCP) to our readers: NAAG and the CCP are working to provide information to our members and the public about what attorneys general are doing across the country related to coronavirus and consumer protection. ConsumerResources.org, our public-facing consumer protection website, is being updated regularly with COVID-19-related information from attorneys general offices including enforcement actions, cease and desist letters, consumer alerts, and press releases. It also has links to state price gouging statutes. If you have information that you think would be useful for the public or the attorney general community, please send it to CCP Director, Abby Stempson, at astempson@naag.org or Todd Leatherman, CCP Program Counsel at tleatherman@naag.org. Thank you for the work you are doing to protect consumers in this trying time.

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Scam Alert:  

Don't Fall for COVID-19 Puppy Scams

 

 



Federal Consumer Protection News

Consumer Financial Protection Bureau:

  • The Consumer Financial Protection Bureau (Bureau) announced a settlement with Cottonwood Financial, Ltd., which does business under the name Cash Store. Cash Store, based in Irving, Texas, owns and operates roughly 340 retail lending outlets in Idaho, Illinois, Michigan, New Mexico, Texas, Utah, and Wisconsin. The Bureau found that in marketing, servicing, and collecting on high-interest payday, auto-title, and unsecured consumer-installment loans, Cash Store violated the Consumer Financial Protection Act, Fair Credit Reporting Act, and Truth in Lending Act. The consent order requires Cash Store to pay more than $1.3 million in redress and penalties.
  • The CFPB has released a video on how struggling homeowners can obtain mortgage forbearance if their finances are impacted due to the COVID-19 pandemic.
  • The CFPB took steps to make it easier for consumers to receive pandemic-relief payments, including the economic impact payments authorized in the Coronavirus Aid, Relief, and Security Act (CARES Act), through prepaid accounts. The Bureau issued an interpretive rule on the treatment of pandemic relief payments under Regulation E and application of the compulsory use prohibition. The Rule eases restrictions and allows for alternative methods of payments including prepaid cards.
  • The CFPB took steps to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 pandemic. The Bureau is issuing an interpretive rule clarifying that consumers can exercise their rights to modify or waive certain required waiting periods under the TILA-RESPA Integrated Disclosure Rule and Regulation Z rescission rules. The Bureau is also issuing an FAQ document that addresses when creditors must provide appraisals or other written valuations to mortgage applicants in order to expedite access to credit for consumers affected by the COVID-19 pandemic.

Federal Trade Commission:

  • The United States District Court for the District of Columbia approved the Federal Trade Commission's (FTC) 2019 Facebook settlement. The court stated in a Memorandum Opinion that the settlement was reasonable and in the public interest. Noting that it retained jurisdiction over the matter the court stated: "in the event that the parties return to this Court because the United States alleges, once again, that Facebook has reneged on its promises and continued to violate the law or the terms of the amended administrative order, the Court may not apply quite the same deference to the terms of a proposed resolution." Thereafter, the Commission voted 3-2 to amend its 2012 privacy order with Facebook to include the provisions that were incorporated in the settlement. FTC Chair Joe Simons issued a statement regarding the court's decision.
  • The FTC announced that Progressive Leasing, a company that markets rent-to-own payment plans in tens of thousands of retail stores nationwide, will pay $175 million to settle charges it misled consumers about the true price of items purchased through its plans. According to the FTC's complaint, consumers who visited retailers to buy items such as furniture, jewelry, or cellphones frequently were told that Progressive's payment plans were "same as cash" or "no interest," leading consumers to believe they would not be charged more than an item's sticker price. Under the terms of the proposed settlement, Progressive will be required to pay $175 million to the FTC to be used for providing refunds to affected consumers. The Commission vote authorizing the staff to file the complaint and proposed stipulated final order was 3-2, with Commissioners Rohit Chopra and Rebecca Kelly Slaughter dissenting. Commissioner Christine S. Wilson issued a statement, and Commissioner Slaughter issued a dissenting statement.
  • Three California-based student loan debt relief companies and their owner Adam Owens have agreed to be permanently banned from the debt relief business in order to settle FTC charges that they falsely promised to lower or eliminate consumers' student loans in return for an illegal upfront fee. The FTC also alleged that the companies and Owens failed to disclose that they paid consumers for positive Better Business Bureau reviews. The proposed final stipulated order would further require the defendants to turn over more than $470,000 in assets, after which the remainder of the $23.9 million judgment would be suspended due to defendants' inability to pay.
  • The FTC sent joint letters with the Federal Communications Commission (FCC) to three companies providing Voice over Internet Protocol (VoIP) services, warning them that routing and transmitting illegal robocalls, including coronavirus-related scam calls, is illegal and may lead to federal law enforcement against them. The agencies sent a separate letter to The Broadband Association (USTelecom), a trade association that represents U.S.-based telecommunications-related businesses. The letter thanks USTelecom for identifying and mitigating fraudulent robocalls that are taking advantage of the Coronavirus national health crisis, and notes that the USTelecom Industry Traceback Group has helped identify various entities that appear to be responsible for originating or transmitting Coronavirus-related scam robocalls. The letter further notifies USTelecom that if, after 48 hours of the release of the letter, any of the specified gateway or originating providers continue to route or transmit the specified originators' robocalls on its network, the FCC will: 1) authorize other U.S. providers to block all calls coming from that gateway or originating provider; and 2) authorize other U.S. providers to take any other steps as needed to prevent further transmission of unlawful calls originating from the originator.
  • A Canadian company, RevenueWire, and its CEO, Roberta Leach, will pay $6.75 million to settle FTC charges alleging they laundered credit card payments for, and assisted and facilitated, two tech support scams previously sued by the FTC. According to the FTC, RevenueWire entered into contracts with payment processors to obtain merchant accounts to process credit card charges for its own sales of eBooks and software. In reality, however, RevenueWire used its accounts to process credit card charges and collect payments from consumers on behalf of ICE and Vast, two companies that allegedly used tech support scams to bilk consumers out of millions of dollars.
  • The FTC is mailing checks totaling more than $3.1 million to consumers who were victims of a student loan debt relief and credit repair scheme. Strategic Student Solutions (also doing business under other names) and its owner, Dave Green, settled FTC allegations that they charged consumers illegal upfront fees and falsely promised to reduce their student loan debt or monthly payments by enrolling them in student loan forgiveness or other programs. The FTC also alleged that the defendants falsely promised to apply monthly payments to consumers' student loans and to improve their credit scores and histories. The FTC is mailing 20,988 checks averaging $148 each to victims of the scheme. If recipients have questions about the refunds, they should contact JND Legal Administration at 888-304-0184.
  • The FTC is mailing checks totaling more than $1 million to individuals targeted by a business opportunity scheme that promised consumers big profits from selling on Amazon. The FTC and the Minnesota Attorney General's Office alleged that Sellers Playbook, Inc. lured consumers into believing that they were likely to earn thousands of dollars a month selling products on Amazon. In marketing their "system" for selling on Amazon, the defendants made false and unsubstantiated claims, such as make "$20,000 a month" and "Potential Net Profit: $1,287,463.38." The FTC is mailing 350 checks averaging $2,954 each to victims of the scheme who previously filed a complaint with law enforcement. If recipients have questions about the refunds, they should contact Rust Consulting at 877-465-1469.
  • The marketers of three supplements called Neurocet, Regenify, and Resetigen-D have settled an FTC complaint alleging they deceptively promoted their products to older Americans using false claims that their products could stop pain and treat age-related ailments. The proposed stipulated order would bar the defendants, five related companies called Mile High Madison Group, Inc., Nordic Clinical, Inc., Encore Plus Solutions, Inc., Le Groupe Mile High Madison, Inc., and Clinique Nordique, Inc. and their principals, Vittorio DiCriscio and Vito Proietti, from making any claims about the health benefits of their products unless they are true and supported by scientific evidence. The order also would impose a judgment of more than $38.1 million, which is partially suspended due to inability to pay, after the defendants pay $1.3 million.
  • A Canadian company, Tapplock, Inc., has settled FTC allegations that it deceived consumers by falsely claiming that its Internet-connected smart locks were designed to be "unbreakable" and that it took reasonable steps to secure the data it collected from users. Tapplock sells fingerprint-enabled, Internet-connected padlocks, and has touted in its advertisements that its smart locks were "Bold. Sturdy. Secure.," according to the FTC's complaint. The settlement requires Tapplock to, among other things, implement a comprehensive security program and obtain independent biennial assessments of the program. The company's smart locks interact with a companion mobile app that allows users to lock and unlock their locks when they are within Bluetooth range and collects personal information including the precise location of users' smart locks. The FTC alleged that contrary to its representations to consumers, the company's locks were not secure and that Tapplock failed to take reasonable precautions or follow industry best practices to protect the consumer data it collected.
  • The FTC has charged a Rhode Island-based company and its owner with falsely claiming to be an approved lender for a federal coronavirus relief lending program and asked a federal court to immediately halt their misrepresentations. The FTC's complaint alleges that Ponte Investments, LLC, also doing business as SBA Loan Program and SBA Loan Program.com, and its owner John C. Ponte, have been falsely claiming an affiliation with the U.S. Small Business Administration (SBA) and marketing themselves to small businesses as an approved lender under SBA's Paycheck Protection Program (PPP). The PPP is a program authorized as part of the CARES Act.
  • The FTC announced it has sent 10 additional letters warning companies, both in the United States and abroad, to cease making unsubstantiated claims that their products can treat or prevent coronavirus disease. While some letters challenge products sold online, others challenge purported treatments offered in clinics or even at a consumer's home. The FTC sent the letters to the following companies: 1) Bioenergy Wellness Miami, 2) Face Vital LLC, 3) LightAir International AB, 4) MedQuick Labs LLC, 5) New Performance Nutrition, 6) PuraTHRIVE LLC, 7) Resurgence Medical Spa, LLC, 8) Rocky Mountain IV Medics, 9) Suki Distribution Pte. Ltd., and 10) Vita Activate.
  • Online fashion retailer Fashion Nova will pay $9.3 million in refunds to settle FTC charges that it violated the Mail, Internet, Or Telephone Order Merchandise Rule when it didn't properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner, and that it illegally used gift cards to compensate consumers for unshipped merchandise instead of providing refunds.
  • The FTC announced the launch of two new interactive dashboards detailing consumer reports about international fraud and scams. One of the new interactive dashboards provides data on cross-border complaints submitted by consumers to econsumer.gov, a site created in 2001 by members of the International Consumer Protection and Enforcement Network (ICPEN) to gather and share consumer complaints about international scams. The dashboard is updated quarterly, and includes information on the top consumer complaints, total reported losses, the top locations for fraud, and the top locations for consumer victims.

Department of Justice:

  • Christopher Parris, a 39-year-old Atlanta, Georgia resident, was arrested and charged in federal court in the District of Columbia with fraud for attempting to sell millions of nonexistent respirator masks to the Department of Veterans Affairs in exchange for large upfront payments, the Justice Department announced. The criminal complaint alleges that Parris made a series of fraudulent misrepresentations in an attempt to secure orders from the Department of Veterans Affairs for 125 million face masks and other personal protective equipment (PPE) that would have totaled over $750 million.
  • A federal court in Utah has entered an injunction halting the sale of a fraudulent COVID-19 treatment, the Department announced. A temporary restraining order was entered against defendants Gordon Pedersen of Cedar Hills, Utah, and his companies, My Doctor Suggests LLC and GP Silver LLC based on evidence that the defendants are fraudulently promoting and selling various silver products for the treatment and prevention of COVID-19.
  • A federal court entered a permanent injunction halting a purported "ozone therapy" center in Dallas, Texas, from offering unproven treatments for COVID-19. The defendants agreed to be bound by a permanent injunction barring them from representing that ozone could be used to treat or cure COVID-19.
  • U.S. Attorney Craig Carpenito, New Jersey Attorney General Gurbir S. Grewal, and New Jersey Acting State Comptroller Kevin D. Walsh announced the formation of a joint federal-state task force to investigate and prosecute a wide range of misconduct arising from the COVID-19 pandemic, including the unlawful hoarding of medical supplies, price gouging, charity scams, procurement fraud, insurance fraud, phishing schemes, and false and misleading investment opportunities.
  • The United States District Court for the Southern District of Florida has entered a temporary injunction halting the sale of an unapproved, unproven, and potentially dangerous COVID-19 treatment product, the Department announced. The Department alleged that the defendants, Genesis II Church of Health and Healing and its principals, Mark Grenon, Joseph Grenon, Jordan Grenon, and Jonathan Grenon sell and distribute a product called Miracle Mineral Solution, also referred to as MMS. MMS is a chemical product which, when combined with the included activator, creates a powerful bleach product that the defendants market for oral ingestion. The FDA has previously issued public warnings to consumers that MMS can cause nausea, vomiting, diarrhea, and symptoms of severe dehydration.
  • Federal authorities announced that an ongoing cooperative effort between law enforcement and a number of private-sector companies, including multiple Internet domain providers and registrars, has disrupted hundreds of Internet domains used to exploit the COVID-19 pandemic to commit fraud and other crimes including ones involving phony cures, bogus charities and distribution of malware.
  • The Departments of Justice and Health and Human Services announced the distribution of hoarded PPE, including approximately 192,000 N95 respirator masks, to those on the frontline of the COVID-19 response in New York and New Jersey. The FBI discovered the supplies during an enforcement operation by the Department of Justice's COVID-19 Hoarding and Price Gouging Task Force and alerted HHS which used its authority under the Defense Production Act to order that the supplies be immediately furnished to the United States. In addition to the N95 respirator masks, the supplies found included 598,000 medical grade gloves and 130,000 surgical masks, procedure masks, N100 masks, surgical gowns, disinfectant towels, particulate filters, bottles of hand sanitizer, and bottles of spray disinfectant.
  • Pentax Medical Company will pay $43 million to resolve criminal charges based on the company's shipment of four types of endoscopes for 18 months without FDA-cleared instructions for use and the company's failure to file timely reports of two infections associated with its endoscopes, the Department announced. As a result of the conduct outlined in the criminal complaint, Pentax has agreed to pay a $40 million criminal fine and to forfeit $3 million.
  • The Department announced that the Madoff Victim Fund (MVF) began its fifth distribution of approximately $378.5 million in funds forfeited to the U.S. Government in connection with the Bernard L. Madoff Investment Securities LLC fraud scheme, bringing the total distributed to over $2.7 billion to nearly 38,000 victims worldwide.

Securities and Exchange Commission:

  • The Securities and Exchange Commission (SEC) obtained a final judgment against Christian concert promoter Jeffrey E. Wall, of Maine, and his business, The Lighthouse Events LLC. The Commission charged Wall and Lighthouse in April 2019 with operating a community-based financial fraud related to Christian music concerts and festivals. Wall and Lighthouse used investor funds for a variety of other expenses, including payment of Lighthouse's existing debt and payments to earlier investors. The court issued an injunction and ordered Wall and Lighthouse to pay, jointly and severally, $1,589,815 in disgorgement of ill-gotten gains plus $202,056 in prejudgment interest thereon, and individual civil penalties of $1,589,815 against Wall and $1,589,815 against Lighthouse.
  • The SEC announced charges against Praxsyn Corp. and its CEO for allegedly issuing false and misleading press releases claiming the company was able to acquire and supply large quantities of N95 or similar masks to protect wearers from the COVID-19 virus. The SEC previously issued an order on March 25 temporarily suspending trading in the securities of Praxsyn.

In other federal news:

  • The FBI is providing this industry alert to warn government and health care industry buyers of rapidly emerging fraud trends related to procurement of PPE, medical equipment such as ventilators, and other supplies or equipment in short supply during the current COVID-19 pandemic. The FBI is aware of multiple incidents in which state government agencies, attempting to procure such equipment, wire transferred funds to fraudulent brokers and sellers in advance of receiving the items. The brokers and sellers included both domestic and foreign entities.
  • The Federal Communications Commission (FCC) issued a Notice of Proposed Rulemaking aimed at better protecting Americans from one-ring scam calls. One-ring scam calls occur when a call placed to a consumer's phone rings just once, using international toll-generating numbers that charge large fees per minute when consumers call back. The FCC's proposal is the latest step to address this problem; it follows a consumer alert the agency issued in May 2019 and implements one section of the recently passed Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (TRACED Act).
  • The U.S. Food and Drug Administration and FTC issued warning letters to three sellers of fraudulent COVID-19 products, as part of the FDA's effort to protect both people and pets. The first seller warned, Herbs of Kedem, sells unapproved and misbranded herbal products for the prevention and treatment of COVID-19. The second seller warned, the GBS dba Alpha Arogya India Pvt Ltd, offers unapproved and misbranded ayurvedic products including "Alpha 11" and "Alpha 21" for sale in the U.S. with misleading claims about the prevention or treatment of COVID-19.The third seller warned, Gaia Arise Farms Apothecary, offers unapproved and misbranded products including "True Viral Defense" also referred to as "Viral Defense Tincture." The company makes misleading claims the products are safe and/or effective for the treatment or prevention of COVID-19 in people.
  • The U.S. Treasury Inspector General for Tax Administration (TIGTA) announced the creation of a web page and reporting form for coronavirus relief payment scams. TIGTA also urged eligible Economic Impact Payment recipients, financial institutions, and other Federal, State, and local law enforcement partners to report suspected fraud relating to the CARES Act to TIGTA immediately at TIGTA.gov.

Attorney General Consumer Protection News and Other Items of Interest

Editor's Note: Attorneys General from across the country have issued numerous consumer warnings, alerts, and guidance for avoiding COVID-19 related scams. Attorneys General have also issued cease and desist letters and engaged with private industry urging action to halt price gouging on important consumer goods and safety equipment. Space does not permit inclusion of a summary of each such release in the Consumer Protection Monthly, however a representative sample of such releases is provided in the news items below. Each such release is available on consumerresources.org, which is maintained by the NAGTRI Center for Consumer Protection.

Texas Attorney General Ken Paxton and Minnesota Attorney General Keith Ellison led 40 attorneys general in an amicus brief filed with the United States Supreme Court in support of decisions by the Supreme Courts of Montana and Minnesota. The brief argues that those state supreme courts correctly ruled in favor of allowing individuals to file personal injury lawsuits in the states in which they reside and were injured, regardless of where the defendant was located. The cases arose from lawsuits that residents of Montana and Minnesota brought against Ford Motor Company alleging that its defective vehicles caused serious crashes in the residents' home states. Ford sought to have each case dismissed, arguing that the state courts lacked jurisdiction because the vehicles were purchased in other states. The supreme courts of Montana and Minnesota both affirmed that courts in the plaintiffs' home states have jurisdiction in these types of cases, and Ford appealed.

Led by Iowa Attorney General Tom Miller and California Attorney General Xavier Becerra, a bipartisan coalition of 35 attorneys general recommended actions to help homeowners in letters sent to the Federal Housing Finance Agency and the Department of Housing and Urban Development. The coalition applauded federal efforts to suspend evictions and foreclosures and expressed appreciation for additional forbearance and foreclosure relief provided by the CARES Act. The letter recommends that the agencies should issue guidance revising their forbearance programs so that forborne payments are automatically placed at the end of the loan's term; that they should expand eligibility for disaster relief loss mitigation programs; and clarify that the moratorium on foreclosures and evictions applies to all aspects of the foreclosure or eviction process.

California Attorney General Xavier Becerra and North Carolina Attorney General Josh Stein led a coalition of 22 attorneys general in sending a letter to the U.S. Department of Health and Human Services and its Centers for Medicare & Medicaid Services, urging them to reconsider their decision to deny a special enrollment period on HealthCare.Gov during the current worldwide pandemic. In the letter, the attorneys general point out that as a result of the COVID-19 pandemic, millions of individuals have lost their jobs, and with their jobs, their ability to pay for healthcare. Many people may be prevented from obtaining treatment because they lack healthcare coverage or face financial ruin if they seek care.

Led by Pennsylvania Attorney General Josh Shapiro,a coalition of 23 Attorneys General wrote the CFPB demanding that it enforce the CARES Act and require credit reporting agencies to follow the Fair Credit Reporting Act during the COVID-19 crisis. The letter stated that the CFPB's recent announcement that it would not enforce the law would leave consumers at the mercy of unresponsive credit agencies at a critical time.

Led by New York Attorney General Letitia James, a bipartisan group of 25 attorneys general sent a letter to Treasury Secretary Steven Mnuchin, calling on the U.S. Department of the Treasury to take immediate action to ensure billions of dollars in emergency stimulus payments authorized by the CARES Act go to American families and not debt collectors. Unlike other government programs, the CARES Act does not explicitly designate the emergency stimulus payments as exempt from garnishment from creditors. Attorney General James and the coalition are asking the agency to protect CARES Act funds, like other government relief programs, and ensure funds go where they were originally intended.

Led by District of Columbia Attorney General Karl Racine, a bipartisan group of 23 attorneys general sent a letter calling on the FTC to enhance consumer protections around funeral home services. In a comment letter about the Funeral Industry Practices Rule, the Attorneys General warn that insufficient pricing transparency in the funeral industry inhibits consumers from accurate comparison shopping and exposes them to being overcharged. The coalition recommends funeral service providers be required to publicize prices online, standardize pricing disclosures, and safeguard consumer funeral funds from misuse and fraud.

Led by Virginia Attorney General Mark R. Herring, a coalition of 20 attorneys general sent a letter urging 3M to do more to combat inflated prices of N95 respirators and other desperately needed personal PPE. As detailed in the letter, there has been a critical shortage of PPE across the country and distributors have been taking advantage of the situation to charge higher than normal prices for N95 face masks and other PPE. The coalition highlights that, while 3M has committed to maintaining prices for N95 respirators, distributors and others in the marketplace have been charging unconscionable prices. The letter included the following specific requests: 1) Continue to publish policies prohibiting price gouging by its distributors and cease doing business with those distributors who violate them; 2) Create a database of 3M's inventory of N95 respirators for government officials and healthcare providers; and 3) Make transparent how inventory is being distributed and how orders are being filled.

Led by New York Attorney General Letitia James and Pennsylvania Attorney General Josh Shapiro, a group of 22 attorneys general warned the nation's three consumer reporting agencies that they will not hesitate to enforce safeguards set in place to ensure consumers' credit is properly protected and that their credit reports are fairly and accurately reported as Americans continue to struggle from the economic fallout of the COVID-19 public health crisis.

Alaska Attorney General Kevin G. Clarkson announced a law suit against Juan Lyle Aune alleging that Aune profited from the spread of COVID-19 by purchasing thousands of N95 respirators from Alaska stores, and then reselling the respirators on Amazon and eBay for unconscionably high prices.

Arizona Attorney General Mark Brnovich issued a cease-and-desist notice to Phoenix-based YiLo Superstore Dispensary to stop YiLo from advertising products as a treatment or cure for COVID-19. According to information received by the Attorney General's Office, text messages have been circulating offering for sale a "Corona Immunization Stabilizer Tincture," in connection with YiLo. General Brnovich also issued a consumer advisory concerning work-from-home and classroom cybersecurity.

Arkansas Attorney General Leslie Rutledge issued a consumer alert about the risks of virtual meetings and tips for consumers to protect themselves while meeting online.

California Attorney General Xavier Becerra issued an alert and tips reminding consumers of their data privacy rights amidst the COVID-19 public health emergency.

Colorado Attorney General Phil Weiser announced that Colorado has secured relief options with many private student loan servicers to expand on the protections the federal government granted to federal student loan borrowers. The federal CARES Act provides much needed relief for many borrowers with student loans, including the suspension of monthly payments, interest, and involuntary collection activity until Sept. 30, 2020. However, the CARES Act left out millions of student loan borrowers with federal loans that are not owned by the U.S. government as well as loans made by private lenders.

Connecticut Attorney General William Tong warned consumers to beware of pyramid schemes proliferating during the COVID-19 crisis and issued guidance about cybersecurity during the pandemic.

Florida Attorney General Ashley Moody's Consumer Protection Division announced the issuance of 65 investigative subpoenas regarding price gouging and a consumer alert about threats from hackers when consumers are working at home. General Moody also issued and an alert warning consumers to not give scammers personal information while gaming online.

Indiana Attorney General Attorney General Curtis Hill announced that Indiana will receive $19.5 million under a settlement reached with Equifax following Indiana's lawsuit against the company over its massive 2017 data breach. Indiana was one of two states that opted not to participate in a multistate settlement in July 2019, choosing instead to file its own lawsuit and ultimately negotiate its own settlement. General Hill also obtained $100,000 total in restitution from four Indianapolis-based used-car dealerships. Circle City Auto Exchange, Inc., Circle City Auto Connection Inc., Circle City Sales & Service Inc., and Empire Auto Group Limited, who were accused of selling more than 200 used motor vehicles without obtaining the proper title brands required after the dealerships purchased the vehicles at salvage auctions after major accidents.

Iowa Attorney General Tom Miller has sued Michael Evan Noteboom of Orange City, Iowa for alleged price gouging, accusing him of charging excessive prices on more than 250 items on eBay, including toilet paper, paper towels and disinfecting and sanitizing products. The lawsuit seeks a temporary and permanent injunction to stop Noteboom from selling household merchandise on any platform as well as consumer restitution or disgorgement and civil penalties.

Maryland Attorney General Brian Frosh issued a consumer alert with tips to avoid coronavirus stimulus payment scams.

Massachusetts Attorney General Maura Healy announced that Equifax has agreed to pay $18.2 million and undertake significant injunctive relief following a massive data breach in 2017 that compromised the personal information of nearly three million Massachusetts residents. The consent judgment resolves the AG's 2017 lawsuit alleging that Equifax failed to patch a known vulnerability in its network, allowing hackers to infiltrate its systems and access the sensitive personal information of least 147 million consumers nationwide.

Michigan Attorney General Dana Nessel issued a consumer warning about video conferencing hijacking and threats to cybersecurity as consumers are increasing usage of video-teleconferencing due to the COVID-19 outbreak.

Minnesota Attorney General Keith Ellison announced that his office has settled an investigation into potential price gouging conduct by Howard Lake-based egg producer Forsman Farms. Under the terms of an Assurance of Discontinuance filed with the Ramsey County District Court, Forsman Farms agrees to limit its prices to no more than 20 percent over pre-emergency prices, and to abide by existing contracts if they dictate a price lower than this ceiling.

Nebraska Attorney General Doug Peterson warned the public about unsubstantiated claims in COVID-19 testing, specifically, that those offering antibody (or serological) tests for COVID-19 are overstating the efficacy of the tests. Peterson also announced that his office is sending warning letters to healthcare providers and other businesses making deceptive or scientifically unsupported claims about their ability to test for the disease. General Peterson also alerted creditors, debt collectors, and financial institutions that Nebraska law may exempt CARES Act stimulus checks from attachment, garnishment or execution for certain low-income consumers.

Nevada Attorney General Aaron Ford and U.S. Attorney Nicholas A. Trutanich announced the formation of the Nevada COVID-19 Task Force. The Task Force includes local, state and federal investigators and prosecutors with significant experience in handling complaints and cases related to general fraud, heath care fraud, Medicaid fraud, insurance fraud, workers' compensation fraud and cybercrime, among others. General Ford also warned Nevadans to be on the lookout for fake job opportunities advertised online or on flyers as fraudsters take advantage of more people searching for work.

New Jersey Attorney General Gurbir S. Grewal announced that the New Jersey Division of Consumer Affairs has issued approximately 514 cease-and-desist letters and 89 subpoenas. The documents were sent to businesses reported by consumers to have engaged in price gouging or other consumer protection violations related to the COVID-19 pandemic.

New York Attorney General Letitia James issued official guidance to New York State banking institutions, creditors, and debt collectors, making clear that financial relief provided through stimulus payments are exempt from garnishment under New York law. General James also ordered Finest Herbalist, a company specializing in the sale of Cannabidiol, to immediately cease and desist the marketing of their product Pure Herbal Total Defense Immunity Blend as a means of curing or treating COVID-19.

Ohio Attorney General Dave Yost announced a lawsuit against an individual from northeast Ohio and his co-conspirators for hoarding N95 respirator masks and selling them online for nearly 18 times the retail price.

Texas Attorney General Ken Paxton filed a lawsuit against LeadGen Sales and Marketing for initiating deceptive robocalls that violate the Texas No Call Act, the Texas Deceptive Trade Practices Act, and fraudulently describes their purported health insurance for COVID-19 testing and treatment as "Trump Care health plans." General Paxton also filed a lawsuit against Cal-Maine Foods, Inc., alleging the dominant egg supplier in Texas has taken unfair advantage of the Governor's COVID-19 disaster declaration and raised the price of eggs by approximately 300 percent without any supply issues or significant disruptions. General Paxton also partnered with the FTC to warn Resurgence Medical Spa LLC that baselessly claiming that their vitamin C intravenous infusions can prevent and cure COVID-19 is a direct violation of the Texas Deceptive Trade Practices Act and federal consumer protection law.

Utah Attorney General Sean Reyes offered consumers tips for online meeting safety, urging the importance of digital security and privacy as Utahns telework, do schoolwork and engage with friends and family using online meeting software.

Vermont Attorney General T.J. Donovan announced a lawsuit and motion for preliminary injunction to stop a price gouging scheme involving surgical masks. The State of Vermont alleges Big Brother Security Programs, whose primary business is to own and operate public and private transportation, and its owner Shelley Palmer of Williston, Vermont, imported surgical masks that cost 10 cents each and re-sold them to Central Vermont Medical Center for $2.50 each, for at least a 500 percent mark-up.

Washington Attorney General Bob Ferguson filed a lawsuit against JRK Residential Group Inc. for violating the Governor's Emergency "Evictions" Proclamation which establishes a temporary moratorium on evictions for the inability to pay rent. The proclamation specifically prohibits landlords from issuing Notices to "Pay or Vacate" during the proclamation's effective period.

The U.S. Supreme Court denied a petition for writ of certiorari from a student who had sued the U.S. Department of Education for violations of the Fair Credit Reporting Act, letting stand a 4th Circuit decision that federal sovereign immunity shielded the department from liability related to the petitioner's allegations of unfair treatment regarding an allegedly fraudulent student loan in the student's name.

The American Bar Association has published a model "Standstill Tolling Agreement" for businesses affected by the pandemic to negotiate issues including defaults in performance and payments with the stated goal to provide a balanced "freeze" until the economic situation stabilizes. Per the authors: "In substance, the model agreement identifies 'standstill issues' and stipulates a 'standstill period' during which the party owed the salient performance agrees not to seek certain remedies, and the party owing the salient performance agrees that it will not undertake a range of non-ordinary course acts that may ultimately harm the other party. It contemplates that certain obligations, e.g., for partial payments or provision of some goods or services, may continue during the standstill period. It provides suggested remedies in the event that either party breaches."

The U.S. District Court for the District of Colorado held that Dish Network was not entitled to insurance coverage to defend or indemnify it in the Do Not Call enforcement action filed by the United States, California, Illinois, North Carolina and Ohio in federal court in which the governments were awarded $280 million in penalties.

The U.S. District Court for the District of Maryland held in a Memorandum Opinion that a putative class of small business owners were not entitled to a Temporary Restraining Order against Bank of America for alleged violations of the CARES Act. The Court held that the Act did not provide a private right of action and that Bank of America's eligibility requirements did not run afoul of the Act.

Charities

Kentucky Attorney General Daniel Cameron warned Kentuckians of new charity and Medicaid scams related to COVID-19 and shared best practices to avoid the financial loss associated with these scams.

Missouri Attorney General Eric Schmitt issued a consumer alert urging Missourians to exercise caution before donating to charities aiding in coronavirus outreach.

Ohio Attorney General Dave Yost filed a lawsuit against a charity and its founder for alleged misuse of charitable funds. Making Healthy Relationships (MHR) worked to provide health education in schools in Franklin County. According to the complaint, evidence uncovered during an investigation by the Ohio Attorney General's Charitable Law Section suggests that Smith misused or misappropriated MHR's charitable funds and assets. From 2012 to 2017, Smith allegedly spent $135,254 in charitable funds for the benefit of himself and his wife.

Wisconsin Attorney General Josh Kaul and Department of Financial Institutions Secretary Kathy Blumenfeld issued an announcement encouraging consumers to exercise caution when donating to a charity and to report suspected charity scams.

Legislation

District of Columbia Attorney General Karl A. Racine announced that the Office of the Attorney General (OAG) will begin enforcing an additional slate of emergency protections for District residents in the "COVID-19 Response Supplemental Emergency and Temporary Amendment Act of 2020," passed unanimously by the Council of the District of Columbia. The bill authorizes OAG to enforce prohibitions on utility disconnections and new consumer protections around debt collection and funeral services, and to obtain maximum penalties and relief for each discriminatory action that violates the District's Human Rights Act. The bill also allows the creation of electronic wills and grants non-violent, low-level arrestees more time to report to a police station during the public health crisis.

Veterans and Military News

Led by California Attorney General Xavier Becerra, a coalition of 22 attorneys general submitted a letter urging the U.S. Department of Veterans Affairs (VA) to suspend benefits claims deadlines and debt collection activities during the COVID-19 pandemic. In the letter, the coalition argues that the VA's continued enforcement of deadlines and collections is putting veterans in financial danger and increasing their risk of losing essential VA benefits that they rely on for basic necessities, such as food and housing.

Upcoming Events

Due to the Coronavirus pandemic, NAAG has canceled the Consumer Protection Spring Conference in Raleigh that was supposed to take place this month. The meeting will not be rescheduled. NAAG's goal is to reschedule the conference in Raleigh for the Spring 2021 conference. We look forward to the NAAG Consumer Protection Fall Conference which is scheduled for October 26-28, 2020, in Washington, DC and have great hope that schedules will resume to normal by that time. Furthermore, all in-person NAGTRI trainings are cancelled through July 31.

Todd Leatherman, Program Counsel for the Center for Consumer Protection, is the editor of Center for Consumer Protection Monthly, a compendium of information that may be of interest to the attorney general community and others interested in consumer protection. Neither the National Association of Attorneys General (NAAG) nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of the matters, nor as to the position expounded by the authors of the hyperlinked materials. Any use and/or copies of this newsletter in whole or part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material presented in this publication. For content submissions or to contact the editor directly, please email tleatherman@naag.org or call 202-326-6044.

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