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 August 2019

Consumer Chief of the Month: Shannon E. Smith, Washington

Greetings from Seattle!  I'm the Division Chief of the Consumer Protection Division of the Washington Attorney General's Office, a position I've held since 2012. 

I joined the Washington Attorney General's Office in 1989, with the goal of working on consumer protection issues. My first position in the office was prosecuting cases before professional licensing disciplinary boards, which was as close to consumer protection that a first-year attorney could get at that time. Following that assignment, I spent 10 years working on utility regulatory issues and handled cases under the federal Telecommunications Act of 1996 and defended the decisions made by Washington's utility commission. Finally, in 2005 I was able to accept an open position in the Consumer Protection Division. Before I became Division Chief, among other things, I handled privacy, data security, and charitable solicitation cases, defended the constitutionality of Washington's law prohibiting commercial robocalls, and oversaw the Division's investigations and litigation.

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Article of the Month:Criminal Prosecution of Consumer Scams and Fraud

Stacy Morey, Chief Assistant Attorney General, Consumer Protection Unit, Oklahoma Attorney General's Office

News stories of widespread consumer fraud and its grave impact on the public are frequently publicized. Historically, state attorneys general have seized numerous opportunities to join forces to stop consumer abuse, investigate scams and fraud, advocate for consumer rights, and provide for greater consumer protection on a national scale. However, occurring even more often than news headlines of national significance are stories of individual consumers being victimized and defrauded by individual con men. 

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Scam Alert:  

One-Ring Phone Scams Costing Victims 





Federal Consumer Protection News

Consumer Financial Protection Bureau:

  • The CFPB released the results of a pilot study, Planning for Tax-Time Savings, launched with the tax preparation company H&R Block that shows that simple messages encouraging customers to use their tax refund to save at tax time increased the likelihood that they would do so.
  • The CFPB announced a settlement with Maxitransfers Corporation, a company that serves consumers looking to send money overseas. This is the CFPB's first enforcement action based on violations of the Remittance Transfer Rule, which implements the Electronic Fund Transfer Act.
  • The CFPB released its fourth biennial report on the state of the credit card market for the period 2017-2018.
  • The CFPB announced a proposed settlement with ITT Educational Services, Inc. to resolve the Bureau's lawsuit, which alleges that ITT engaged in unfair and abusive practices in connection with its private loan program in violation of the Consumer Financial Protection Act of 2010.
  • The CFPB announced that it is extending the comment period on its Notice of Proposed Rulemaking (NPRM) implementing the Fair Debt Collection Practices Act. To facilitate the ability of commenters to consider the issues raised in the NPRM, gather data, and prepare their responses, the comment period will be extended by 30 days to September 18, 2019.
  • The CFPB Ombudsman released its 2019 Mid-Year Update. This year's edition includes responses to queries on information provided to consumers on defendant-administered redress, consumer complaints referred to the CFPB from other agencies, and updates on the Ombudsman Forum and Interactives programs.

Federal Trade Commission:

  • The Chicago-based 7th U.S. Circuit Court of Appeals ruled that the FTC did not have the authority to seek restitution from fraudsters by invoking a section of its governing law that allows it to obtain injunctions. The decision by the 7th Circuit overturns a 1989 decision by the appeals court and conflicts with decisions from eight other circuits.
  • On Sept. 26, 2019, the FTC will hold a half-day public workshop in Washington, DC to consider "Made in USA" and other types of U.S.-origin claims made by domestic and foreign sellers, consumer perception of such claims, the need for any changes to the FTC's existing guidance, and other relevant issues.
  • Thomas Dluca, Eric Pinkston, Louis Gatto, and Scott Chandler, promoters of recruitment-based cryptocurrency schemes, are permanently banned from operating or participating in any multi-level marketing program, as part of a settlement with the FTC.
  • Following a public comment period, the FTC has approved final orders settling charges that five companies violated the Consumer Review Fairness Act by including provisions in form contracts that bar their customers from posting negative reviews. The companies and individuals named in the complaints are: 1) A Waldron HVAC, LLC and its owner, Thomas J. Waldron; 2) National Floors Direct, Inc.; 3) LVTR LLC and its owner, Tomi A. Truax; 4) Shore to Please Vacations LLC; and 5) Staffordshire Property Management, LLC.
  • The FTC obtained a stipulated final order that permanently bans Alliance Security Inc. from telemarketing. The FTC also obtained a preliminary injunction barring Alliance's founder and CEO, Jasit "Jay" Gotra, from telemarketing until the final resolution of the case against him.
  • An email management company, Unrollme Inc., will be required to delete personal information it collected from consumers as part of a settlement with the FTC over allegations that the company deceived some consumers about how it accessed and used their personal emails.

Securities and Exchange Commission:

  • The SEC released a series of short educational videos designed to provide ordinary investors with basic information about choosing and working with a financial professional.
  • The SEC charged 1 Global Capital LLC's former chief financial officer, Alan G. Heide, with defrauding retail investors. The now bankrupt Florida-based cash advance company allegedly fraudulently raised more than $322 million from 3,600 investors between 2014 and last year.

In other federal news:

  • The Federal Communicaions Commission (FCC) announced that CenturyLink agreed to a $550,000 settlement and compliance plan resolving the investigation into company's placement of unauthorized third-party charges and fees onto consumers' bills.
  • The FCC adopted new rules banning malicious caller ID spoofing of text messages and foreign calls. These new rules will close a loophole in the law that prevented the agency from pursuing scammers sending spoofed text messages and international fraudsters making spoofed calls to Americans.
  • The FBI's Internet Crime Complaint Center released a PSA titled "Cyber Actors Use Online Dating Sites to Conduct Confidence/Romance Fraud and Recruit Money Mules."
  • The Department of Justice announced that a telemarketer was sentenced to 63 months in prison followed by three years of supervised release for his role in a $10 million telemarketing scheme that defrauded primarily elderly victims in the United States from call centers in Costa Rica.

Attorney General Consumer Protection News and Other Items of Interest

Fifty-one attorneys general and twelve phone companies reached an agreement that will result in the phone companies adopting eight principles to fight illegal robocalls.

Forty-three attorneys general wrote a letter to the leading streaming services asking to open a dialogue regarding protecting children from content with tobacco imagery.

Thirty-two attorneys general filed an amicus brief in the United States Court of Appeals for the Third Circuit arguing that the case brought by the Commonwealth of Pennsylvania against student loan servicer Navient for exploiting student loan borrowers should be permitted to go forward in the federal courts.

Arkansas Attorney General Leslie Rutledge has filed a consumer protection lawsuit against the Hot Springs-based company Timeless Memories, LLC and its owners, Brittany Brown and Karen Annette Tidwell Monet, for allegedly advertising false, misleading, and deceptive vacation rental properties on popular travel-booking websites.

Connecticut Attorney General William Tong and Consumer Protection Commissioner Michelle H. Seagull have opened an investigation into JUUL Labs, Inc. regarding health claims made by the company.

District of Columbia Attorney General Karl A. Racine filed a lawsuit against a local home contracting company and its father-son management team - Precision Contracting Solutions, LP and Derrick and Stephen Sieber - for deceiving consumers about home construction services and damaging homes across the District. In the complaint, the Office of the Attorney General alleges a pattern of illegal behavior, including misrepresenting the quality of goods and services offered, negotiating contracts under false pretenses, breaking contract terms, and damaging property.

Florida Attorney General Ashley Moody and the Florida Department of Highway Safety and Motor Vehicles are advising consumers to check vehicle history before purchasing a car to guard against odometer fraud. In other Florida news, General Moody issued a Consumer Alert warning Floridians about scammers attempting to steal consumer information using fake Equifax claims webpages.

Georgia Attorney General Chris Carr announced that the Georgia Department of Law's Consumer Protection Division generated more than $109 million for consumers and the State Treasury in fiscal year 2019. In other Georgia news, General Carr warned the public about imposter schemes in which scammers use call spoofing technology to convince consumers to pay money and/or provide their financial or personal identifying information.

Guam Attorney General Leevin Taitano Camacho sued opioid manufacturer Purdue Pharma L.P. and related companies in local court for violating Guam's Deceptive Trade Practices Act. The complaint alleges that Purdue misled prescribers and patients about the safety and efficacy of its opioids to increase the company's profits. The complaint also describes the deceptive marketing campaign and publications financed by Purdue to push its highly addictive opioids while downplaying the dangers of addiction with long-term use.

Idaho Attorney General Lawrence Wasden is renewing his call for Idahoans to be vigilant following an increase in the number of consumers being targeted by the so-called Social Security imposter scam.

Illinois Attorney General Kwame Raoul filed a motion to expand his office's pending lawsuit against Purdue Pharma L.P. and Purdue Pharma Inc. (Purdue) to include the company's owners. Raoul's office sued Purdue this spring over its deceptive marketing practices designed to significantly increase prescriptions issued for opioids.

Indiana Attorney General Curtis Hill alerted Indianans to follow precautions when embarking on home-improvement projects.

Iowa Attorney General Tom Miller has sued the seller of the "Miracle Scraper", which removes ice and snow from car windshields, for allegedly enrolling customers in a buying club without their knowledge or consent and charging them $9.95 a month.

Kentucky Attorney General Andy Beshear announced that approximately 1,400 customers who purchased a vehicle from Auto Plaza USA will receive relief after wrongly being led to believe they had paid all taxes at the time of the sale.

Louisiana Attorney General Jeff Landry is warning Louisiana parents and guardians to take note of several children's products that have been recently recalled this summer.

Maine Attorney General Aaron Frey announced that Ocwen Financial Corporation will refund or credit 24 Maine residents more than $50,000 in attorney's fees they were assessed when their homes were foreclosed upon, and the company will pay $24,000 in civil penalties and $10,000 in investigative costs to the State of Maine, as part of a Consent Agreement signed last week.

Maryland Attorney General Brian E. Frosh issued a consumer alert that scammers are sending fake checks that appear to be from Maryland-based Chesapeake Employers Insurance Company and the Injured Worker's Insurance Fund to unsuspecting victims all over the country.

Massachusetts Attorney General Maura Healey announced that an unlicensed finance company has been permanently banned from selling student loan debt relief services in Massachusetts and will provide $100,000 in restitution and $340,000 in loan relief to more than 600 student borrowers to settle allegations that the company violated state laws. In other Massachusetts news, General Healey announced that an online retailer of socks, Bombas LLC, will pay $85,000 to resolve allegations that it violated consumer protection and data security laws by failing to protect the personal information of 1,361 Massachusetts residents online.

Michigan Attorney General Dana Nessel issued a Notice of Intended Action to Bay City-based Outdoor Adventures, outlining serious concerns with the company's aggressive and misleading sales tactics.

Minnesota Attorney General Keith Ellison's office filed the unredacted complaint against Purdue Pharma and the Sackler family, which allows the public to learn about the Sacklers' words and conduct directly from internal company documents.

Mississippi Attorney General Jim Hood warned of Social Security scam calls and provided a sample of what a scam call sounds like.

New Jersey Attorney General Gurbir S. Grewal and the Division of Consumer Affairs announced that the Division has reached settlements in three separate investigations into alleged consumer fraud in New Jersey's automotive sales industry.

New York Attorney General Letitia James settled with financing company Equitable Acceptance Corporation, resolving charges that it had violated consumer protection laws and unlawfully financed student loan debt relief services.

North Carolina Attorney General Josh Stein obtained $37,000 in consumer relief and a permanent ban against a Hurricane Michael price-gouger. In other North Carolina news, General Stein announced that he filed lawsuits against eight e-cigarette companies: Beard Vape, Direct eLiquid, Electric Lotus, Electric Tobacconist, Eonsmoke, Juice Man, Tinted Brew, and VapeCo. The suits, which are brought under the North Carolina Unfair or Deceptive Trade Practices Act, allege that these companies are aggressively targeting children and do not require appropriate age verification when selling these dangerous and addictive products.

North Dakota Attorney General Wayne Stenehjem reported on scams affecting North Dakota.

Ohio Attorney General Dave Yost sued a wedding photographer in response to complaints from newlywed couples who paid for photos and videos but never received them. In other Ohio news, General Yost is seeking consumer refunds of $105,000 from a central Ohio contractor accused of performing shoddy work and failing to complete home improvement projects.

Oklahoma Attorney General Mike Hunter commended Cleveland County District Judge Thad Balkman for ruling in the state's favor and ordering Johnson & Johnson and its subsidiaries to pay $572 million to abate the ongoing opioid epidemic in Oklahoma.

South Carolina Attorney General Alan Wilson announced that he has filed a lawsuit against major opioid distributors, Cardinal, McKesson, and AmerisourceBergen, for their alleged part in the opioid crisis.

South Dakota Attorney General Jason Ravnsborg, along with the South Dakota Retailers Association, is alerting businesses to be on the lookout for a credit card scam which is impacting the state.

Utah Attorney General Sean D. Reyes announced that scammers impersonating him have contacted victims through Facebook Messenger offering a grant worth thousands of dollars, for a small fee.

Virginia Attorney General Mark R. Herring has secured a default judgment against James R. Clore, Jr., Access Mobility Equipment, LLC, and 2911 Mobility, LLC, for defrauding elderly and disabled consumers out of thousands of dollars they paid for the installation and delivery of mobility aids and equipment.

Washington Attorney General Bob Ferguson announced that Libre by Nexus, an immigration bond services company, will provide more than $2.7 million in debt relief and refund a total of $58,800 to Washington-based consumers. The resolution is a result of an Attorney General's Office investigation into the company's contract practices, which left clients confused about the monthly fees and obligations of Libre's program.

West Virginia Attorney General Patrick Morrisey filed suit against two major manufacturers of opioid painkillers - Johnson & Johnson and Teva Pharmaceuticals. The lawsuit alleges both manufacturers helped fuel the opioid epidemic by individually engaging in strategic campaigns to deceive prescribers and misrepresent the risks and benefits of opioid painkillers.

Wyoming Attorney General Bridget Hill's office filed a lawsuit against Equifax Inc. for allegedly violating the Wyoming Consumer Protection Act. The lawsuit claims Equifax violated the Wyoming Consumer Protection Act by making false and misleading statements to consumers regarding its data protection, failed to adequately inform consumers regarding data protection practices, and failed to take reasonable steps to protect consumer information.

Amazon and Capital One have been sued by consumers for data breaches.

The accused Capital One hacker may have breached more than 30 organizations.

The Consumer Federation of America released its 2018 consumer complaint survey.


Arkansas Attorney General Leslie Rutledge announced a settlement with The New Hope Foundation, Inc. The sham charity solicited donations through telemarketing and direct mail pieces using the deceptive name Hospice Support Fund. The New Hope Foundation claimed to provide educational programs regarding hospice services but little, if any, program services occurred.

Veterans and Military News

Arkansas Attorney General Leslie Rutledge announced the filing of a Stipulated Final Judgement and Order against central Arkansas owner Andrew Gamber; Voyager Financial Group, LLC; BAIC, Inc.; and SoBell Corp. for the brokering of contracts that offer high-interest credit to veterans in exchange for investors illegally acquiring rights to receive future pension payments. The CFPB joined General Rutledge in the investigation and settlement of claims against Voyager.

Connecticut Attorney General William Tong released tips to protect against military romance scams using social media.

Illinois Attorney General Kwame Raoul announced a Cook County judge entered an order prohibiting the Lombard-based charity Veterans Christian Network, Inc. (VCN) and its founders, Todd and Priscilla Olshefski, from engaging in future charitable activities in Illinois. The order resolves a lawsuit Raoul's office filed this spring against VCN and the Olshefskis over violations of Illinois charity laws.

Four attorneys general reached a multistate settlement shutting down a for-profit company that allegedly misled consumers about its support for military service members.

The Department of Justice announced that Nissan Motor Acceptance Corporation has agreed to pay $3 million to resolve allegations that it violated the Servicemembers Civil Relief Act.

The Department of Justice announced that a 14-count indictment has been unsealed in San Antonio, Texas, charging five individuals with coordinating an identity-theft and fraud scheme targeting servicemembers and veterans.

An Illinois-based operator of several post-secondary schools will pay $30 million to settle FTC charges that the operator used sales leads from lead generators that falsely told consumers they were affiliated with the U.S. military, and that used other unlawful tactics to generate leads.

Upcoming Events

2019 NAAG/NASCO Conference
October 16-18, 2019, Nashville, Tennessee

This year's NAAG/NASCO Conference will be held in Nashville, Tennessee at the William R. Snodgrass Tower, located at 312 Rosa L Parks Ave., Nashville, TN 37219, starting the morning of October 16 and ending early afternoon on October 18, 2019. Hotel information can be found here. This conference is the only annual event at which state charity regulators and nonprofit organizations and their attorneys and accountants have the opportunity to meet, hear about, and discuss issues of interest to the charities community. From approximately noon on Thursday and until the end of the conference on Friday, sessions are open to the public and provide an opportunity for representatives of the nonprofit sector to meet and participate in discussions with state regulators. The public sessions aim to address pressing and relevant issues regarding the nonprofit sector. Wednesday and Thursday morning's sessions are for regulators only, providing significant opportunity for charity regulators to discuss the latest topics and learn from each other.

We hope you will be there! Click here for more information.

2019 Fall Consumer Protection Conference
November 5-7, 2019, Omaha, Nebraska

This year's NAAG Consumer Protection Fall Conference will be held in Omaha, Nebraska at the Omaha Marriott Downtown at the Capitol District from Nov. 5-7, 2019. The agenda aims to address pressing and relevant issues specific to your role in consumer protection. On Tuesday, November 5 from approximately noon until 8:00 pm, the private, nonprofit, and government sectors are invited to attend the public portion of the conference, which also includes lunch and an evening reception.

Sessions during the public portion of the conference include an attorney general welcome and comments, as well as sessions on CBD/Hemp Products, Data Security Issues Relating to Lawyers and Law Firms, and Payment Apps. If the Internal Revenue Service releases new settlement rules by conference time, a session is planned on that issue. There will also be an open-mic discussion of private sector issues. The agenda at a glance can be found here. Please note that it is subject to change as we prepare for the conference, and we plan to keep the website updated with current information.

We hope to see you there! Click here for more information.

Blake Bee, 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 or call (202) 326-6263.

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