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Center for Consumer Protection Monthly July 2018

Consumer Chief of the Month: Kevin Anderson, North Carolina

Thanks for the opportunity to be Consumer Protection Chief of the Month and to share some information regarding the North Carolina Consumer Protection Division. North Carolina has a rich consumer protection division, and I'm proud to have worked in the Division on a wide variety of interesting and important consumer matters in my 20 years in the attorney general's office.

It is a singular pleaseure to be working with Attorney General Josh Stein. I have known and worked with him from the time he was North Carolina's Consumer Protection Director.

Read More>

Article of the Month:

Multistate Settlement and Changes to The Fair Credit Reporting Act Provide Provide Growing Consumer Credit Report Protections

Teresa A. Heffernan, Senior Assistant Attorney General

Melissa Szozda Smith, Senior Assistant Attorney General

On Behalf of the Office of the Ohio Attorney General

Credit reporting, long governed by the Fair Credit Reporting Act (FCRA) and various individual state statutes, and more recently addressed through a Multistate Settlement (Settlement) and amendments to FCRA, has become a more consumer-friendly environment, one that values accuracy and allows for easier access to identity fraud prevention tools.

Read More>

Scam Alert:

U.S. Army Criminal Investigation Command: Beware of romance scams involving persons claiming to be U.S. Soldiers.

Federal Consumer Protection News

Bureau of Consumer Financial Protection:

  • The Bureau of Consumer Financial Protection issued a statement on the implantation of The Economic Growth, Regulatory Relief, and Consumer Protection Act amendments to the Home Mortgage Disclosure Act.
  • The Bureau of Consumer Financial Protection announced a settlement with National Credit Adjusters, LLC, a privately-held company headquartered in Hutchinson, Kansas, and its former CEO and part-owner, Bradley Hochstein.
  • The Bureau of Consumer Financial Protection announced a settlement with Triton Management Group, Inc., a small-dollar lender that operates in Alabama, Mississippi, and South Carolina under several names including “Always Money” and “Quik Pawn Shop.”
  • The Bureau of Consumer Financial Protection filed in federal district court a proposed settlement with TCF National Bank regarding its marketing and sale of overdraft services.

Commodity Futures Trading Commission:

  • The CFTC filed a civil enforcement action in federal court charging defendant Harris Bruce Landgarten of Old Brookville, New York, with defrauding participants in a commodity pool that he operated, the Tradeanedge Members Fund.
  • The CFTC announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action. The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program.
  • The CFTC issued a Customer Advisory warning customers to use caution and do extensive research before purchasing virtual coins or tokens, including those that are self-described as “utility coins” or “consumption coins.”
  • The CFTC announced that a federal court ordered an Estonian foreign exchange dealer to pay over $10 million in sanctions for defrauding U.S. customers.

Federal Communications Commission:

Federal Trade Commission:

  • The FTC and the State of Florida have charged a Florida man and his company with tricking business owners into buying labor law posters by sending mailers that mimic invoices from a government agency or authority.
  • The FTC is mailing 597 checks totaling more than $184,000 to people who were allegedly tricked into paying phony debts.
  • The FTC is warning consumers to watch out for vacation rental scams.
  • A federal district court has granted the FTC’s request to stop a group of San Diego-based Internet marketers from deceptively advertising free trial offers and not only charging consumers full-price for the trial product, but also enrolling them in expensive, ongoing continuity plans without their knowledge or consent.
  • The FTC, working jointly with 12 partner agencies in seven states, conducted the first compliance sweep of car dealerships since the amended Used Car Rule took effect earlier this year.
  • The FTC is mailing checks totaling $19,798,233 to drivers for Uber Technologies Inc., as part of a settlement with the Commission over allegations the ride-hailing company exaggerated the yearly and hourly income drivers could make in certain cities and misled prospective drivers about the terms of its vehicle financing options.

Securities and Exchange Commission:

  • The SEC charged failed Fyre Festival Founder and others in a $27.4 million offering fraud scheme.
  • The SEC charged Mizuho Securities USA LLC for its failure to safeguard information pertaining to stock buybacks by its issuer customers.
  • The SEC announced that Credit Suisse Group AG will pay approximately $30 million to resolve SEC charges that it obtained investment banking business in the Asia-Pacific region by corruptly influencing foreign officials in violation of Foreign Corrupt Practices Act.
  • The SEC announced settlements with two former senior executives of ITT Educational Services Inc., which the SEC charged hid its true financial condition from investors.
  • The SEC filed fraud charges against a second defendant in connection with a scheme to manipulate the price of Fitbit securities through false regulatory filings.

In other federal news:

  • IC3 created a public service announcement titled the "Business E-mail Compromise: The 12 Billion Dollar Scam."
  • Deputy Attorney General Rod Rosenstein announced the establishment of a new task force on Market Integrity and Consumer Fraud. The task force will provide guidance for the investigation and prosecution of cases involving fraud on the government, the financial markets, and consumers.
  • A former CEO of a Tennessee-based telemarketing company has been sentenced to federal prison for his criminal conduct in marketing and misrepresenting health insurance plans.
  • The Department of Justice announced that Todd & Patty Meech Dairy Farm and its co-owners were enjoined from introducing adulterated meat into interstate commerce.
  • The Department of Justice announced that five individuals have been charged for their roles in three separate elder fraud schemes. The schemes collectively defrauded tens of thousands of Americans, many of whom were elderly, out of at least 100 million dollars.
  • The Department of Justice announced that 24 defendants were sentenced for their roles in a multimillion dollar India-based call center scam targeting U.S. victims.
  • The Department of Justice announced that a Virginia man was sentenced for operating an odometer and title fraud scheme that spanned six years and involved more than 50 vehicles.

Attorney General Consumer Protection News and Other Items of Interest

Arizona Attorney General Mark Brnovich is warning Arizonans to be wary of online romance scams after an investigation found Arizona residents tried to wire thousands of dollars overseas. In other Arizona news, General Brnovich warns Arizonans against travel scams.

Arkansas Attorney General Leslie Rutledge announced that online sellers Bonanza and eBay have joined Walmart in banning the online sale of unwashed poppy seeds on their websites as a direct response to Attorney General Rutledge’s July 13 letter requesting their removal.

The BBB released a study on the timeshare/vacation club industry.

There are right ways to delete data, as discussed in this Kennedy-Mighell Report podcast on "How to Delete Data Safely." Dennis Kennedy and Tom Mighell discuss best practices in deleting and destroying data and review what it looks like to effectively get rid of data that is no longer needed.

California Attorney General Xavier Becerra announced that he will be filing a lawsuit against Navient Corporation (Navient) and its subsidiaries, Pioneer and General Revenue Corporation, for misconduct in the servicing and collection of federal student loans. Navient services approximately $300 billion in federal and private student loans held by 12 million borrowers. An estimated 1.5 million Navient borrowers live in California.

Equifax agreed to take corrective actions following the company’s massive 2017 data breach under a consent order with eight state banking commissioners. The order includes requirements that Equifax develop a proper risk assessment, submit a list of all planned projects to the multi-state regulatory agencies and submit written progress reports to them on its progress towards complying with each provision of the order.

The European Union has fined Google $5.1 billion for using its market dominance to encourage device makers to preinstall its apps and services on Android phones and tablets.

Florida Attorney General Pam Bondi filed a court action against Harmony International Tours, LLC and its owners, Bradley R. Matheson and Margaret L. Matheson. According to the complaint, Harmony International and its owners offered group travel packages to college, high school, church choir and band groups scheduled to perform in foreign countries and to participate, in some instances, in cultural exchange programs. After receiving payments from the various music groups, the defendants allegedly failed to provide the travel packages and reimburse consumers as promised. In other Florida news, General Bondi filed a court action against several companies allegedly involved in a student loan debt relief scam.

Georgia Attorney General Chris Carr issued a warning about sweepstakes scams targeting older Georgians. In other Georgia news, General Carr announced indictments in two identity fraud cases.

Kansas Attorney General Derek Schmidt announced that a Kansas roofer has been banned from doing business in Kansas and ordered to repay two consumers after being found in violation of Kansas consumer protection laws.

Illinois Attorney General Lisa Madigan, along with eight other attorneys general, filed comments urging the Food and Drug Administration to ban flavored tobacco products in e-cigarettes, little cigars, and other non-combustible products.

Iowa Attorney General Tom Miller warned Iowans affected by recent flood damage to be wary of consumer scams and shady contractors who tend to solicit victims of natural disasters.

Maryland Attorney General Brian E. Frosh announced that his Consumer Protection Division issued a Final Order finding that Swift Van Lines, LLC, formerly known as Revolution Moving and Storage, LLC, and its owner, Juan Carlos Martinez, repeatedly violated the Consumer Protection Act and the Maryland Household Goods Movers Act, and requiring them to return money to consumers and pay penalties and costs amounting to at least $471,445.45.

Massachusetts Attorney General Maura Healey announced that her office is investigating JUUL Labs, Inc. and other online e-cigarette retailers that sell JUUL and JUUL-compatible products over concerns about the marketing and sale of electronic smoking devices and products to minors.

Michigan Attorney General Bill Schuette announced his Consumer Protection team has released a new consumer alert on “Smishing.” Smishing is when a scammer sends text messages to consumers appearing to be from a trusted source.

Microsoft released a white paper entitled “From Policy to Practice: Strengthening Cybersecurity in State Governments.”

Minnesota Attorney General Lori Swanson filed a lawsuit against Purdue Pharma, L.P., a Connecticut-based pharmaceutical company, seeking to recover money for taxpayers for the increased health care and societal costs incurred as a result of the company’s misrepresentations about the addictive nature and risks of its opioid painkillers.

Mississippi Attorney General Jim Hood filed a lawsuit against Navient Corporation and its subsidiaries, Navient Solutions, LLC, and Sallie Mae Bank, alleging widespread abuses across all aspects of its student loan business, including misleading borrowers about payment options that resulted in higher monthly payments that many could not afford.

New Mexico Attorney General Hector Balderas cautioned New Mexico consumers not to submit their banking information over the internet unless consumers have initiated contact with the bank. In other New Mexico news, General Balderas warned consumers of scammers pretending to be state employees while trying to trick people into handing over their money.

New York Attorney General Barbara D. Underwood announced a settlement with Adventure Resorts of America, LLC, Adirondack Adventure Resorts of Lake George, Inc., and Saratoga Escape Lodges & RV Resort, Inc., concerning the campgrounds’ misleading marketing and sale of campground memberships. In other New York news, General Underwood announced a lawsuit against Rochester-based home improvement contracting business operators Alvis Sprague and Sarah Crawford and their company A-S Contracting for deceptive online advertising and failing to perform the services they promised to consumers.

Ohio Attorney General Mike DeWine announced a consumer protection lawsuit against the operators of Ashley Contractors LLC, a home improvement and construction company accused of failing to deliver promised services to northeast Ohio consumers.

Pennsylvania Attorney General Josh Shapiro sent a letter demanding answers from Temple University President Richard M. Englert about the University’s business and marketing practices in the wake of recent media reports indicating that the Fox School of Business and Management knowingly provided false data to rankings organizations for several years.

Texas Attorney General Ken Paxton announced that his Consumer Protection Division finalized settlements with 48 Texas gas stations accused of price gouging during the state of disaster declared for Hurricane Harvey.

Washington Attorney General Bob Ferguson announced that Facebook signed a legally binding agreement with his office to make significant changes to its advertising platform by removing the ability of third-party advertisers to exclude ethnic and religious minorities, immigrants, LGBTQ individuals, and other protected groups from seeing their ads.

Wyoming Attorney General Peter K. Michael announced a consumer protection settlement with HuddleHQ and eComHQ Inc., online retailers who sold retro game consoles nationwide.


The FTC, along with law enforcement officials and charity regulators from 70 offices in every state, the District of Columbia, American Samoa, Guam, and Puerto Rico, announced more than 100 actions and a consumer education initiative in “Operation Donate with Honor,” a crackdown on fraudulent charities that con consumers by falsely promising their donations will help veterans and servicemembers. NAAG Charities Committee Co-Chairs, Connecticut Attorney General George Jepson and Nebraska Attorney General Doug Peterson, participated in “Operation Donate with Honor,” the nationwide crackdown on fraudulent charities that con consumers by falsely promising their donations will help veterans and servicemembers.

Illinois Attorney General Lisa Madigan filed lawsuits against professional fundraisers based in the Chicago suburbs seeking to ban them from operating in Illinois for alleged numerous violations of the state’s Solicitation for Charity Act.

Michigan Attorney General Bill Schuette filed a cease and desist order and a notice of intended action to file a civil suit against Opus Bono Sacerdotii for violating Michigan’s Nonprofit Corporation Act and Charitable Solicitations Act.


The International Association of Privacy Professionals (IAPP) issued an analysis of the new California Consumer Privacy Act, finding that more than 500,000 businesses may be subject to the new law. The analysis addresses what data is protected, who must comply, and how to comply.

Mississippi Attorney General Jim Hood is urging congressional leadership to vote against HR 3299 (Protecting Consumers’ Access to Credit Act of 2017) and HR 4439 (Modernizing Credit Opportunities Act). Per General Hood, the two bills would invalidate a state’s ability to protect consumers from high interest loans and undermine a state’s ability to enforce consumer protection laws.

Veterans and Military News

Arkansas Attorney General Leslie Rutledge alerted military servicemembers in Arkansas of the protections provided under the Servicemembers Civil Relief Act and higher education options available under the Forever GI Bill.

Florida Attorney General Pam Bondi is recognizing Military Consumer Protection Month with tips for active-duty military, veterans, and their families.

Kentucky Attorney General Andy Beshear is warning veterans and military families to be on the lookout for the most common veteran-specific scams.

North Carolina Attorney General Josh Stein writes on protecting servicemembers from bad actors. In other North Carolina news, General Stein released an updated military consumer guide intended to help military servicemembers and their families as they make consumer decisions and manage finances during active duty and deployments.

The Department of Justice announced that the owner of Eelon Training Academy (Eelon), a privately owned, non-accredited school purporting to specialize in digital media courses, pled guilty to bribing a public official at the U.S. Department of Veterans Affairs in exchange for the public official’s facilitation of payments to Eelon that were supposed to be dedicated to providing vocational training for military veterans with service-connected disabilities.

The Department of Justice reached a settlement agreement with WiFi Alliance, a non-profit organization headquartered in Austin, Texas. The settlement resolved the allegations that WiFi Alliance violated the employment rights of a Lieutenant Colonel Charles O’Donnell under the Uniformed Services Employment and Reemployment Rights Act.

The Department of Justice announced that 3M Company has agreed to pay $9.1 million to resolve allegations that it knowingly sold the dual-ended Combat Arms Earplugs, Version 2 to the United States military without disclosing defects that hampered the effectiveness of the hearing protection device.

Consumer Protection Trivia

      1. Which U.S. President gave a special message to Congress on protecting consumer interests?
        A. Richard Nixon
        B. John F. Kennedy
        C. Ronald Reagan
        D. Lyndon Johnson

        1. Which federal agency did Congress create during the Great Depression to restore investor confidence in the markets by providing investors and the markets with more reliable information and clear rules of honest dealing?
          A. Federal Trade Commission
          B. Commodity Futures Trading Commission
          C. Securities and Exchange Commission
          D. Federal Deposit Insurance Corporation

          *Trivia answers can be found below.

Consumer Protection Trivia

      1. B. John F. Kennedy
      2. C. Securities and Exchange Commission

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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