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 June 2018

Consumer Chief of the Month: JoAnn Gibbs, Nevada

It is an honor to be in the company of the consumer chiefs who have previously been featured in this column. I have enjoyed working with and learning from my consumer protection colleagues, many of whom I now also call my friends.

The Nevada Attorney General's Bureau of Consumer Protection, under the direction of the Consumer Advocate, enforces the Nevada Deceptive Trade Practices Act, antitrust matters under the Nevada Unfair Trade Practices Act, and advocates for consumers in utility rate cases.

Read More>

Article of the Month:

Elder Abuse and Consumer Fraud: Distinctions without Substantive Difference

Andrew Cederdahl, Assistant Attorney General - Consumer Protection Division, Iowa Attorney General's Office

It is wise for assistant attorneys general to become familiar with dynamics of person-to-person elder financial exploitation because such knowledge can assist efforts to protect elder victims of consumer fraud.

Read More>

Scam Alert:

Avoiding World Cup Scams

Federal Consumer Protection News

Commodity Futures Trading Commission:

  • The CFTC issued an order filing and settling charges against Société Générale S.A., for attempted manipulation of and false reporting in connection with the London Interbank Offered Rate (LIBOR) for U.S. Dollar, Yen and Euro, and the Euro Interbank Offered Rate (Euribor), certain instances of manipulation of Yen LIBOR, and aiding and abetting traders at another bank in their attempts to manipulate Euribor.
  • The CFTC announced that Judge Alison P. Nathan of the U.S. District Court for the Southern District of New York entered a Consent Order against Defendant Jamal Y. Vance, finding that Vance committed solicitation fraud in connection with off-exchange foreign currency transactions and failed to register with the CFTC as a Commodity Trading Advisor, as required.
  • The CFTC issued an order filing and settling charges against JPMorgan Chase Bank, N.A. (JPMC) for attempted manipulation of the ISDAFIX benchmark and requiring JPMC to pay a $65 million civil monetary penalty.
  • The CFTC announced that a federal court has ordered Jody Dupont of Anderson, South Carolina, and his company, Open Range Trading LLC, to pay $192,000 for defrauding customers in connection with offering and selling futures trading system.

Federal Trade Commission:

  • The FTC, jointly with the offices of eight state attorneys general, the New York Division of the U.S. Postal Inspection Service, two U.S. Attorneys’ Offices and the Better Business Bureau, announced the results of Operation Main Street: Stopping Small Business Scams, a law enforcement initiative targeting operations seeking to defraud small businesses, and an education outreach effort to help small businesses protect themselves from fraud.
  • The FTC announced that the agency will hold a series of public hearings on whether broad-based changes in the economy, evolving business practices, new technologies, or international developments might require adjustments to competition and consumer protection enforcement law, enforcement priorities, and policy.
  • The FTC announced that a North Carolina debt collection operation, Lombardo, Daniels & Moss, and its principals, Dion Barron and Charles R. Montgomery III, will be banned from the debt collection business under settlements resolving Federal Trade Commission charges that they used false threats to get people to pay for debts they did not owe.
  • The FTC has filed a complaint in federal district court seeking to stop two related operations and their principals who allegedly facilitated billions of illegal robocalls to consumers nationwide, pitching everything from auto warranties to home security systems and supposed debt-relief services.
  • The FTC has charged three individuals and nine businesses with bilking more than $125 million from thousands of consumers with a fraudulent business education program called MOBE (My Online Business Education). A federal court halted the scheme and froze the defendants’ assets at the FTC’s request.

Securities and Exchange Commission:

  • The SEC announced that New York-based investment adviser deVere USA, Inc. has agreed to pay an $8 million civil penalty related to its failure to disclose conflicts of interest to its retail clients.
  • The SEC announced that Merrill Lynch, Pierce, Fenner & Smith Inc. will pay more than $15 million to settle charges that its employees misled customers into overpaying for residential mortgage backed securities.
  • The SEC charged Merrill Lynch, Pierce, Fenner & Smith with misleading customers about how it handled their orders. Merrill Lynch agreed to settle the charges, admit wrongdoing, and pay a $42 million penalty.
  • The SEC announced that Wells Fargo Advisors LLC agreed to settle charges of misconduct in the sale of financial products known as market-linked investments to retail investors.

In other federal news:

  • The CFPB announced a settlement with Security Group Inc., a South Carolina corporation, and its subsidiaries, Security Finance Corporation of Spartanburg and Professional Financial Services Corp. As described in the consent order, the CFPB found that the Security Group entities violated the Consumer Financial Protection Act by making improper in-person and telephonic collection attempts on consumer installment loans and retail sales installment contracts.
  • The FDA announced that it has warned nine online networks, operating a total of 53 websites, that they must stop illegally marketing potentially dangerous, unapproved, and misbranded versions of opioid medications, including tramadol and oxycodone.
  • The Department of Justice announced it has filed a civil complaint to enjoin a California company from distributing hand sanitizer products that are unapproved drugs.
  • The FCC approved new rules to help protect consumers from the illegal and harmful practices of slamming, which is the unauthorized change of a consumer’s preferred telephone company, and cramming, which is the placement of unauthorized charges on a consumer’s phone bill.
  • The Department of Justice announced a significant coordinated effort to disrupt business email compromise schemes that are designed to intercept and hijack wire transfers from business and individuals, including many senior citizens.
  • The Department of Justice announced that a federal district court in Mississippi entered a consent decree of permanent injunction against a Mississippi compounding pharmacy to prevent the distribution of adulterated drugs in violation of federal law.
  • The Department of Justice announced that a Montana man has been sentenced to 36 months in prison for designing fraudulent mail solicitations for use in a transnational elder fraud scheme.

Attorney General Consumer Protection News and Other Items of Interest

Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co., 16-220. The Supreme Court unanimously held that, when interpreting foreign law, “[a] federal court should accord respectful consideration to a foreign government’s submission” on the law’s meaning, “but is not bound to accord conclusive effect to the foreign government’s statements.” It therefore reversed a Second Circuit “ruling that federal courts are ‘bound to defer’ to a foreign government’s construction of its own law, whenever that construction is ‘reasonable.’” In this antitrust action alleging that Chinese manufacturers and exporters of Vitamin C agreed to fix prices and restrain supply, the Second Circuit had deferred to China’s Ministry of Commerce’s submission that Chinese law required the defendants to engage in the contested activities.

Arkansas Attorney General Leslie Rutledge warns Arkansans when purchasing fireworks in anticipation of July 4th.

The Better Business Bureau has released a report on the growing number of scams targeting small businesses.

California Attorney General Xavier Becerra announced that he issued two cease and desist letters and has filed suit against two businesses that make and sell toddler formula, Nutraceutical Corp. and Graceleigh Inc., due to the discovery of dangerously elevated levels of lead in their toddler formulas. In other news, General Becerra announced a settlement with Balboa Student Loan Trust that will provide $67 million in critical debt forgiveness and other much-needed relief for the 34,971 Californians who took out private student loans to attend Corinthian Colleges.

Delaware Attorney General Matt Denn is alerting residents that a phone scam regarding missed jury duty service is again making its way through Delaware.

District of Columbia Attorney General Karl A. Racine announced a lawsuit against Xquisite Basements & Kitchens, Inc. and Newton Gaynor, a contractor and its owner-operator, for illegal or incomplete construction projects and cheating employees out of their pay.

Florida Attorney General Pam Bondi announced that eligible Florida businesses that sent payments to Florida Corporate Filing Services, LLC for certificates of status may now apply for refunds. This settlement fund comes as a result of a consent judgment entered into by the attorney general’s office with Florida Corporate Filings Services, LLC providing for up to $64,000 in consumer restitution. The deadline to request a refund is August 1, 2018.

Georgia Attorney General Chris Carr is warning consumers about scams in which criminals pose as representatives of vacation travel agencies, title companies, or escrow agents to trick timeshare owners into paying up-front fees for timeshare resales that never happen.

Idaho Attorney General Lawrence Wasden has announced a consumer protection settlement with Boise clock repairman Steven J. Hernandez. The settlement requires Hernandez to refund consumers’ money, return their property, and change his business practices.

Iowa Attorney General Tom Miller announced that an Iowa home-repair contractor accused of taking money for jobs he never completed must pay $129,855 and comply with several requirements to continue doing business as part of an agreement with the Iowa Attorney General’s Office.

Kansas Attorney General Derek Schmidt announced that a group of Oklahoma pavers have been permanently banned from doing business in Kansas and ordered to repay more than $40,000 to Kansas consumers after being found in violation of Kansas consumer protection laws.

Kentucky Attorney General Andy Beshear issued a Scam Alert to warn Kentuckians of a new phone scam where con artists claim to be federal Social Security Administration agents calling to notify you that your Social Security number has been stolen.

Massachusetts Attorney General Maura Healey sued Purdue Pharma L.P. and Purdue Pharma Inc., for allegedly misleading prescribers and consumers about the addiction and health risks of their opioids, including OxyContin, to get more people to take these drugs, at higher and more dangerous doses, and for longer periods of time to increase the companies’ profits. In other Massachusetts’ news, General Healey announced that Campus Student Funding, a subsidiary of Oregon-based Aequitas Capital Management Inc., has agreed to discharge $121,000 in private loans and return recent payments from Massachusetts students of Corinthian Colleges Inc., which operated two for-profit schools in Massachusetts under the name Everest Institute.

New Mexico Attorney General Hector Balderas issued a scam alert urging consumers to beware of scammers impersonating elected officials, particularly in online messages.

New York Attorney General Barbara D. Underwood announced a $100 million settlement with Citibank for fraudulent conduct involving U.S. Dollar LIBOR, which is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers. The investigation was conducted by a working group of 42 state attorneys general offices, led by New York. In other New York news, General Underwood announced a joint lawsuit with the FTC to stop the collection and distribution of “phantom debts” that consumers do not actually owe. The complaint alleges that Hylan Asset Management, LLC and its owner Andrew Shaevel, and Worldwide Processing Group, LLC and its owner Frank Ungaro Jr. violated New York state’s fair debt collection statute and laws prohibiting deceptive acts and practices, as well as the FTC Act. It also alleges that certain defendants violated the Fair Debt Collection Practices Act. The lawsuit seeks to permanently stop this illegal conduct and to obtain money to provide refunds to consumers.

Ohio Attorney General Mike DeWine warned consumers to beware of ticket scams when seeking tickets to the NBA Finals, summer concerts, and other in-demand events.

Oklahoma Attorney General Mike Hunter announced an $8.5 million settlement has been reached with Volkswagen and related auto manufacturers from the state’s lawsuit against the automakers for false and deceptive advertising.

Rhode Island Attorney General Peter F. Kilmartin announced that the Office of the Attorney General has filed a civil lawsuit against prescription opioid manufacturers and distributors over their alleged campaign of unfairly, deceptively, and fraudulently marketing and promoting opioids in Rhode Island.

Vermont Attorney General T.J. Donovan has announced a $6.5 million settlement with Volkswagen and related entities Porsche and Audi. The settlement resolves alleged violations of Vermont’s consumer protection laws involving Volkswagen’s false advertising claims about so-called “Clean Diesel” cars and the diesel engine emissions scandal.

Washington Attorney General Bob Ferguson announced that Philips, a multinational electronics company, will pay $7 million as part of the Attorney General’s price-fixing lawsuit against manufacturers of cathode ray tubes, or CRTs, a technology once ubiquitous in television screens and computer monitors.


Nebraska Attorney General Doug Peterson announced the issuance of a report and the filing of a Consent Judgment against Goodwill Industries, Inc. and Goodwill Specialty Services, Inc. (Goodwill Omaha). The Consent Judgment contains a number of remedial actions which Goodwill Omaha will be expected to take to address concerns cited by the Nebraska Attorney General’s Office in an investigation revealing that the Goodwill Omaha Board of Trustees failed to provide effective oversight to the organization.

New York Attorney General Barbara D. Underwood announced the sentencing of Christina Sanford Gordon, who stole more than $200,000 from Buffalo churches, community organizations, and local businesses by misrepresenting herself as a grant writing expert and successful fundraiser.

Vermont Attorney General T.J. Donovan is warning that a fake “GoFundMe” campaign purports to raise money for a child with a rare disease using According to the Vermont Bar Association, the phony campaign referenced its organization and requested that VBA members make contributions.


The California Assembly passed AB 2182, which would require the Department of Consumer Affairs to establish a web portal linked to its Consumer Information Center web page containing links to the personal data privacy policies of online platforms, including social media.

Michigan Attorney General Bill Schuette is reminding Michigan residents that effective June 17th, 2018, free credit freezes became available to all Michigan residents, according to a new state law.

Veterans and Military News

The Department of Justice announced that it has reached a settlement with Syncom Space Services, LLC, that resolves allegations that the company violated the employment rights of Louisiana Air National Guardsman, Jason Cooper, under the Uniformed Services Employment and Reemployment Rights Act.

Wisconsin Attorney General Brad Schimel announced that the Wisconsin Department of Justice, in partnership with the Department of Veterans Affairs Great Lakes Health Care System, is now offering a Dose of Reality to military veterans and active service members on the dangers of misusing opioid and narcotic pain medications.

Consumer Protection Trivia

      1. Which former Supreme Court Justice was a key drafter of the original Federal Trade Commission Act?
        A. Louis D. Brandeis
        B. James Clark McReynolds
        C. George Sutherland
        D. Benjamin N. Cardoza

        1. What federal consumer protection law was passed four months after Upton Sinclair’s novel “The Jungle?”
          A. The Pure Food and Drug Act
          B. The Federal Food, Drug, and Cosmetic Act
          C. The Federal Meat Inspection Act
          D. The Federal Trade Commission Act

          *Trivia answers can be found below.

Consumer Protection Trivia

      1. Louis D. Brandeis
      2. The Pure Food and Drug Act

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.

Faculty Spotlight

NAGTRI's faculty are top-rated experts in their field. Read about them.

Course Schedule

NAGTRI offers high-quality, responsive and innovative trainings.

Research & Newsletters

NAGTRI produces comprehensive research and newsletters on topical legal issues.