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Center for Consumer Protection Monthly May 2018

Consumer Chief of the Month: Sonny Jones, South Carolina

I thank you for the recognition of being selected as May's Consumer Chief of the Month. It is truly an honor to follow the previous Chiefs that were recognized. I joined the Office of the South Carolina Attorney General over 40 years ago and have had the pleasure of working under the leadership of five Attorneys General.

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Article of the Month:

Spotting Government Assessment Scams

Cindy Franklin, Assistant Attorney General - Consumer Protection Unit, Alaska Department of Law

Consumer protection attorneys in attorney general offices nationwide face an increasing array of scams and deceptive marketing ploys aimed at separating consumers from their money. One such scam tries to trick consumers by mimicking government assessments. An effective way to fight against such scams is to identify their common elements and then educate the public.

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Scam Alert:

A Scam Story: Secret Shopping and Fake Checks?

Federal Consumer Protection News

Commodity Futures Trading Commission:

  • The CFTC has approved a proposed rule to reduce regulatory burdens for U.S. market participants, in order to promote economic growth and job creation, by bringing certain CFTC requirements in line with other U.S. regulators and is seeking public comments on the proposal.
  • CFTC Chairman J. Christopher Giancarlo and North American Securities Administrators Association NASAA President Joseph P. Borg signed a mutual cooperation agreement to establish a closer working relationship between the federal commodity regulator and individual state securities agencies.
  • The CFTC filed a civil enforcement action in the U.S. District Court for the Central District of California, Western Division, charging Defendants Jin Choi of Los Angeles, California, and his companies, Apuro Holdings Ltd. d/b/a ApuroFX and JCI Holdings USA d/b/a JCI Trading Group, LLC, with off-exchange retail foreign currency fraud and failure to register with the CFTC as a Commodity Trading Advisor and Associated Person of a Commodity Trading Advisor, as required.

Federal Trade Commission:

  • The FTC has given final approval to a settlement with PayPal, Inc., over allegations that its Venmo peer-to-peer payment service misled consumers about their ability to transfer funds to external bank accounts and control the privacy of their Venmo transactions.
  • As part of ongoing efforts to protect youth from the dangers of nicotine and tobacco products, the FTC and the FDA jointly issued 13 warning letters to manufacturers, distributors, and retailers for selling e-liquids used in e-cigarettes with labeling and/or advertising that resemble kid-friendly food products, such as juice boxes, candies, or cookies, some of them with cartoon-like imagery.
  • The FTC has charged a mortgage relief operation with deceiving distressed homeowners by falsely promising to make their mortgages more affordable and prevent foreclosure. A federal court temporarily halted the scheme and froze the defendants’ assets at the FTC’s request.
  • A New Jersey-based company and its owners have agreed to settle FTC charges that they used deceptive claims to sell purportedly mosquito-repelling perfume sprays and scented candles.
  • The FTC has charged two Utah individuals and their telemarketing operation with deceptively claiming their business coaching services can help consumers start home-based businesses that earn thousands of dollars a month.

Securities and Exchange Commission:

  • The SEC announced it has obtained a court order halting an ongoing fraud involving an initial coin offering that raised as much as $21 million from investors in and outside the U.S.
  • The SEC announced the launch of an additional online search feature that enables investors to research whether the person trying to sell them investments has a judgment or order entered against him or her in an enforcement action. The new tool is intended to assist the public in making informed investment decisions and avoiding financial fraud.
  • The SEC announced settled charges against broker-dealers Chardan Capital Markets LLC and Industrial and Commercial Bank of China Financial Services LLC for failing to report suspicious sales of billions of penny stock shares.

In other federal news:

  • The CFPB warns consumers to guard their Medicare ID card to avoid fraud.
  • The FBI’s Internet Crime Complaint Center (IC3) released the IC3 Annual Report along with state reports.
  • The FCC fined Adrian Abramovich $120 million for malicious spoofing that was part of his massive robocalling operation aimed at selling timeshares and other travel packages.
  • The Department of Justice announced that a federal grand jury returned an indictment against Christopher Lischewski, the President and Chief Executive Officer of Bumble Bee Foods LLC, for participating in a conspiracy to fix prices for packaged seafood sold in the United States.
  • To address youth use of e-cigarettes, the FDA sent official requests for information to four e-cigarette manufacturers requiring them to submit important documents to better understand the youth appeal of these products.
  • The Department of Justice announced that a federal court issued an order to prevent a California individual from preparing, processing, and distributing adulterated fish or fishery products without first taking required remedial action.

Attorney General Consumer Protection News and Other Items of Interest

Arizona Attorney General Mark Brnovich obtained a consent judgment against Compliance Filings Service for allegedly sending government look-alike “Annual Minutes” mailers to Arizona businesses.

Arkansas Attorney General Leslie Rutledge and Treatsie LLC of Little Rock have reached a settlement to resolve allegations that Treatsie continued to sell and advertise subscriptions for their gourmet candy boxes, but failed to deliver hundreds of the boxes, and, in some cases, delivered the orders months late.

Colorado Attorney General Cynthia H. Coffman issued a warning to Colorado consumers to be on the lookout for scammers calling, emailing, or texting and claiming to be officials from Medicare.

Florida Attorney General Pam Bondi filed an action in state court against some of the nation’s largest opioid manufacturers and distributors for their roles in the national opioid crisis.

Georgia Attorney General Chris Carr announced the release of a new resource for Georgians: The Georgia Consumer Protection Guide for Older Adults.

Kansas Attorney General Derek Schmidt announced that a recent filing by Equifax disclosed additional details relating to its massive 2017 data breach.

Maryland Attorney General Brian E. Frosh announced that his Consumer Protection Division and the Commissioner of Financial Regulation entered into settlement agreements with Nationstar Mortgage LLC to resolve allegations that it charged homeowners illegal inspection fees. In other Maryland news, General Frosh announced that his office’s Securities Division has taken an enforcement action as part of an international crackdown on fraudulent Initial Coin Offerings and cryptocurrency-related investment products.

Michigan Attorney General Bill Schuette cautioned Michigan drivers searching for a new vehicle to be on the lookout for flood damaged cars, trucks, and SUVs.

Mississippi Attorney General Jim Hood warns about computer scams that could be used to steal consumers’ personal information.

Missouri Attorney General Josh Hawley obtained a $372,561.04 judgment on behalf of 54 Missouri consumers who were defrauded by Herbert Miller, Kathleen Miller, and Miller Family Funeral Home. The Attorney General’s investigation revealed that Herbert and Kathleen Miller failed to deposit or retain consumer funds in trust accounts or joint accounts as required by their contracts with consumers.

Nebraska Attorney General Doug Peterson provides tips on stopping unwanted robocalls.

Nevada Attorney General Adam Paul Laxalt filed a lawsuit against pharmaceutical company Purdue Pharma L.P. and its affiliates, which manufacture OxyContin and other opioids. The lawsuit alleges that Purdue engaged in deceptive marketing regarding the risks and benefits of prescription opioids, fueling Nevada’s opioid epidemic and leading to the opioid overdose death of Nevadans.

New Jersey Attorney General Gurbir S. Grewal announced a lawsuit against luxury used auto dealership 21st Century Auto Group, Inc., and its owner Dmitry Zeldin, for allegedly violating consumer protection laws and regulations by engaging in a pattern of deceptive practices that include failing to disclose prior damage to used motor vehicles, continuing to advertise motor vehicles after they had been sold in an attempt to “bait-and-switch” customers, and failing to honor advertised and negotiated prices of used motor vehicles.

New Mexico Attorney General Hector Balderas issued a Scam Alert because New Mexicans who use “messenger” services or “apps” to communicate with friends are facing a new criminal hacking scheme.

New York Attorney General Barbara Underwood is preparing a lawsuit against Purdue Pharma for its alleged deception and reckless disregard for the health and wellbeing of New Yorkers.

North Carolina Attorney General Josh Stein filed a lawsuit against drug manufacturer Purdue Pharma over its marketing practices for prescription opioids. The lawsuit alleges that Purdue made deceptive and misleading statements to overcome prescribers’ and patients’ concerns and objections.

North Dakota Attorney General Wayne Stenehjem announced that he has filed a lawsuit against Purdue Pharma, the nation’s leading manufacturer of prescription opioids, for allegedly mispresenting the risk of addiction from prolonged use of opioids.

Ohio Attorney General Mike DeWine filed a consumer protection lawsuit against Discovery Tours, a tour company accused of taking money for services it never provided to families and schools across Ohio.

Pennsylvania Attorney General Josh Shapiro announced restitution for 13 Pennsylvania consumers, including senior citizens, after reaching a settlement with a personal care home that closed unexpectedly and had failed to provide refunds to residents who prepaid for room and board.

Tennessee Attorney General Herbert H. Slatery III, along with a bipartisan group of attorneys general, sued Purdue Pharma for its alleged unlawful marketing and promotion of Oxycontin and other drugs and its role in causing and prolonging the opioid epidemic in Tennessee.

Texas Attorney General Ken Paxton announced that his office filed a consumer protection lawsuit against Purdue Pharma for allegedly violating the Texas Deceptive Trade Practices Act involving the company’s prescription opioids, including OxyContin. In other Texas news, General Paxton’s Consumer Protection Division announced that it secured Assurances of Voluntary Compliance with 37 store owners and wholesale distribution companies to stop selling alleged unlawful and potentially dangerous contact lenses in Texas.

Virginia Attorney General Mark R. Herring announced that he has filed a lawsuit against Service Dogs by Warren Retrievers, Inc., a Virginia-based company that sells purported service dogs to consumers nationwide, and its CEO, Charles D. Warren, Jr., for alleged violations of the Virginia Consumer Protection Act and the Virginia Solicitation of Contributions law.

Washington Attorney General Bob Ferguson filed a consumer protection lawsuit against Kirkland- and Portland-based Real Estate Investment Network, LLC, accusing the company of scamming foreclosed homeowners out of equity in the form of surplus funds from the sale. In other Washington news, General Ferguson announced that Toshiba Corporation, a multinational conglomerate headquartered in Japan, will pay $1.3 million as part of the Attorney General’s price-fixing lawsuit against manufacturers of a component used in television and computer screens called cathode ray tube, or CRT.


New York Attorney General Barbara Underwood announced a settlement resolving an investigation into the Richenthal Foundation, a grant-making organization that focuses on funding not-for-profit theater groups. In other New York news, General Underwood announced a settlement agreement with the Wounded Warriors Foundation of Orange County, Inc., for allegedly illegally collecting thousands of dollars in raffle tickets without ever conducting a raffle.


The Colorado Legislature passed HB 1128 which would require entities maintaining documents that contain personal identifying information to develop a written policy for the destruction or proper disposal of those documents when no longer needed. It also requires those entities to implement and maintain reasonable security procedures and practices.

Utah Attorney General Sean Reyes announced that the Utah Consumer Credit Protection Act will make it easier for Utahns to obtain credit report security freezes.

Vermont Attorney General TJ Donovan applauded Vermont lawmakers for passage of a new law that protects consumers from credit freeze fees, fraudulent acquisition of Vermonters’ data, and establishes a registry and security standards for the “data broker” industry. Vermont is the first state in the nation to successfully pass data broker legislation.

Veterans and Military News

The Department of Justice announced that it has reached a settlement with the Puerto Rico Police Bureau (PRPB) that resolves allegations that the PRPB violated the employment rights of three Puerto Rico Army National Guard Members under the Uniformed Services Employment and Reemployment Rights 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.

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