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Center for Consumer Protection Monthly May 2019

Consumer Chief of the Month: Betsy DeNardi, Indiana

It's fitting for Indiana to be highlighted in the month of May, as we are the home of the Greatest Spectacle in Racing that occurs every memorial day weekend (the Indianapolis 500 for those unfamiliar).

I am the Director and Chief Counsel of the Consumer Protection Division for the Office of the Indiana Attorney General Curtis T. Hill, Jr. I have held that position for a little more than two years, but I have been working for the Office for over 15 years. 

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Article of the Month:

Taking Down Tech Support Scams

Genevieve Bonan, Assistant Attorney General, Consumer Protection Division, Office of the Attorney General of Florida

Bonnie, a retiree in Florida, was going about her day when she received an alarming phone call from someone named Phillip, who said he was from Microsoft. Phillip told her that he detected several hackers in her computer and urgently needed to remotely access the computer to repair the damage. Frightened that her personal information was at risk and trusting that the call was from Microsoft, she followed Phillip's instructions and gave him access to her computer. Phillip pulled up various windows and said he found 46,000 potential hackers trying to get into her computer. For only $299.00, Phillip offered to install security software and provide certified tech support for Bonnie. There was a discount if Bonnie was a senior citizen, which she is.

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Scam Alert:  

Avoid Crowdfunding Scams




Federal Consumer Protection News

Consumer Financial Protection Bureau:

  • The 9th Circuit ruled that the CFPB's structure is constitutional.
  • The CFPB filed a lawsuit in the federal district court in the Eastern District of New York against Forster & Garbus, LLP, a New York debt-collection law firm. The CFPB's complaint alleges that Forster & Garbus violated the Fair Debt Collection Practices Act by representing to consumers that attorneys were meaningfully involved in its lawsuits when, in fact, attorneys were not meaningfully involved in preparing or filing them. The CFPB's complaint also alleges that Forster & Garbus violated the Consumer Financial Protection Act's prohibition against deceptive acts and practices by making such representations to consumers through its lawsuits.
  • The CFPB issued a Notice of Proposed Rulemaking (NPRM) to implement the Fair Debt Collection Practices Act (FDCPA). The proposal would provide consumers with clear protections against harassment by debt collectors and straightforward options to address or dispute debts. Among other things, the NPRM would set clear, bright-line limits on the number of calls debt collectors may place to reach consumers on a weekly basis; clarify how collectors may communicate lawfully using newer technologies, such as voicemails, emails and text messages, that have developed since the FDCPA's passage in 1977; and require collectors to provide additional information to consumers to help them identify debts and respond to collection attempts.
  • The CFPB filed a complaint against PGX Holdings Inc. and subsidiaries Progrexion Marketing Inc., Progrexion Teleservices Inc., eFolks LLC, and Inc.; and against John C. Heath, Attorney at Law PLLC, which does business as Lexington Law. The lawsuit alleges the defendants violated the Telemarketing Sales Rule by requesting and receiving payment of prohibited upfront fees for their credit repair services.
  • The CFPB announced a settlement with Conduent Education Services, LLC (CES), a student loan servicing company that formerly operated under the name of ACS Education Services. CES is in the process of winding down its business.
  • The CFPB issued a Notice of Proposed Rulemaking (NPRM), which proposes to raise the coverage thresholds for collecting and reporting data about closed-end mortgage loans and open-end lines of credit under the Home Mortgage Disclosure Act (HMDA) rules. The NPRM would provide relief to smaller lenders from HMDA's data reporting requirements and would clarify partial exemptions from certain HMDA requirements that Congress added in the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA). The CFPB also issued an Advance Notice of Proposed Rulemaking (ANPR) seeking information on the costs and benefits of reporting certain data points under HMDA.

Federal Communications Commission:

  • FCC Chairman Ajit Pai expects major phone companies to implement SHAKEN/STIR caller ID authentication standards this year, and he will host a summit on July 11, 2019 to examine industry's progress toward meeting this deadline. The summit will also identify any challenges to deployment of the SHAKEN/STIR framework and discuss how best to overcome them.
  • FCC Chairman Ajit Pai has circulated a declaratory ruling that, if adopted, would allow phone companies to block unwanted calls to their customers by default without waiting for customers opt in to call blocking services. In addition, companies could allow consumers to block calls not on their own contact list. The accompanying draft Further Notice of Proposed Rulemaking would propose a safe harbor for providers that implement network-wide blocking of calls that fail caller authentication under the SHAKEN/STIR framework once it is implemented.
  • The FCC warned consumers of a "one ring" phone scam.
  • AT&T, Sprint, T Mobile, and Verizon tell FCC Commissioner Rosenworcel they have stopped selling location data.

Federal Trade Commission:

  • The Federal Trade Commission announced the agenda for the 14th session of its Hearings Initiative. This session, at Creighton University in Omaha, Nebraska on June 12, 2019, will conclude the FTC's Hearings on Competition and Consumer Protection in the 21st Century. Representatives from state attorney general offices will be testifying.
  • The ringleader of a California-based student loan debt relief scheme has agreed to settle the FTC's charges that he bilked $11 million from consumers who were trying to reduce their student loan monthly payments or get loan forgiveness.
  • The FTC has approved publication of a Federal Register notice announcing the rescission of several model forms and disclosures under the Fair Credit Reporting Act.
  • Payment processor Allied Wallet, its CEO and owner Ahmad Khawaja, and two other officers, Mohammad Diab and Amy Rountree, have agreed to settle FTC charges that they assisted numerous scams by knowingly processing fraudulent transactions to consumers' accounts.
  • Following a public comment period, the FTC has approved a final order settling charges that San Francisco-based UrthBox, Inc. and its principal misrepresented that customer reviews were independent when, in fact, the company provided those customers with free products and other incentives to post positive reviews online.
  • At the FTC's request, a U.S. district court in Florida granted summary judgment against two individuals, approved six settlement agreements involving 11 defendants, and entered a default judgment against the remaining seven defendants, officially ending the massive Pointbreak Media robocall scheme.
  • The FTC has issued three separate proposed administrative complaints and orders enforcing the Consumer Review Fairness Act (CRFA), which prohibits businesses from using form contract provisions that bar consumers from writing or posting negative reviews online, or threatening them with legal action if they do. These are the first FTC actions exclusively focused on enforcing the CRFA.
  • The FTC has taken legal action against the operator of a deceptive crowdfunding scheme who told consumers he was raising money to develop a high-tech backpack and other products, but failed to deliver any of the products and instead used most of the funds for himself.
  • Three dating apps have been removed from Apple's App Store and Google's Google Play Store following allegations by the FTC that the apps allowed children as young as 12 to access them and appeared to be in violation of the Children's Online Privacy Protection Act (COPPA) and the FTC Act.

Securities and Exchange Commission:

  • The SEC announced settled insider trading charges against a Nevada man who obtained confidential information about a pending corporate merger from a lifelong friend and used it to generate more than $250,000 in illicit trading profits.
  • The SEC announced it has obtained a court order halting an ongoing $30 million Ponzi scheme targeting more than 300 investors in the U.S. and Canada. The SEC complaint unsealed charges South Florida-based Argyle Coin, LLC, a purported cryptocurrency business, and its principal Jose Angel Aman with using investor funds to run a Ponzi scheme.
  • The SEC charged investment adviser Stephen Brandon Anderson with defrauding clients by overcharging advisory fees of at least $367,000.

In other federal news:

  • The Department of Justice announced that, Shaun Sullivan pleaded guilty in New York federal district court to conspiracy to commit mail fraud by sending fraudulent prize-promotion mailings that led recipients, many of whom were elderly and vulnerable, to believe that they could claim large cash prizes in exchange for a modest fee. None of the victims who submitted fees, which in total exceeded $30 million, received a substantial cash prize.
  • The Department of Justice announced that an Ohio man was found guilty for his role in an $7 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

Forty-two state attorneys general support rule changes proposed by the Federal Communications Commission that would allow the commission to combat caller ID "spoofing," a technique used by illegal robocallers to disguise the true origin of their call.

Arizona Attorney General Mark Brnovich warned consumers against moving scams.

Arkansas Attorney General Leslie Rutledge warned consumers in the market for a RV about high pressure sales tactics.

California Attorney General Xavier Becerra announced judgments totaling $1,498,574 in a lawsuit against telemarketers who scammed investors. The company, Consumer Rights Legal Services (CRLS), and four individuals, including CRLS's president and owner, James Davitt, cheated more than 150 victims by offering bogus "investment recovery services" that they claimed would recover money victims had lost from previous investments. Many of the victims were elderly and had already lost hundreds of thousands of dollars from previous schemes.

Connecticut Attorney General William Tong released Connecticut's unredacted complaint against Purdue Pharma, revealing previously undisclosed emails from Purdue's former director Richard Sackler.

District of Columbia Attorney General Karl A. Racine announced an estimated $224,000 judgment in its lawsuit against Xquisite Basements & Kitchens, Inc., a home renovation contractor, and Newton Gaynor, its owner and operator, for providing illegal and incomplete construction work to District consumers and for failing to pay workers.

Florida Attorney General Ashley Moody warned consumers of Social Security scams.

Indiana Attorney General Curtis Hill filed a lawsuit against members of the Sackler family, alleging that as owners and directors of Purdue Pharma, the Sacklers have played a key role in worsening the opioid crisis in Indiana. In other Indiana news, General Hill filed a lawsuit against Equifax seeking civil penalties, consumer restitution, costs and injunctive relief following the finance company's massive 2017 data breach.

Kansas Attorney General Derek Schmidt has sued Purdue Pharma alleging that the drug company engaged in unlawful practices in the marketing of its opioid products including OxyContin.

Iowa Attorney General Tom Miller sued Purdue Pharma and its former president and board chairman, Richard Sackler, alleging that the drug company engaged in unfair, deceptive and unlawful practices in the marketing of OxyContin.

Kentucky Attorney General Andy Beshear has issued a scam alert following a report from a Jefferson County resident who lost $89,000 to a computer virus scam.

Maryland Attorney General Brian E. Frosh announced that Maryland has filed charges against the owners and former directors of Purdue Pharma, alleging that the individuals engaged in a pattern of deceptive conduct that encouraged the inappropriate use of opioids for patients who suffer from common chronic pain conditions.

Massachusetts Attorney General Maura Healey has filed a lawsuit against Eonsmoke LLC, a national retailer of e-cigarette and vaping products that markets its products as "JUUL-compatible," for allegedly violating Massachusetts laws regulating the sale and advertisement of tobacco products.

Michigan Attorney General Dana Nessel warned southeast Michigan residents facing damage from recent flooding to be on the alert for con artists looking to take advantage of victims desperate to quickly repair damage. In other Michigan news, General Nessel announced her office has launched an investigation into the business practices of Life Quest of America and its owner the Zampieri Family Trust, created by John Michael Zampieri III. The for-profit telemarketing company based in the state of Wyoming is alleged of lying to potential customers, claiming it has a blind and disabled workforce, to get consumers to pay excessive prices for common household goods.

Minnesota Attorney General Keith Ellison announced that the State of Minnesota has asked the Hennepin County District Court for permission to amend its lawsuit against opioid manufacturer Purdue Pharma to add eight members of the Sackler family, which owns and operates Purdue, as individual defendants.

Mississippi Attorney General Jim Hood reminded Mississippians who are suffering property damage because of recent flooding to be on alert for fraudulent home repair contractors and other scammers.

Following heavy thunderstorms and tornadoes that swept through the parts of Missouri, Missouri Attorney General Eric Schmitt urged Missourians to watch out for price gouging as they buy supplies and be wary of scams as they look to make repairs.

New Mexico Attorney General Hector Balderas announced a default judgement against an out-of-state non-profit organization that was not complying with state law. This judgement against the "For All Kids" Foundation is the first of its kind in New Mexico, and the first as part of a statewide charity compliance sweep being conducted by the New Mexico Office of the Attorney General.

New York Attorney General Letitia James announced a settlement with the owner of a Westchester pet store that was falsely advertising and claiming that it specialized in the sale of high quality, responsibly-bred animals. The store sold animals that were bred at large-scale commercial "mills."

North Carolina Attorney General Josh Stein filed a lawsuit against JUUL for allegedly designing, marketing, and selling its e-cigarettes to attract young people and for misrepresenting the potency and danger of nicotine in its products in violation of North Carolina's Unfair and Deceptive Trade Practices Act. North Carolina is the first state to take legal action against JUUL.

Ohio Attorney General Dave Yost announced a consumer protection lawsuit against a used car dealership and its owner who failed to deliver vehicle titles to customers in northeast Ohio.

Oklahoma Attorney General Mike Hunter issued a consumer alert after a rash of scam phone calls from Sierra Leone have hit Oklahomans with Tulsa area codes.

Pennsylvania Attorney General Josh Shapiro announced a lawsuit against Purdue Pharma, the creator of prescription painkiller OxyContin, accusing the company of a multi-faceted, illegal effort to market OxyContin in Pennsylvania. Shapiro's suit is the first to specifically detail Purdue's barrage of sales representatives targeting Pennsylvania doctors as a key facet of their campaign to push addictive opioids on Pennsylvanians.

Tennessee Attorney General Herbert H. Slatery III sued Endo Pharmaceuticals and Endo Health Solutions Inc. for allegedly making unlawful and false claims about the safety and benefits of its opioid products.

Texas Attorney General Ken Paxton announced that his Consumer Protection Division settled lawsuits against two Texas gas stations accused of price gouging during the declared disaster for Hurricane Harvey. The attorney general's office also secured Assurances of Voluntary Compliance with four Dallas-Fort Worth Metroplex gas stations.

Vermont Attorney General T.J. Donovan has sued eight members of the Sackler family, owners of Purdue Pharma L.P., makers of the opioid OxyContin, among others. The lawsuit alleges that for over two decades the Sacklers personally oversaw Purdue's deceptive marketing campaign.

West Virginia Attorney General Patrick Morrisey filed suit against Purdue Pharma and former chief executive Richard Sackler alleging their unlawful marketing of opioids helped fuel the substance abuse epidemic, which has caused historic levels of addiction and widespread death. In other West Virginia news, General Morrisey warned state residents of a massive, internationally-based telephone scam with the potential to cost mobile phone users thousands of dollars.

Wisconsin Attorney General Josh Kaul announced the creation of the Public Protection Unit within the Division of Legal Services at the Wisconsin Department of Justice. This unit has been created by merging DOJ's Environmental Protection Unit and Consumer Protection Unit.

BBB issued a new study on the number of counterfeit goods sold online.

Facebook is facing years of government oversight over its privacy policies.


Florida Attorney General Ashley Moody issued a Consumer Alert about crowdsourcing charity scams. These scams often use a disaster or fake personal tragedy story to exploit people's good intentions.

Maryland Attorney General Brian E. Frosh and Secretary of State John C. Wobensmith announced a settlement with CopStress, Inc., a 501(c)(3) tax exempt organization and its founder, Richard A. Willard, a retired Baltimore City Police Officer. Anne Arundel County Circuit Court Judge Ronald A. Silkworth approved the consent order requiring CopStress, Inc. and Willard to cease all charitable soliciting and to turn over remaining donations to an organization whose mission matches charitable solicitations at issue in the case.

Texas Attorney General Ken Paxton announced that the Consumer Protection Division of his office filed a lawsuit seeking a permanent injunction preventing Douglas W. Monahan and his company, iBackPack of Texas, LLC, from participating in deceptive crowdfunding schemes in violation of the state's Deceptive Trade Practices Act.


Forty-Seven attorneys general support an amendment to Section 230 of the Communications Decency Act that would ensure state and local authorities have the power to take action against criminals who are profiting from illegal online activity.

The U.S. Senate passed the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act which would give the federal government more power to fight robocalls. The Act was supported by 54 state and territory attorneys general.

California state lawmakers are consulting with experts to determine how to proceed with the concept of a "data dividend," a payment that the state or its residents would receive from companies who sell users' personal information. Challenges, however, include uncertainty among officials about what the personal data is actually worth.

Colorado Attorney General Phil Weiser joined Governor Jared Polis for the signing of legislation that amends the Colorado Consumer Protection Act (CCPA) and gives the Colorado Attorney General's Office more tools to crack down on scams and unfair business practices. Under the new law, the attorney general would no longer have to demonstrate a company had a specific intent to commit a deceptive business practice that has a significant public impact, but could instead hold bad actors accountable early on so long as their actions recklessly harm consumers. Additionally, the bill adds a "catch-all" provision against any deceptive practice that harms consumers rather than the list of narrowly defined acts and practices the CCPA previously defined as fraud.

The FTC testified before the House Energy and Commerce Subcommittee on Consumer Protection and Commerce about its efforts to effectively protect consumers and promote competition, while anticipating and responding to changes in the marketplace. The testimony urged Congress to enact privacy and data security legislation, enforceable by the FTC, which would grant the agency civil penalty authority, targeted APA rulemaking authority, and jurisdiction over non-profits and common carriers.

Nebraska Governor Pete Ricketts signed LB 6 into law. LB 6 provides for the spouse or legal dependent of a person on active duty military assigned to a permanent duty station in Nebraska to continue to receive in-state tuition from the time of acceptance for admission for as long as the person remains continuously enrolled, even if the military person retires or is re-assigned to a new duty station.

The ABA says that Vermont's new consumer protection law could be a harbinger for tech industry.

Veterans and Military News

Fifty-one attorneys general urged the U.S. Department of Education to automatically forgive the student loans of veterans who became totally and permanently disabled in connection with their military service.

The CFPB significantly expanded its Misadventures in Money Management financial education tool to active-duty servicemembers. Misadventures in Money Management ( was initially developed for future servicemembers who signed a contract to enlist in the armed forces, but had not yet shipped off to basic military training. The CFPB is expanding the program to be available for all servicemembers on active duty, including in the Reserve or the National Guard.

Consumer Protection Trivia

      1. What federal agency was formed by the Dodd - Frank Wall Street Reform and Consumer Protectino Act?
        A. The Consumer Financial Protection Bureau
        B. The Federal Trade Commission
        C. The Securities and Exchange Commission
        D. The Consumer Product Safety Commission

        1. What type of scam involves a perpetrator posing as a potential employer asking a consumer to pay in order to obtain a job?
          A. Grandparents scam
          B. Tech support scam
          C. Employment scam
          D. Home repair scam

          *Trivia answers can be found below.

Trivia Answers

      1. A. The Consumer Financial Protection Bureau
      2. C. Employment scam

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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