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Center for Consumer Protection Monthly November 2019

Consumer Chief of the Month: Chuck Harder

From 1989 through 2016, I represented public utilities in rate, regulatory, and legislative matters before public utility commissions in nine states (AR, CO, LA, MN, MS, NE, OK, TX, and WY) and the Federal Energy Regulatory Commission. Before joining the Office of Arkansas Attorney General Leslie Rutledge, I served as the Vice President of Regulatory and Government Affairs for SourceGas LLC in Golden, Colorado, and I held legal and regulatory leadership positions over the course of 25 years at CenterPoint Energy, Inc. which is headquartered in Houston, Texas.

General Rutledge gave me the opportunity to join her staff in April 2016. I began in the Office's ratepayer advocate division. In May 2017, General Rutledge asked me to lead the Public Protection Division. The Division protects Arkansas consumers and the legitimate business community from deceptive trade practices, unfair business practices, and excessive utility rates or charges; mediates disputes between consumers and businesses; and educates the public regarding consumer issues.

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Article of the Month: 

Public Service Loan Forgiveness: States Deal with Sky-High Denial Rates 

Joseph M. Sanders, Assistant Attorney General, Illinois Attorney General's Office

The Public Service Loan Forgiveness (PSLF) program was enacted by Congress in 2007 to discharge federal student loans for borrowers who devoted ten years of their careers to public service. The first borrowers became eligible for discharge in October of 2017, and the problems with administration of the program quickly became apparent.

Application approval rates for PSLF loans are approximately one percent and the federal government has been unable to improve those rates since the beginning of the discharge period. States are taking action to address the problem in a number of ways. State attorneys general have sued servicers for a variety of unlawful conduct that affects program eligibility. New state laws on student loan servicing have created new avenues for action. State banking regulators now have servicer oversight and new student loan ombuds are spearheading outreach initiatives to educate borrowers on the program.

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Scam Alert:  

Social Media Gift Exchnage May Be a Scam





Federal Consumer Protection News

Consumer Financial Protection Bureau:

  • The CFPB issued a report with state-by-state comparisons of financial well-being scores. The scores are based on CFPB analysis of the Financial Industry Regulatory Authority Foundation's 2018 National Financial Capability Study. The report shows that the average financial well-being scores for all adults (ages 18 and older) in the United States ranged from a low of 50 in Mississippi to a high of 54 in California, the District of Columbia and Hawaii. For the United States, the average financial well-being score was 52. The highest possible score is 100.
  • The CFPB issued an interpretive rule clarifying screening and training requirements for financial institutions which employ loan originators with temporary authority. The rule took effect on November 24, 2019.

Federal Trade Commission:

  • AT&T Mobility, LLC will pay $60 million to settle litigation with the FTC over allegations that the wireless provider misled millions of its smartphone customers by charging them for "unlimited" data plans while reducing their data speeds.
  • The FTC obtained a temporary restraining order halting an operation, Arete Financial Group, that allegedly bilked consumers out of millions of dollars by pretending to be affiliated with the U.S. Department of Education and falsely promising student loan debt relief.
  • InfoTrax Systems, L.C., a Utah-based technology company, has agreed to implement a comprehensive data security program to settle FTC allegations that the company failed to put in place reasonable security safeguards, which allowed a hacker to access the personal information of a million consumers.
  • The FTC has released the results of a comprehensive survey conducted in 2017 that examined the prevalence of mass-market consumer fraud, how it is perpetrated, and what factors are associated with a greater likelihood that a consumer may fall victim to fraud. The FTC conducted similar surveys in 2003, 2005, and 2011.
  • The FTC sued a Nevada data storage services company, RagingWire Data Centers, Inc., over allegations that the company misled consumers about its participation in the EU-US Privacy Shield framework and failed to adhere to the program's requirements before allowing its certification to lapse.
  • The FTC and the Utah Division of Consumer Protection sued Nudge, LLC and affiliated companies, alleging that they make empty promises about earning money by "flipping" houses, to convince consumers to buy real estate training packages that cost thousands of dollars. In a filing, the FTC and the Utah Division of Consumer Protection requested that a court prohibit Nudge and its affiliates from selling the packages.
  • The FTC has released a new publication for online influencers that lays out the agency's rules of the road for when and how influencers must disclose sponsorships to their followers.
  • The FTC will host a public workshop on January 28, 2020, to examine voice cloning technologies which enable users to make near-perfect reproductions of a real person's voice.
  • The FTC sued the multi-level marketer Neora, LLC, formerly known as Nerium International, LLC, and its Chief Executive Officer, Jeffrey Olson, alleging that the company operates as an illegal pyramid scheme and falsely promises recruits they will achieve financial independence if they join the scheme.

Securities and Exchange Commission:

  • The SEC's Division of Enforcement issued its annual report for fiscal year 2019. The report details the division's efforts and initiatives on behalf of investors, highlights several significant actions, and presents the activities of the division from both a qualitative and quantitative perspective.
  • The SEC announced an award to three individuals who jointly submitted a tip alerting the agency to a well-concealed fraud targeting retail investors.
  • The SEC announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze against two individuals and two companies they control in connection with an alleged $6 million Ponzi scheme that defrauded at least 55 investors, many of whom are senior citizens or small business owners.
  • The SEC announced that it has filed an emergency action and obtained an asset freeze against the operators of a South Florida-based investment scheme that defrauded over 100 retail investors, many of whom are seniors.

In other federal news:

  • The Social Security Administration announced the launch of a dedicated online form at to receive reports from the public of Social Security-related scams. These scams, in which fraudulent callers mislead victims into making cash or gift card payments to avoid arrest for purported Social Security number problems, skyrocketed over the past year to become the #1 type of fraud reported to the Federal Trade Commission and the Social Security Administration.
  • The U.S. Department of Justice announced that six Nevada area residents were charged with running a fraudulent mass-mailing scheme that tricked hundreds of thousands of consumers into paying more than $10 million in fees for falsely promised cash prizes.
  • The U.S. Department of Justice announced that two Massachusetts men were arrested and charged in U.S. District Court in Boston with conducting an extensive scheme to take over victims' social media accounts and steal their cryptocurrency using techniques such as "SIM swapping," computer hacking, and other methods.

Attorney General Consumer Protection News and Other Items of Interest

Arkansas Attorney General Leslie Rutledge announced a lawsuit alleging multiple Arkansas Deceptive Trade Practice Act violations against Scott Stewart and his company Slabtown Customs. Consumers reported to the attorney general's office that Stewart demanded large deposits for custom-built homes and then failed to complete the work or refund the payments.

California Attorney General Xavier Becerra, Los Angeles District Attorney Jackie Lacey and the County of Los Angeles announced a lawsuit against San Francisco-based electronic cigarette maker, JUUL, Labs, Inc (JUUL). The lawsuit alleges that, contrary to the company's claims that its product is aimed only at adults, JUUL targeted young people through advertising and failed to give warnings about the product's chemical exposure and risks for cancer, birth defects, and reproductive harm. It also alleges that JUUL unlawfully failed to verify the age of California consumers and then violated the privacy rights of minors by keeping the personal email addresses of underage individuals who failed age verification on their website and using those email addresses to send them marketing materials.

District of Columbia Attorney General Karl A. Racine announced a lawsuit against JUUL Labs, Inc., a major e-cigarette manufacturer, and its original parent company, for allegedly purposely marketing nicotine products to teenagers and misleading consumers about their highly-addictive quality.

Florida Attorney General Ashley Moody released a guide for safer holiday shopping. This year's guide contains information and tips on secure online shopping, charity-related scams, item recalls and more. The 2019 Holiday Consumer Protection Guide is also available in Spanish.

Georgia Attorney General Chris Carr warned Georgians about scammers operating under the veil of potential employers.

Indiana Attorney General Curtis Hill has prevailed in a case against two individuals who operated a home-improvement company in Hamilton County that scammed money from 63 Hoosiers, including 33 senior citizens.

Kentucky Attorney General Andy Beshear announced that his office has shut down a fraudulent telemarketing operation that promised U.S. consumers it could recover money lost from investment fraud for a non-refundable "research fee."

Louisiana Attorney General Jeff Landry encouraged consumers to be mindful of several children's products that have recently been recalled.

Maryland Attorney General Brian E. Frosh's Consumer Protection Division warned consumers of a "lottery" mail scam targeting Marylanders.

Massachusetts Attorney General Maura Healey announced that a used car dealership based in Framingham and its owner have agreed to a $925,000 judgment that includes restitution to consumers to resolve allegations that the business engaged in unfair and deceptive sales practices that violated Massachusetts consumer protection law.

Michigan Attorney General Dana Nessel warned Michiganders about scammers posing as public health officials to steal personal information.

Missouri Attorney General Eric Schmitt issued a consumer alert regarding scammers impersonating the International Monetary Fund to obtain money and personal identifying information.

New York Attorney General Letitia James announced a lawsuit against the electronic cigarette company JUUL Labs, Inc. for allegedly deceptive and misleading marketing of its e-cigarettes, which contributed to the ongoing youth vaping epidemic in New York State.

Texas Attorney General Ken Paxton warned Texans about reported scam callers falsely claiming to be members of the OAG's Crime Victim Services Division and attempting to obtain personal and financial information from members of the public.

Virginia Attorney General Mark R. Herring filed suit against opioid manufacturer Teva Pharmaceuticals, USA, Inc. and its predecessor, Cephalon, Inc. for engaging in what he alleges is an unlawful, complex, decades-long campaign to boost sales of fentanyl, the most potent narcotic currently approved for human use, by marketing its rapid acting fentanyl drugs for unapproved and unsafe uses, and by knowingly and intentionally downplaying the risks of its drugs while overselling the benefits.

Washington Attorney General Bob Ferguson urged consumers to be on the lookout for websites posing as the state's health insurance marketplace.

West Virginia Attorney General Patrick Morrisey filed suit against two major opioid painkiller manufacturers. The lawsuits allege Endo Health Solutions Inc., Mallinckrodt LLC and various subsidiaries contributed to the opioid crisis by individually engaging in strategic campaigns to deceive prescribers and misrepresent the risks and benefits of opioid painkillers.

AT&T, Sprint, T-Mobile, and Verizon all have free solutions to stop robocalls.

BBB has archived its studies on scams including fake check, free trial, online romance, tech support, and others.


As a result of Washington Attorney General Bob Ferguson's consumer protection lawsuit, a King County Superior Court judge ruled that from 2009 to the present, for-profit Value Village deceived consumers into believing the company is a nonprofit or a charity and that purchases benefited charities, when they do not. The judge ruled that Value Village knew or should have known its advertising was deceptive. In other Washington news, Attorney General Ferguson announced a lawsuit against non-profit organization Veterans Independent Enterprises of Washington (VIEW) and its operations manager, Rosemary Hibbler. Ferguson asserts Hibbler spent hundreds of thousands of dollars of the organization's money for personal gain, including ATM withdrawals at casinos and her own personal bills. Meanwhile, VIEW failed to pay for repairs to veteran housing, wages to its veteran employees, and, at one point, laid off its entire staff and asked them to "volunteer" their labor.


Four members from both parties of the Senate Commerce, Science, and Transportation Committee have introduced the Harvesting American Cybersecurity Knowledge through Education Act, a bill to expand the country's cybersecurity workforce.

Four senators filed a bill that would strengthen the FTC's enforcement powers over tech companies as they relate to digital privacy.

House and Senate lawmakers announced they have reached an agreement on an anti-robocall bill with hopes that it will be signed by the president.

Veterans and Military News

Forty-four attorneys general urged Congress to further support veterans by passing the Veteran Treatment Court Coordination Act of 2019. House Resolution 886 would establish a Veteran Treatment Court Program in the United States Department of Justice to provide grants and technical assistance to state, local and tribal courts that implement Veteran Treatment Courts.

Florida Attorney General Ashley Moody announced a new partnership to bolster ongoing efforts to protect Florida veterans and service members. The partnership between the Florida Attorney General's Military and Veteran Assistance Program and Bay Area Legal Services' Florida Veterans Legal Helpline will allow for a more rapid response to fraud, identity theft and other legal issues confronting current and former military members.

West Virginia Attorney General Patrick Morrisey urged consumers to exercise caution when giving charitable donations to military veteran charities.

The CFPB announced settlements with Edmiston Marketing, LLC, also called Easy Military Travel, its principal, Brandon Edmiston, and USA Service Finance, LLC (USASF). Easy Military Travel, which was located in Murray, Kentucky and is no longer operating, offered and extended financing for airline tickets to military servicemembers and their families and was owned and managed by Edmiston. USASF, which is located in Mayfield, Kentucky, is a company that services travel-related loans, including loans made by Easy Military Travel, for servicemembers. The CFPB found that Easy Military Travel and Edmiston misrepresented the true cost of credit in violation of the Consumer Financial Protection Act of 2010. The CFPB found that USASF, which serviced travel loans made by Easy Military Travel, engaged in deceptive practices in violation of the CFPA by overcharging servicemembers and their families for a debt-cancellation product for loans financing airline tickets made by Easy Military Travel and purchased and serviced by USASF.

The FTC found that veterans experience a higher rate of financial loss to fraud compared to the general public.

Upcoming Events

2020 NAGTRI Consumer Protection 101 Training

February 11-13, 2020, Miami, Florida

This training will provide basic information about consumer protection cases. Participants will learn about federal and state consumer protection laws and important case law, the beginnings of a consumer protection case, pre-litigation discovery, enforcement actions, multistate investigations and working groups, the anatomy of a consumer settlement, and ethics in regard to undercover investigations.

This course is open to assistant attorneys general with fewer than 3 years of experience working on consumer protection cases. The deadline to submit a nomination is Tuesday, December 10, 2019.

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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