AGs and Consumer Protection: In the News
Modified "Stormchaser" Bill Wins Iowa Senate Approval (April 11, 2012)
North Carolina AG Opposes Duke Energy Rate Hike (Novemeber 28, 2011)
North Carolina Attorney General Roy Cooper has said he will fight the proposed electricity rate increase requested by Duke Energy. Recently Duke Energy requested an 18.6% increase for residential rates, but lowered that amount to 7.2%. Cooper says this amount is still too high. In a statement Cooper said, "Most working families and businesses would like to be able to have a 7.2 percent increase in income right now. But, in fact, many of them are having to deal with cuts. I think it's important for the company to have to deal with economic realities. Right now is not the time to get this money from consumers.”
West Virginia AG Obtains Judgment Against Modeling Agency for Deceptive Practices (November 21, 2011)
Following charges by West Virginia Attorney General Darrell McGraw that the owner of a modeling agency was conning clients out of money, a county court judge has ordered the business to shut down and bans the owner from opening any modeling agencies in the state. According to McGraw’s suit, the modeling agency owner charged clients thousands of dollars for photo shoots and portfolio building services but failed to follow through on these services. Additionally McGraw alleged that the owner violated consumer protection laws requiring him to warn clients of the right to cancel contracts within three days. In a news release McGraw said, "I caution those with dreams of becoming a model to do their homework before paying an agency upfront for their services.” The judge ordered the owner to pay $5,000 in restitution, as well as $25,000 in penalties.
New Hampshire AG Warns over Possible 'Women’s Expo’ Scam (November 16, 2011)
New Hampshire Attorney General Michael Delaney issued a warning to consumers over an event advertising itself as “For Us Women’s Expo.” According to Delaney, his office was contacted by the Radisson Hotel in Manchester to notify the office that contrary to what the online ads for the Expo said there was no such event scheduled to take place at their establishment in December. The ads were allegedly selling tickets for $6 to $10 and booth space ranging from $565 to $1,000. The New Hampshire Department of Justice is attempting to identify the person or persons behind the ad to investigate.
California AG Subpoenas Mortgage Giants Fannie and Freddie Mac (November 16, 2011)
California Attorney General Kamala Harris’ office has issued subpoenas to mortgage lenders Freddie and Fannie Mac as part of an ongoing investigation into mortgage lending practices in the state. According to an anonymous source, Harris’ subpoena asked the lenders questions regarding their business in California, including acting as landlords for foreclosed properties in the state. Additionally the subpoena allegedly requested information on their mortgage-servicing and foreclosure practices.
Delaware AG Sponsors Foreclosure Prevention Workshops (November 8, 2011)
The Delaware Attorney General’s Office announced that their Mortgage Fraud Task Force is sponsoring free workshops in November on foreclosure prevention. According to the office, the workshops are aimed at providing information that will help residents keep their homes, assist with loan modifications, and generally reduce foreclosures. In a statement Delaware Attorney General Beau Biden said “Our goal is to make sure that homeowners who are seeking ways to meet their mortgage obligations are able to have meaningful conversations with their lenders and avoid being victimized by mortgage rescue scams that strip homeowners of their equity and their home.” The workshops will include mortgage service providers, state employees, and housing counselors.
NJ AG sues Philadelphia Attorney over Alleged Ponzi Scheme (November 6, 2011)
New Jersey Attorney General Paula Dow filed suit against Philadelphia lawyer Michael Kwasnik over allegations he operated a Ponzi scheme that took money from the retirement accounts of elderly investors. According to Dow, Kwasnik told investors that money would be used to promote the business Liberty State Investments when some of the money was actually used to pay returns to other investors. In the lawsuit Dow’s office alleges, "Investor funds were partly used in a Ponzi scheme to pay existing investors and for other improper purposes, including the fraudulent and unjust enrichment of individual defendants and members of their families.” Dow’s suit asks the court to order restitution for investors and permanently bar Kwasnik and other members of the alleged scheme from selling investment securities.
Massachusetts AG Prepares to Sue Mortgage Lenders (October 18, 2011)
Massachusetts Attorney General Martha Coakley is preparing to sue some mortgage lending companies for improper foreclosure procedures. Coakley is investigating allegations of foreclosure improprieties by the lenders, such as threatening homeowners with fees and property seizures despite having granted permanent loan modifications to the owners. In a statement Coakley said, “To the extent that banks are not meeting their obligations, this conduct is inexcusable and my office will work to hold them accountable.” Coakley did not reveal what banks her investigation or potential lawsuit target.
Connecticut AG Reaches Settlement with Major Credit Rating Agencies (October 14, 2011)
Connecticut Attorney General George Jepsen and three major credit rating agencies—Moody’s Investor Service Inc., Standard & Poor’s, and Fitch Inc.—reached a settlement over allegations the agencies misrepresented their ratings. Jepsen’s office filed suit against the agencies after receiving complaints that cities, towns, and school districts in the state were paying higher than necessary interest rates and bought unnecessary bond insurance. The settlement requires the agencies to give a $900,000 credit to the state to be used for future bond ratings and to meet with public bond issuers to explain their rating scales and factors.
Washington AG Warns Consumers on “Smishing” Scams (October 7, 2011)
Washington Attorney General Rob McKenna warned consumers to be cautious of text messages looking for their bank account information in a text message scam known as “smishing”. According to McKenna, people have been receiving text messages claiming to be from a bank but then ask people to hand over their bank account information. In a statement McKenna said, "If you don't wish to be smished, ignore text messages that look like they're coming from your bank or credit card. Flip over your credit or ATM card and call the number on the back. If there's a problem with your account, that's the best way to find out."
Florida AG Settles with Internet Advertiser over “Free” Gifts (October 3, 2011)
Florida Attorney General Pam Bondi has reached an agreement with internet advertiser SubscriberBASE Holdings, Inc. over allegations of deceptive practices. Bondi alleged that SubscriberBASE offered free gifts online but failed to “clearly and conspicuously” disclose the conditions of the offer. SubscriberBASE must pay $800,000 and disclose the proper information in all future free gift ads.
Massachusetts AG Files Complaint with FERC (September 30, 2011)
Massachusetts Attorney General Martha Coakley filed a complaint with the Federal Energy Regulatory Commission alleging that power transmission costs in New England are excessive. Coakley asked FERC to reduce the fees to such an extent that it would lower ratepayers’ bills by $113 million in 2012 and $206 million a year by 2015. In a statement Coakley said, “Electric transmission companies in New England have enjoyed the benefits of higher returns that were set when economic conditions were much better. It is now time for the federal government to set rate at an appropriate level in order to give ratepayers relief.” Coakley’s complaint is also supported by Connecticut Attorney General George Jepsen and other New England state officials.
Rhode Island AG Accuses Two of Mortgage Scam (September 15, 2011)
Rhode Island Attorney General Peter Kilmartin accused two people of failing to provide promised mortgage modification services. According to Kilmartin’s office, David Conti and Lucy Ruiz targeted desperate homeowners in a Hispanic community and promised to help them with loan modifications while charging an upfront fee of $1,000 to $3,000. Some of the homeowners then complained to Kilmartin’s office that Conti and Ruiz never provided any mortgage services nor refunded fees. The two stand accused of violating the state’s Deceptive Trade Practices Act and the Mortgage Foreclosure Consultant Regulation. Kilmartin reminded Rhode Island residents not to pay upfront fees for mortgage modification services and said, “There are legitimate, free services available for homeowners that don’t require thousands of dollars in charges and fees.”
Seven AGs Join USDOJ AT&T Mobile Merger Suit (September 16, 2011)
Seven state AGs—California, Illinois, Massachusetts, New York, Ohio, Pennsylvania, and Washington—have joined with the United States Department of Justice in a lawsuit to block the proposed merger between AT&T and T-Mobile. In a statement about the decision to support the lawsuit New York Attorney General Eric Schneiderman said, “This proposed merger would stifle competition in markets that are crucial to New York’s consumers and businesses, while reducing access to low-cost options and the newest broadband-based technologies.” Eleven other states have publicly endorsed the merger.
Connecticut AG Investigates Gasoline Price Gouging (September 7, 2011)
Connecticut Attorney General George Jepsen is investigating possible instances of gasoline price gouging in the aftermath of Hurricane Irene. Jepsen says his office has received approximately 40 to 50 reports of price gouging involving gasoline. The investigation will focus on the profit margins of those retailers suspected of gasoline price gouging in the 90 days prior to the hurricane in comparison to those 30 days after. In a statement about the investigation Jepsen said, “If a gas station was making 9 cents per gallon profit before Irene, and that became 15 or 16 cents per gallon afterward, that’s gouging. Violators could be subject to fines of thousands of dollars.”
Mississippi AG Wins $38 Million Judgment Against Drug Manufacturer (September 6, 2011)
A county judge awarded the state of Mississippi more than $38 million dollars as the result of lawsuit filed by Mississippi Attorney General Jim Hood against pharmaceutical manufacturer Sandoz Inc. In the lawsuit, Hood accused Sandoz of inflating the average wholesale prices of drugs, which resulted in inflated reimbursements to pharmacies by the Mississippi Division of Medicaid. In a press release about the judgment Hood said, "Sandoz, with its greed for more profits, caused Mississippi to overpay on drug prescriptions and some of our neediest citizens were being denied health care due to cost overruns.” Under the terms of the judgment, Sandoz must pay the state $23,661,618 in compensation, $11,830,809 in punitive damages, and $2,699,000 in penalties
Montana AG Issues Warning Over Rental Scams (September 3, 2011)
Montana Attorney General Steve Bullock, along with the Billings Police Department, is warning people to beware of rental scams on Craigslist. According to Bullock, scammers are posting false ads on Craigslist for legitimate rental or sale properties. When someone inquires about the ad the scammer says they live out of town and the renter must wire first and last month’s rent plus a security deposit. According to authorities, they agree to send the keys to the prospective renter but then do not. In a statement Bullock said, “Craigslist this week pulled one of these scam ads but Montanans have enough to worry about without wondering if the house they want to rent is really part of an online fraud.”
Attorneys General Question Classified Ads Website Over Adult Listings (August 31, 2011)
The Attorneys General from 45 states have sent a letter to Backpage.com, a classified ads website, over how it handles ads for adult services. According to the letter, the website is a hub for illicit activities such as prostitution and human trafficking. The letter requests the website to provide information backing up its claims that they have policies aimed at preventing sexual exploitation of minors. The Attorneys General argue that the website has been ineffective at controlling solicitation of minors for sex on the site. Washington Attorney General Rob McKenna says, "We're finding lots of evidence that sex trafficking continues to be rampant on their site. Making money from the sexual exploitation of children and adults is unconscionable, and that's what they're doing." McKenna also notes that the letter is more of a moral appeal to the website since the Attorneys General have few legal remedies against the site.
New Jersey AG Alleges Men Scammed Inmates and Their Families (August 30, 2011)
New Jersey Attorney General Paula Dow announced that her office and the Division of Consumer Affairs filed suit against two New Jersey men accused of scamming inmates and their families through a phony organization called the Project Freedom Fund. According to Dow’s office, Bruce Buccolo and disbarred attorney Mark Bendet ran the Project Freedom Fund and charged inmates $350 for legal consultations. Dow’s office received 18 complaints from inmates or their family members who say they never received legal representation, or if they did it was by a non-attorney and a disbarred attorney. Dow’s office alleges the men used the fees collected to pay personal bills rather than provide legal services.
West Virginia AG Warns Consumers Over International Lottery Scams (August 30, 2011)
West Virginia Attorney General Darrell McGraw warned consumers to beware of scam artists offering prizes from international lotteries, particularly if they are unexpected. According to McGraw’s office, these scammers call, mail, or email people telling them they have won a lottery or inherited money from a long lost relative. Often the scammers will tell people the money is tied up in legal battles or otherwise hard to obtain without some upfront money. In a statement McGraw said, "Since we hear of unexpected windfalls from legitimate lotteries, people can be easily convinced an exciting new opportunity is valid when it is not. Unfortunately, the convenience we all enjoy from modern technology is also convenient for thieves—scammers are more convincing when armed with small pieces of personal information about us, right from the Internet.” McGraw warns consumers to not act immediately on such offers, particularly if they include high pressure tactics or emotional pleas, and to never pay fees for a prize that is supposedly free.
Mississippi AG Announces Website to Report Counterfeiting (August 29, 2011)
Mississippi Attorney General Jim hood announced the Mississippi Intellectual Property Crimes Center website concerning counterfeit goods. According to Hood, the website allows the public to report counterfeit goods, as well as recognize counterfeit goods. The website will also have a secure section for law enforcement. Hood notes that it is the first such website for a state attorney general’s office.
Rhode Island AG Warns Retailers Not to Raise Prices (August 26, 2011)
In anticipation of a possible state of emergency over Hurricane Irene, Rhode Island Attorney General Peter Kilmartin warned retailers not to raise their prices and try to profit from the impending hurricane. Kilmartin reminds Rhode Island residents that state law prohibits retail sellers from increasing prices on products right before or during a declared state of emergency. In a statement Kilmartin said, “It is illegal and it is morally wrong for any business to take advantage of such a stressful and dangerous situation solely to line their pockets with additional profits at the expense of citizens whose lives are at risk. I sincerely hope that we as Rhode Islanders will not act that way, but I am prepared to enforce our price gouging statute for the protection of all citizens if any retail seller chooses such an immoral path.” A state of emergency had not yet been declared in Rhode Island. Kilmartin’s office states that any Rhode Island resident who thinks they have been a victim of price gouging prohibited by the law should contact his office’s Consumer Protection Unit.
Connecticut AG Says Gas Price Rule in Effect (August 26, 2011)
Connecticut Attorney General George Jepsen announced that the state’s gasoline pricing rule is in effect until Wednesday August 31 in anticipation of Hurricane Irene. The pricing rule prohibits “unconsciously excessive” prices on fuels such as gasoline while in effect. The Commissioner for the Connecticut Department of Consumer Protection urged people to refrain from rushing out and buying all the fuel they could.
West Virginia AG Settles with Internet Payday Lender (August 24, 2011)
West Virginia Attorney General Darrell McGraw settled with the Government Employees Credit Center, an Internet payday lender, for a total of $300,000 in canceled debts and refunds. The press release from McGraw’s office describes Internet payday loans as short-term loans or cash advances, which usually must be repaid within 14 days or else the borrower will be charged a fee. According to McGraw, the lender charged consumers a 25% fee on the 14 day loans, or a 650% annual interest rate, which would exceed the state maximum interest rate of 18% annually. In addition to mandating restitution, the settlement prohibits the lender from making or collecting internet payday loans in West Virginia.
Rhode Island AG Announces Action Against Contractors (August 20, 2011)
Rhode Island Attorney General Peter Kilmartin announced that the state is taking legal action against six contractors over allegations of substandard work. Kilmartin’s office alleges the contractors also ignored orders from the Rhode Island Contractors’ Registration and Licensing Board to pay restitution and fines associated with the allegations of substandard work and, in some cases, no work. In his announcement Kilmartin states, “It can be devastating to the homeowner when a contractor does shoddy work, or worse, takes the money but does not perform the work.”
Washington AG Settles with Car Dealers Over Ads (August 19, 2011)
Washington Attorney General Rob McKenna settled with eight car dealers over allegations of ads violating the state’s consumer protection laws. According to McKenna, the advertisements violated the act on several grounds, including creating a false sense of urgency, misrepresenting how many vehicles were for sale, and failing to disclose necessary information under the Truth in Lending Act. The various settlements required the car dealers to comply with state law and in some cases pay monetary fines or compensation.
California AG Sues Lawyers for Fraud (August 19, 2011)
California Attorney General Kamala Harris filed a lawsuit against four attorneys and their associates in southern California over alleged fraud, including accusations of false advertising, unfair business practices, and improper fee splitting. According to Harris, the attorneys defrauded homeowners by convincing them to pay thousands of dollars to receive home relief by joining a lawsuit against banks. Harris says homeowners were led to believe they would receive foreclosure stays, reduce the balance of their loan, or even receive monetary benefits. The lawyers are accused of sending out misleading mailers that told borrowers they were potential plaintiffs in a litigation settlement. Harris says that no settlements existed and that there were no lawsuits in some cases. Harris seeks penalties, damages, and restitution.
Connecticut AG Reaches Agreement with Wells Fargo Over Loan Modifications (August 17, 2011)
Connecticut Attorney General George Jepsen reached an agreement with Wells Fargo Bank over alleged deceptive marketing for adjustable rate modification loans and violations of consumer protection laws. According to Jepsen, two corporations acquired by Wells Fargo, Wachovia and Golden West Financial, failed to fully explain to borrowers that minimum payments available for the loans would not cover the accrued interest. Jepsen says that the choice to make minimum payments increased the amount of the loan. In his statement Jepsen says, "I am pleased that Wells Fargo is addressing this issue. Connecticut homeowners struggling with these risky, 'pick-a-payment' loans will have a fair opportunity to achieve a loan modification or other relief." Under the terms of the agreement, Wells Fargo will consider approximately 1,535 Connecticut eligible homeowners for home loan modifications.
Iowa AG Sues Membership Club Over Deceptive Sales Practices (August 17, 2011)
Iowa Attorney General Tom Miller filed suit against Stonebridge Benefits Services Inc. for alleged violations of Iowa’s Consumer Fraud Act. According to Miller, Stonebridge engaged in deceptive and unfair sales tactics by charging monthly fees for unwanted and unused memberships. In Iowa, membership sales transactions have to include certain disclosures, notices, and contracts. Miller’s office investigated Stonebridge after receiving complaints from consumers claiming they were enrolled in and billed for memberships without their permission.
New York AG Announces Settlement with Finance Company (August 16, 2011)
New York Attorney General Eric Schneiderman announced a $3.5 million settlement with Rome Financial Co. Inc., a financing company, for allegedly scamming close to 1,000 soldiers in New York state. According to Schneiderman, Rome Financial entered into finance agreements with compound interest of up to 244 percent. Schneiderman says it appeared the company marketed specifically to soldiers. When the soldiers failed to make a payment, Rome Financial would contact their supervisors. In one instance, Schneiderman alleges Rome Financial would not allow a soldier to pay off the item early. Under the terms of the settlement, Rome Financial will also erase all debts owed by soldiers while allowing them to keep the merchandise. Schneiderman says his office and Rome Financial will work together to repair affected solders’ credit.
Missouri AG Obtains Restraining Order Against Telemarketer (August 16, 2011)
Telemarketing company C. Michael Exteriors has been ordered by a court to stop making calls to Missourians on the “no-call” list. Missouri Attorney General Chris Koster announced his office obtained a temporary restraining order against the telemarketer for alleged violation of Missouri no-call laws. According to a suit filed by Koster, the telemarketer attempted to sell siding and windows by phone to customers on the no-call list in violation of the Missouri Merchandising Practices Act and Telemarketing No-Call List Act. In his statement Koster says, "Missourians subscribe to our No-Call List to avoid being harassed by telemarketers. The law is clear, and I want Missouri citizens to know that this office will aggressively enforce the law."
Colorado AG Secures Judgment Against Debt Management Company (August 16, 2011)
Colorado Attorney General John Suthers announced a judgment against Enhanced Servicing Solutions, a debt management company, in the amount of $590,000 for alleged violation of the Colorado Debt Management Services Act. The judgment follows a complaint against Enhanced Servicing for failing to register the company in accordance with state law. Suthers also alleges the company ignored a letter from the state notifying it of the registration requirement and failed to respond to a subpoena. The judgment includes $504,000 in fines, $90,363 in consumer restitution, and an injunction prohibiting further violation of the DMSA or Consumer Protection act. Enhanced Servicing is also prohibited from collecting any payments involving the past agreements violating Colorado law.
Missouri AG Obtains Temporary Restraining Order Against Towing Company (August 16, 2011)
Missouri Attorney General Chris Koster announced that his office secured a temporary restraining order against Northland Tow Service LLC for alleged violations of the Missouri Merchandising Practices Act. According to Koster, Northland towed tornado damaged vehicles and made false representations that it worked with an insurance company. Additionally, Koster alleges it towed some vehicles without the owner’s permission. Under the court order, the company may not conduct business in Joplin, Missouri, as well as two counties, without prior solicitation. The company is also prohibited from towing any vehicles from the area affected by the tornado without court permission and from disposing of towing-related documents.
Rhode Island AG Warns Consumers Over Online Auto Sales (August 16, 2011)
Rhode Island Attorney General Peter Kilmartin issued a warning to consumers to beware possible fraud with online vehicle sale listings. According to Kilmartin, the Internet Crime Complaint Center has received several complaints nationwide involving fraudulent internet auto sales. Kilmartin says that scammers advertise vehicles far below bluebook value to hook buyers, then ask for a full or partial payment to be sent to a third party by wire transfer. The scammer then keeps the money but never hands over the vehicle to the buyer. Additionally, Kilmartin says other signs of a scam may include the seller claiming they have to rush the deal because of a family emergency, they are moving quickly, or they are being deployed by the military. The scammers may also claim the transaction is covered by a reputable protection plan through well-known companies, though the transaction is being conducted outside the company’s site. In his statement Kilmart reminds consumers, "If a deal seems too good to be true, it probably is."
Connecticut AG Settles with Hotel Over Price Fixing (August 11, 2011)
Connecticut Attorney General George Jepsen announced a settlement with two related hotel companies, Metro Ten Hotel LLC and McSam Hotel Group LLC, over allegations of price fixing. Jepsen’s office alleged the two companies shared information not available to the public, which allowed competitors to fix prices for hotel rooms. Under Connecticut antitrust law, it is illegal to fix rates for hotel rooms. In a statement Jepsen said, “This agreement will end an artificially imposed practice that drove up room rates at certain hotels. The settlement will help to restore a competitive marketplace by providing consumers the opportunity to obtain prices for hotel accommodations that were set by the market, not by collusion." The companies must pay $50,000 in civil penalties to Connecticut, as well as stop price fixing at their hotels.
New Jersey AG Sues Pet Dealer for Alleged Consumer Fraud (August 11, 2011)
New Jersey Attorney General Paula Dow filed suit against Allan Levine and his three pet sale businesses for allegedly violating consumer protection and sale of animals laws. According to Dow, Levine violated the New Jersey Consumer Fraud Act and the Regulations Governing the Sale of Animals by selling seriously ill puppies, failing to provide refunds or reimburse consumers for veterinary care, and failing to disclose the puppies’ accurate health information to consumers. Additionally, Dow’s office alleges that Levine attempted to alter one business, Allan Levine Inc, as a charity and attested the payments for puppies were charitable donations. However, Dow says Levine never provided the required financial records for charities and commingled the alleged donations with his personal accounts. Dow acted after her office received nine complaints regarding Levine and his businesses. In the suit, Dow asks for a permanent injunction barring Levine from selling animals in New Jersey, as well as restitution for consumers, civil penalties, and attorneys’ fees.
Maine AG Settles with Debt Company Over Enrollment Fees (August 10, 2011)
Maine Attorney General William Schneider settled with Credit Solutions Inc., a Texas-based debt settlement company, over allegations of unfair trade practices. Schneider alleged that Credit Solutions violated the Maine Unfair Trade Practices Act by collecting upfront fees to negotiate debt settlements. According to Schneider’s office, Credit Solutions promised to eliminate 40 to 60 percent of the consumer’s debt but of the 561 Maine consumers who used the company, only six were able to eliminate 40 percent of their debt. Credit Solutions also reportedly held consumers responsible for the upfront enrollment fee regardless of whether all their debt was settled through the company. The settlement requires Credit Solutions to pay $150,000 for litigation costs and stop accepting advance fees for debt settlement services.
Florida AG Announces $1 Million Settlement with Marketing Company (August 8, 2011)
Florida Attorney General Pam Bondi announced a million-dollar settlement with Encore Marketing International, a Maryland-based company. Bondi’s office alleged Encore violated the state’s Unfair and Deceptive Trade Act by failing to clearly disclose recurring fees when soliciting club memberships. According to Bondi, consumers would make online or telephone purchases and were then offered discounts for joining Encore’s club membership. Encore agreed to pay $1 million in restitution to Florida consumers and $200,000 in attorneys’ fees to Bondi’s office. In a statement Bondi said, "Consumers deserve to have a clear and prominent disclosure of any fees associated with a transaction, and we are committed to protecting Floridians from deceptive practices.”
Washington AG Sues Foreclosure Trustees (August 5, 2011)
Washington Attorney General Rob McKenna is suing ReconTrust Co, a foreclosure trustee and subsidiary of Bank of America, for conducting illegal foreclosures. In the suit McKenna’s office alleged “ReconTrust has failed to comply with the Washington Deed of Trust Act, RCW 61.24, in each and every foreclosure it has conducted since at least June 12, 2008." McKenna alleges ReconTrust violated one essential provision by not having a physical office in Washington. Additionally, ReconTrust is accused of failing to identify the actual owner of promissory notes being foreclosed on, failing its duty of good faith to borrowers, and failing to conduct foreclosures in public places. McKenna is asking the court to mandate ReconTrust comply with Washington law, impose a $2,000 penalty for every violation, and grant restitution for consumers.
New York AG Sues Bank for Fraud, Opposes Settlement (August 4, 2011)
New York Attorney General Eric Schneiderman filed suit against Bank of New York Mellon for alleged fraud while acting as trustee for mortgage loan pools issued by Countrywide. In the lawsuit Schneiderman argues, “Investors in the trusts were misled by Bank of New York Mellon into believing that Bank of New York Mellon would review the loan files for the mortgages securing their investment, and that any deficiencies would be cured.” Schneiderman is also moving to block an agreement between Bank of New York and Bank of America, arguing that Bank of New York breached its duty to investors by agreeing to the deal. In the proposed settlement, Bank of America would pay $8.5 billion to the investors, while the mortgage pool totals $174 billion. A hearing on the proposed settlement is scheduled for Friday.
Colorado AG Warns Consumers About Restitution Recovery Assistance Scams (August 4, 2011)
Colorado Attorney General John Suthers warned consumers to beware of firms offering to recover restitution judgments obtained by Suthers’ office in exchange for upfront fees. Suthers’ warning comes in response to inquiries by consumers who were contacted by RMI Associates. According to the complaints, RMI Associates offered to recover restitution related to a lawsuit between Suthers’ office, the Federal Trade Commission, and Dalbey Education Institute. Suthers’ states the organization has no affiliation with his office or the FTC and Colorado consumers can submit complaints for free through the Attorney General’s website.
Massachusetts AG Obtains $2.4 Million Judgment For Health Plan Fraud (August 3, 2011)
Massachusetts Attorney General Martha Coakley announced a civil judgment of $2.4 million against two companies, Consumer Health Benefit Association and National Benefits Consultants LLC. Coakley’s office sued the companies for alleged fraud by marketing and selling discount health plans as health insurance and as being sufficient to meet the state’s mandatory insurance coverage law. As part of the judgment, the companies are required to pay $586,960.95 in restitution to consumers, $1,780,000 in civil penalties, and $99,000 in attorneys’ fees. The companies are also permanently prohibited from representing a discount health plan or insurance as meeting the state’s mandatory insurance coverage requirements when they do not.
New Jersey AG Cites Loan Modification Firms for Fraud (August 2, 2011)
New Jersey Attorney General Paula Dow and the State Division of Consumer Affairs cited seven mortgage modification firms for fraud. Dow’s office alleges the seven companies violated the state’s Adjustment and Credit Counseling Act and Consumer Fraud Act by offering modification services without debt adjuster licenses. The companies were served with cease and desist notices. Dow is requesting $35,000 in civil penalties, as well as $49,434 in restitution for the 10 consumers who paid fees to the companies. In the press release from her office Dow states, "We do not want homeowners who are already struggling to make mortgage payments victimized by unlicensed persons offering services that they cannot lawfully provide. Unlicensed companies most often make a difficult situation worse for homeowners, and we will continue to go after these firms." The cited companies can contest the citations and request a hearing.
Pennsylvania AG Sues Furniture Stores (August 1, 2011)
Pennsylvania Attorney General Linda Kelly’s office is suing two Philadelphia furniture companies for alleged consumer protection violations. Kelly alleges that the owner of the two stores accepted deposits and payments for furniture that was ultimately not delivered. The owner also allegedly closed the stores without offering refunds to customers who paid for furniture they never received. Kelly also urged any consumers who believed they are entitled to restitution to file a complaint with the Pennsylvania Bureau of Consumer Protection.
Kentucky AG Sues For-Profit College (July 27, 2011)
Kentucky Attorney General Jack Conway announced a lawsuit against Daymar College, a for-profit college, for allegedly violating Kentucky’s Consumer Protection Act. According to Conway’s office, Daymar overcharged students for textbooks, mislead students regarding financial aid, and mislead students on credit transfers. Conway estimates that as many as 5,000 students were affected by Daymar’s alleged actions. The lawsuit seeks up to $2,000 in penalties per violation, as well as restitution for the students. This action is part of a larger investigation by Conway’s office into seven for-profit colleges.
Illinois AG Sues Mortgage “Rescue” Companies (July 27, 2011)
Illinois Attorney General Lisa Madigan filed suit against two companies, Avatar Realty Group Inc. and Skyline Capital, for charging Illinois consumers upfront fees to obtain loan modification assistance. Madigan also sued the presidents of both companies. The suit alleges that the companies collected over $61,000 in fees from 40 consumers to negotiate mortgage modifications but then failed to perform this service. Collecting upfront fees for loan modification assistance before the service is completed is a violation of Illinois law. Madigan’s lawsuit seeks to shut down the companies and get restitution for the fees paid by consumers
Virginia AG Settles with Loan Modification Company (July 25, 2011)
Virginia Attorney General Ken Cuccinelli has announced that his office has reached a settlement with Nationwide Loan Modification Bureau LLC, a mortgage loan modification company. The company allegedly charged its customers illegal advance fees in violation of the Foreclosure Rescue Law, which prohibits a supplier of foreclosure avoidance services from charging a fee prior to the performance of the services. Nationwide also allegedly violated the Virginia Consumer Protection Act by failing to assist consumers in getting mortgage loan modifications, after promising to do so. The settlement granted the state $25,000, and $21,700 restitution for consumers that filed complaints about the advance fees
Blaine Immigration Adviser Responds to State Suit (July 18, 2011)
In response to a lawsuit filed by Washington Attorney General Rob McKenna, an immigration adviser has agreed to pay $3,000 in legal costs and change his business practices. Jason Ankeny was accused of violating Washington’s Consumer Protection Act by advertising “special professional skills,” despite the fact that he is not licensed to practice law or authorized to represent others in immigration matters. According to the consent decree, Ankeny will no longer give advice about immigration matters, and will surrender his registration as an immigration assistant.
Illinois AG Calls for Ban on “Cramming” Phone Charges (July 13, 2011)
Testifying before the United States Senate Commerce Committee, Illinois Attorney General Lisa Madigan called for a national ban on a practice known as “cramming.” Cramming is the practice of allowing third parties to charge services to a phone number, which then appear on the phone bill. According to Madigan, consumers have entered their phone numbers for things such as free trials and surveys only to find unauthorized charges on their phone bill. Madigan says, “Cramming is a fraud epidemic affecting consumers in every state. We must enact legislation to ban third-party businesses from cramming charges on phone bills."
New York Probes Bank of America $8.5 Billion Mortgage Pact (July 12, 2011)
New York Attorney General Eric Schneiderman is investigating Bank of America Corp’s $8.5 billion settlement with investors over losses in mortgage-backed securities. As part of the investigation, Attorney General Schneiderman has requested the names of clients that invested in securities, as well as the values of the clients’ securities. The inquiry is being conducted as part of Schneiderman’s investigation into the securitization of residential mortgages. The settlement was part of the charges that may resolve Bank of America’s legal liability from its purchase of Countrywide Financial Corp. The settlement has been criticized by some as too “gentle,” and some speculate that taxpayers may end up compensating for the excessive losses due to the ownership by Fannie Mae and Freddie Mac of securities covered in the settlement.
Missouri AG Sues Towing Company over Joplin Work (July 11, 2011)
Missouri Attorney General Chris Koster has announced a temporary restraining order against Northland Tow Services,for allegedly defrauding Joplin residents. Attorney General Koster alleges that Northland towed over fifty motor vehicles damaged by the May 22 Joplin tornado without some owners’ permissions, and also falsely informed customers that it was working with an insurance company. The court order prohibits the company from conducting business in Joplin, as well as other Missouri counties, without having previously been solicited to do so.
Ohio AG Sues over Alleged Craigslist Scam (July 8, 2011)
Ohio Attorney General Mike DeWine has announced lawsuits against two men who allegedly ran a Craigslist scam by offering to sell various electronics and electronic accessories. The two Ohio residents, Nicholas Lamb and Robert White, allegedly offered phone cards, cell phones, Playstation 3 systems, and other items via hundreds of Craigslist advertisements, yet failed to deliver the products or provide refunds once customers had paid. Lamb and White are charged with violating Ohio’s Consumer Sales Practices Act, and are liable for full restitution of consumers, as well as civil penalties. The lawsuit also seeks permanent injunctive relief.
Texts Part of Flood Scam, North Dakota AG Says (July 7, 2011)
North Dakota Attorney General Wayne Stenehjem has warned residents of the state that scam artists are attempting to reap profits, via text message, from flood victims. Attorney General Stenehjem has advised residents to avoid responding to the texts, which ask that the recipients respond with “flood” in order to receive assistance if their homes or businesses were damaged by the flood, or “no” for recipients that were not flood victims. Similar scams resulted in respondents being registered for expensive text messaging subscriptions and other various offers of which they were unaware. The Attorney General’s office has emphasized the importance of vigilantly monitoring flood-related scams, as the text messaging scam is likely to be only one of many that will develop over the next few months.
Pennsylvania AG Suing Oklahoma Companies (July 6, 2011)
Pennsylvania Attorney General Linda Kelly has announced a consumer protection lawsuit against United American Technology Inc. and the National Campaign for Moral Values Fund for allegedly violating the Telemarketer Registration Act. The two Oklahoma based companies allegedly circumvented Pennsylvania’s Do Not Call list by using a non-profit company, NCMFV, to call consumers. Callers warned consumers about pornography and child predators, but allegedly did not disclose the purpose of their calls. The lawsuit seeks both companies’ full compliance with Pennsylvania’s Telemarketer Registration Act, and forfeiture of all profits obtained as a result of their deceptive and unfair business practices. Each company is liable for up to $1,000 in civil penalties per violation of consumer protection law, and $3,000 for each violation involving victims age sixty or older.
Texas AG Settles with Online Ticket Broker (June 20, 2011)
Texas Attorney General Greg Abbott has announced a settlement resolving an enforcement action against TicketCity, an online ticket broker. Allegedly, TicketCity unlawfully marketed advance tickets to the Beijing Summer Olympic Games’ opening ceremonies, and made false statements promising customers 200 percent refunds. TicketCity was never in possession of tickets to the Beijing Olympic events and refused to issue refunds to customers, who incurred substantial costs by arranging to attend the events in Beijing. The company has agreed to provide the 200 percent refunds it promised to purchasing customers, and must also provide customers who incurred traveling expenses with restitution.
Warren: Feds Need States' Help With Banking Reform (April 12, 2011)
In a speech to the National Association of Attorneys General (NAAG) in Charlotte, North Carolina, Consumer Financial Protection Bureau Special Advisor Elizabeth Warren expressed a desire to work more closely with state regulators on enforcement of financial laws. "Collaboration between the CFPB and the attorneys general offers tremendous promise," said Warren. "By working together, we can make the whole greater than the sum of our parts."
Wrentham, MA Firm Fined for Labor Violations (April 9, 2011)
The Fair Labor Division in the office of Massachusetts Attorney General Martha Coakley has ordered a Wrentham firm to pay fines and restitution for failing to pay overtime to several construction workers. Glen Pisani and Dana Pisani of D.F.M. Industries, which has filed for bankruptcy, were required to pay over $226,000 over allegations that D.F.M. failed to pay workers for several projects conducted in March.
Amazon, Apple E-book Deals Attract Connecticut Antitrust Scrutiny (August 2, 2010)
Connecticut Attorney General Richard Blumenthal has begun an investigation into the possible anti-competitive agreements between electric book retailers and Amazon and Apple. The investigation was prompted by a concern over provisions in the agreements that prohibit publishers from giving discounts with other book vendors, eliminating the ability for competitors to offer reduced prices on books.
New York Attorney General Probes Insurers' `Secret Profits' on Death Benefits of U.S. Soldiers (July 29, 2010)
New York Attorney General Andrew Cuomo began a fraud investigation of Metlife Inc. and Prudential Financial Inc. concerning the profits on death benefits retained from families of deceased life insurance policy holders including deceased military personnel. The insurance companies place death benefits in interest-bearing accounts and issue IOU’s to beneficiaries to allow time for beneficiaries to decide how to use the payout. The insurance companies earn income by investing the funds and keeping the difference. Cuomo has demanded information regarding the difference of interest income earned and the rate paid to beneficiaries.
Florida Attorney General Warns of Scam Artists Targeting Victims of Gulf Oil Spill (July 22, 2010)
Florida Attorney General Bill McCollum has issued a consumer advisory warning concerning a “phishing” scam related to the Deepwater Horizon Gulf oil spill. E-mails have been sent in which the author identifies himself as Tony Hayworth, British Petroleum (BP) CEO, requesting personal information in exchange for $500,000 in grant funding from BP. The e-mails are believed to have originated in Nigeria.
A.I.G. to Pay $725 Million in Ohio Case (July 17, 2010)
Ohio Attorney General Richard Cordray reached a settlement with American Insurance Group for $725 million concerning Ohio’s claims that A.I.G. committed accounting fraud, stock manipulation, and bid-rigging which harmed three state pension funds. It was the 10th largest securities class action settlement in United States history.
New York Attorney General Wins Suit Against Dating Service (July 12, 2010)
New York Attorney General Andrew Cuomo has won a lawsuit against dating service Great Date Now, Meet Over Drinks and the company’s owners, over fraudulent and illegal business practices. The suit alleged that the company charged up to $5,500 for the service, in violation of a state law limiting fees for social-referral services to $1,000. The court awarded costs, civil penalties and restitution to the company’s clients, with the amount to be determined at a later hearing; Attorney General Cuomo is seeking $720,000 in restitution for clients on nearly 700 contracts.
$460,000 fund set up to repay clients of defunct homebuilder in Maryland (July 6, 2010)
Maryland Attorney General Doug Gansler has reached a settlement with Arch Insurance Company, the bonding company for Equity Homes, LLC to repay consumers. According to the Attorney General, consumers were never refunded the deposits on new homes that were never built.
Read more here.
Alaska AG Announces $500M Settlement in Sate’s Retirement Managing Board’s Lawsuit Against Former Actuary (June 14, 2010)
Alaska attorney general Dan Sullivan announced that the Alaska Retirement Managing Board has settled a lawsuit against its former actuary, Mercer, for $500 million. The lawsuit alleges claims of malpractice, breach of contract and unfair trade practices on behalf of Mercer in their advice on management of the Alaska Public Employees’ Retirement System. Sullivan also stated that this is the largest settlement in history for this kind of claim.
New York AG Files Lawsuit Against Immigration Services Companies (June 8, 2010)
New York attorney general Andrew Cuomo announced that he has filed a lawsuit against several immigration services companies for allegedly defrauding Haitian citizens affected by the recent earthquake. After the earthquake struck the Haitian capital in January, the Department of Homeland Security permitted Haitian citizens living in the United States to obtain Temporary Protected Status for eighteen months. According to Cuomo, the companies in question were not licensed and had provided fraudulent immigration services to the Haitian immigrants.
Florida AG Settles Lawsuit with Office Depot for up to $5.9 Million (June 4, 2010)
Florida AG Bill McCollum settled with Office Depot for up to $5.9 million after bringing a lawsuit against the company for illegal pricing practices. Office Depot had allegedly instituted a new pricing plan for government agencies that included augmented prices to increase company profits. The difference in cost between the two pricing plans will be refunded by Office Depot and placed into an escrow account awaiting claims from agencies subjected to the second plan.