November 16, 2009: Maine Attorney General Janet Mills sues company for unfair and deceptive practices in marketing debt settlement services.
November 16, 2009: Maine Attorney General Janet Mills announced today that she has filed suit against Credit Solutions of America, Inc. (CSA) and its president, Douglas Van Arsdale, for unfair and deceptive practices in the marketing and provision of debt settlement services to hundreds of Maine consumers. This lawsuit follows an investigation conducted by staff in the Attorney General’s Office and at the Bureau of Consumer Credit Protection within Maine’s Department of Professional and Financial Regulation, which licenses debt management service providers. The lawsuit alleges that CSA violated the law by using deceptive and unfair practices in marketing debt settlement services, and for failing to register as a debt management service. The suit seeks to recover fees paid by Maine consumers to CSA, as well as civil penalties and costs.
CSA allegedly charged consumers more for its debt settlement services than allowed for by Maine law. The State alleges that CSA misrepresented the benefits of its program to consumers and failed to clearly and conspicuously disclose important conditions and terms of contracts. The State also alleges that CSA engaged in unfair business practices by exploiting vulnerable individuals in dire financial straits who will drop out of CSA’s program before their debts are settled but after CSA has been paid, in full or in part, for its services.
CSA has claimed that it will settle unsecured debt, usually credit card debt, by as much as 60% of the original debt amount. CSA’s contracts require consumers to pay CSA upfront fees before all their debts are settled. Many consumers have paid CSA in full months before CSA settles their debts. Consumers who enroll in CSA’s program are told to stop paying their creditors in order to save money each month towards settlement negotiated by CSA, which typically takes three to four years. Meanwhile, stopping all payment can result in default leading to more aggressive collection activities and legal action by creditors. Consumers are told to stop talking to their creditors and to refer all communications to CSA. CSA, however, frequently fails to respond to consumers’ inquiries about CSA’s communications with creditors. Many times, settlements obtained by CSA are no better than what a consumer could obtain by dealing directly with her or his creditors.
Many Maine consumers who enrolled in CSA’s program dropped out long before their debts were settled. Many have found themselves in worse financial circumstances than they were before they hired CSA, due to higher account balances resulting from rising interest rates, penalty charges for missed payments, poor credit ratings, and lawsuits brought against them by creditors.
Maine’s Debt Management Services Act requires that providers of debt management services register with the Superintendent of the Bureau of Consumer Credit Protection and procure a $50,000 surety bond for the protection of consumers. CSA has never registered and has no surety bond. Maine law prohibits debt management service providers from charging more than a $75 set-up fee and more than 15% of the amount by which the consumer’s debt is reduced as part of each settlement. CSA charges 15% of the consumer’s total debt, a difference that costs Maine consumers thousands of dollars.
November 16, 2009: Illinois Attorney General Lisa Madigan settles with internet based telephone provider Vonage for improper billing and marketing practices.
November 16, 2009: Illinois Attorney General Lisa Madigan today announced a settlement agreement with Vonage, one of the nation’s largest providers of Internet-based telephone services, which will require the Holmdel, N.J.-based company to provide refunds to consumers who were improperly billed and significantly alter its marketing and customer cancellation practices.
The settlement, which was filed by Madigan and 31 other states, resolves complaints from consumers who could not cancel their Vonage service. Although Vonage enrolls customers online, the company does not allow customers to cancel online, instead requiring them to cancel by phone. Consumers have complained about excessively long wait times and service representatives refusing to allow consumers to cancel. In fact, Vonage customer service representatives allegedly received incentives for retaining customers in lieu of cancellation. Consumers also complained that they continued to be billed by Vonage even after cancelling the phone services. The settlement places strict limitations on the company’s cancellation and customer retention policies.
Today’s agreement bans Vonage from billing customers after they cancel their plan and requires the company to confirm the cancellation with the customer via e-mail within two days of the transaction. As part of the settlement, Vonage agreed to provide restitution to eligible consumers who complained of being improperly billed by Vonage from January 2004 to the present. Consumers who have not previously filed a complaint with the Attorney General’s office have until March 16, 2010, to file a complaint in order to request a possible refund as part of this agreement. In addition, Vonage must modify its customer retention program by requiring customer service agents to obtain customers’ express consent to the service on a recorded phone call and to send a subsequent e-mail notification to the customer alerting them of the service with Vonage.
The settlement also addresses a number of marketing practices that have caused customer confusion about costs associated with Vonage equipment and service. According to the agreement, Vonage allegedly failed to fully disclose the terms and fees associated with what was advertised as a “free month of service.” The company failed to notify consumers that the first month of service would be accompanied by an activation fee, shipping and handling costs, taxes, and universal service, regulatory recovery and emergency 911 fees. Further, Vonage failed to disclose that, in the event a customer cancels service within 30 to 60 days, the company’s money-back guarantee did not include the cost of shipping equipment back to Vonage and affiliated taxes. As a result of today’s settlement, Vonage agreed to revise its disclosures to more clearly define the offer of “free” services, money-back guarantees and trial periods. Also as part of the settlement, Vonage agreed to pay $3 million to the states involved in the settlement agreement.
In addition to Madigan, the Attorneys General from the following states participated in this consumer protection settlement: Alabama, Arizona, Arkansas, Connecticut, Florida, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Montana, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia and Wisconsin.
Assistant Attorney General Philip Heimlich handled the case for Madigan’s Consumer Fraud Bureau.
November 12, 2009: Missouri Attorney General Chris Koster sues six Missouri businesses for auto warranty fraud.
November 12, 2009: Missouri Attorney General Chris Koster today warned consumers about new tactics businesses are using to try to trick people into purchasing bogus auto warranty products of limited value. Koster filed lawsuits against six such businesses today. According to Koster, the businesses marketed what appeared to be "extended auto warranties" to consumers, but actually were "service contracts" or "automotive additives." Many consumers did not realize they were not receiving auto warranties until they received the package in the mail. The companies sold the products as service contracts and auto additives with the effect of avoiding Missouri's service contract laws, which provide some minimal protection for consumers.
Customers who purchased "service contracts" often later realized the significant limits to coverage. Many contracts contain a 30 to 90 day, 1,000 mile period during which consumers cannot make claims, because that is considered a "pre-existing condition" of the vehicle. However, the extended service contract is only fully refundable within the first 30 days. Customers asked for a cancellation or refund when they discovered the provider would not pay a claim after that initial period, but were refused refunds because they were not within the 30-day cancellation timeframe. Many of the contracts have also been promoted as extending a warranty for 7 years and 100,000 miles. These companies do not tell the consumer that the coverage may be limited to the actual cash value of the vehicle. For an older, high-mileage vehicle, the coverage may soon be less than the price paid by the consumer for the contract.
For companies using the auto additive scam, customers were sent a bottle of fluid for their car's transmission, engine, or cooling system, with instructions to immediately add it to the vehicle. Customers were instructed to install the additive in order for the warranty to be valid. But they later were denied a refund and told the purchase is non-refundable if the product has been used. In effect, the companies encouraged consumers to use the fluids immediately, knowing that would nullify their opportunity for a refund. Many consumers did not request the additive and did not realize they would be sent this additive until they received the packet.
Koster said the companies marketed these products using misleading letters, postcards, and telemarketing techniques, some also in violation of Missouri's No-Call law. He said the businesses would lead consumers to mistakenly believe their current vehicle warranties were about to expire and that they would not have another opportunity to purchase an extended warranty unless they acted immediately. Many potential customers were not informed that the businesses were not affiliated with the dealership or manufacturer from whom the customers bought their vehicles.
In addition, some of the businesses sought to illegally obtain the consumer's bank account or credit card information by misrepresenting the purpose of the information. The businesses would then cause automatic charges to consumers' bank accounts or monthly charges to their credit cards without the consumers' permission or knowledge.
The six businesses Koster filed suit against today are:
National Dealers Warranty, Inc., d/b/a/ StopRepairBills.com
Extended Warranty Corporation, Inc., d/b/a/ Key Protection Group
Dealers Warranty, LLC, d/b/a/ MOGI
U.S. Auto Warranty
Dealer Warranty Services
Koster's suits charge the businesses with unfair and deceptive practices violations. Some were also charged with violations of Missouri's No-Call law. In addition, he charged National Dealers Warranty with violation of a prior Consent Judgment and Permanent Injunction issued by the Circuit Court of St. Charles County in 2008, and Warranty Activation Headquarters with violation of a prior Assurance of Voluntary Compliance approved by the Circuit Court of the City of St. Louis in 2008. Koster is asking the court to issue preliminary and permanent injunctions requiring the companies to comply with Missouri's Merchandising Practices Act; provide full restitution to victims and to the state; and pay civil penalties and court costs.
November 10, 2009: Missouri Attorney General Chris Koster announces revocation of funeral home license and seeks restraining order freezing defendant's pre-need assets.
November 10, 2009: Missouri Attorney General Chris Koster and the Missouri Department of Insurance, Financial Institutions and Professional Registration announced today that Buescher Memorial Home of Jefferson City will lose its Funeral Home Establishment license and Barbara Buescher will lose her Funeral Director’s License after findings of multiple violations. In addition, the Attorney General’s office is seeking a temporary restraining order to freeze assets associated with Buescher’s pre-need funeral business, in preparation for seeking restitution for consumers.
According to the Attorney General, the disciplinary decision revokes Barbara Buescher’s Funeral Director’s and Embalmer’s licenses and Buescher Memorial Home’s Funeral Establishment license. The action also involves Buescher Memorial Home’s Preneed Provider Registration and Preneed Seller Registration, which were already inactive because Ms. Buescher had not sought temporary licensure as required by the new preneed law that took effect August 28, 2009. In a disciplinary hearing before the Board, the Attorney General’s office noted there were more than 125 causes for discipline against Barbara Buescher’s licenses and the Buescher Memorial Home’s licenses and registrations.
The causes for discipline centered on Buescher’s handling of its preneed business, and were prompted by complaints. Complaints included that Buescher charged for services at death that were already included in the preneed contracts or were never contracted for in the preneed contracts, entered into preneed contracts with purchasers and failed to deposit the funds received into a trust or into a joint account to pay expenses at death, failed to refund cancellations, made erroneous computations of sales tax that resulted in overcharging, failed to itemize what was purchased, and made mathematical errors that resulted in underpayments and overpayments. The license revocation means Buescher Memorial Home must immediately cease doing business. Ms. Buescher also immediately loses her Funeral Home Director and Embalmers licenses, and may not practice in the field.
November 10, 2009: Illinois Attorney General Lisa Madigan sues marketing company for deceptively promising to reduce consumers' credit card interest rates.
November 10, 2009: Illinois Attorney General Lisa Madigan today filed a lawsuit targeting a telemarketing scam that promises to immediately reduce consumers’ credit card interest rates but ultimately fails to achieve any savings for consumers.
Madigan filed a lawsuit today in Sangamon County against Priority Direct Marketing International, Inc. (PDMI), a Bedford, Texas-based telemarketing firm run by its President, William Fithian, and Advanced Management Services NW, LLC (AMS), a Spokane, Wash.-based firm owned by Ryan Bishop. The suit alleges that the two companies work in a concerted telemarketing scheme to solicit and enroll consumers in deceptive debt negotiation service agreements that promise to immediately reduce consumers’ credit card interest rates, with a guaranteed savings of $2,500. PDMI and AMS telemarketing representatives allegedly promise consumers that the companies will negotiate with consumers’ credit card companies to lower interest rates, and will provide full refunds if they are unsuccessful.
After consumers agree to enroll in the program, the telemarketing schemers allegedly charge consumers’ credit cards for set up fees ranging from $391 up to $1,590. The defendants allegedly tell consumers that these fees will be reimbursed at a later date by the consumers’ banks. Only after consumers’ credit cards are charged for the setup fees do they receive any documentation on the program’s terms and conditions, which on several points, contradict the telemarketers claims in their sales solicitations. Specifically, the defendants misleadingly claim that they can guarantee an interest rate reduction for all customers or provide full refunds in instances where rate reductions are not secured. When customers have requested refunds, after the defendants have failed to negotiate any interest rate reductions, the defendants allegedly refuse altogether or give refunds minus a non-refundable $199 fee that was not disclosed during the sales pitch.
Attorney General Madigan’s lawsuit charges the defendants with violating the Illinois Consumer Fraud and Deceptive Business Practices Act by misrepresenting the services they provide to consumers and the effects the services will have on consumers’ credit. The suit asks the court to enter a permanent injunction barring the defendants from engaging in debt settlement in Illinois and to order the defendants to pay restitution for complainants, civil penalties of $50,000 for violating the Consumer Fraud Act, and an additional $50,000 for each violation committed with the intent to defraud.
Assistant Attorney General Melodi Green is handling the cases for Madigan’s Consumer Fraud Bureau in Springfield.
November 10, 2009: New Jersey Attorney General Anne Milgram settles with Target Corporation
November 10, 2009: New Jersey Attorney General Anne Milgram today announced that Target Corporation has agreed to a $375,000 settlement to resolve a lawsuit alleging that Target Stores sold infant formula and non-prescription drugs beyond expiration dates, sold merchandise that did not match posted prices, and failed to post prices on its merchandise. The settlement also resolves allegations that Target failed to maintain sufficient quantities of advertised merchandise, failed to post its raincheck policy, failed to post bicycle safety notices, and violated a previous Consent Order with the New Jersey Division of Consumer Affairs.
As part of the settlement, Target has voluntarily created a new senior management position, entitled Group Pricing Compliance Specialist, whose duties include monitoring compliance with Target’s policies as well as the settlement terms as to price accuracy. Target has also agreed to provide all Target employees in the state with initial training as to price accuracy. The compliance position and the initial training shall be in effect for two years.
The Office of the Attorney General, the Division of Consumer Affairs, and the Office of Weights and Measures filed suit against Target in September 2008, after inspections of 21 of the company’s 40 New Jersey stores by investigators from the Division’s Office of Consumer Protection and the Office of Weights and Measures. Under the settlement, Target has agreed not to sell or offer for sale any non-prescription drugs or infant formula beyond their expiration dates, to check the expiration dates before displaying such merchandise for sale, to conduct weekly checks of the expiration dates of the merchandise offered for sale and to arrange for the destruction or return to the manufacturer or supplier of any expired merchandise removed from the store shelves.
Further, Target agreed not to sell or offer for sale merchandise at a price that exceeds the price posted at the point of display. Target also agreed not to sell or offer for sale any merchandise unless the total selling price is plainly marked by a stamp, tag, label or sign. In addition, Target agreed to have a sufficient quantity of advertised merchandise to meet anticipated demand or shall advertise merchandise as available in limited quantities. Finally, Target agreed to conspicuously post its raincheck policy as well as the notices required by the state’s Bicycle Safety Act and Regulations.
The $375,000 settlement amount represents $350,000 in civil penalties, $10,000 to reimburse the state’s attorney fees, and $15,000 to reimburse the state’s investigative costs.
Deputy Attorney General Jah-Juin Ho of the Consumer Fraud Prosecution Section represented the state in this action.
November 10, 2009: New York Attorney General Andrew M. Cuomo announces successful lawsuit against New York antique dealer for defrauding customers
November 10, 2009: New York Attorney General Andrew M. Cuomo today announced that his office has won a lawsuit requiring a Newburgh resident who ran an online fraudulent antique artifact operation to pay restitution to those he defrauded. As a result of a lawsuit filed by Attorney General Cuomo, Dutchess County Acting Supreme Court Justice Hon. Thomas J. Dolan issued a decision and order requiring restitution for any consumers he defrauded, plus penalties of up to $5,000 per violation and costs to the state. The order also permanently bars Veleanu from selling jade artifacts unless they can be verified as authentic.
An investigation by Cuomo’s office determined that Mircea Veleanu sold artifacts online claiming that they contained high quality and expensive jade, when they actually were made of quartz or glass. He then refused to provide refunds or acknowledge that the pieces were fake. Veleanu, a retired doctor and collector of antique jade carvings and other oriental artifacts, portrayed himself as an expert on such wares and has authored three books devoted to his collection. Since at least 2001, Veleanu began selling items from his collection, including jade carvings, under the business name of “Objets D’Arts Uniques.” In 2002, he began selling items through eBay and GoAntiques.com.
In 2007, Veleanu, of Susan Drive in Newburgh and Heritage Hills in Somers, sold two strings of jade Tibetan Prayer Beads (malas) to a consumer, one of which he falsely claimed was made of “fei tsui” jade, an extremely valuable and high quality type of jade. Over the next two years, he convinced the same consumer to purchase seven malas for a total price of $12,365. Veleanu continually assured the consumer that the jade was pure and of the highest quality. He also sold two calligraphy brushes for $2,400 and falsely described them as containing high-quality jadeite beads. Upon closer inspection after purchase, the consumer saw that the beads contained bubbles indicating that they were actually made of glass and not jade. The consumer then subjected all of the jade malas she purchased from Veleanu to the American Gemological Trade Association (AGTA), which determined that they were all made of dyed quartz instead of jade. Veleanu refused to provide refunds from the consumer, rejected the labs’ results and continued to insist that the items were indeed made of authentic jade.
Under the decision, Veleanu is permanently barred from advertising and selling jade items unless it has first been tested and confirmed as legitimate by the American Gemological Trade Association Testing Center or a lab of equal reputation. Veleanu must also provide a complete accounting of all of his customers and pay full restitution to those he defrauded.
The Attorney General thanked the Gemological Institute of America for assisting in the investigation. The case was handled by Assistant Attorney General Nicholas Garin under the supervision of Assistant Attorney General-in-Charge of the Poughkeepsie Regional Office Vincent Bradley and Deputy Attorney General for Regional Affairs J. David Sampson. Investigator Judy Koerber assisted in the case.
November 10, 2009: Texas Attorney General Greg Abbott seeks restitution from fraudulent mortgage rescue firm.
November 10, 2009: Texas Attorney General Greg Abbott today took legal action to obtain restitution for a fraudulent “mortgage rescue” firm’s victims. Dallas County 134th District Judge James M. Stanton granted an agreed temporary injunction barring Markus and Tyrone Bailey from deceptively operating the unlicensed businesses, Behind on Mortgage and Behind on Mortgages USA at 6060 N. Central Expressway in Dallas. The agreement requires the defendants to either reimburse all customers from whom it collected unlawful fees, or place these monies in a trust pending final judgment. The defendants have been subject to a Nov. 2 temporary restraining order halting their deceptive practices that harmed struggling homeowners. While the Baileys never obtained a license as a mortgage broker from the Texas Department of Savings and Mortgage Lending, they nonetheless solicited distressed homeowners who had fallen behind on their mortgage payments.
The defendants visited homeowners facing foreclosure and pitched a way for them to obtain new loans, renewals, extensions of time to pay and modifications of existing mortgage loans. In return, the defendants required at least $1,000 in advance from homeowners and demanded they have no contact with – or make future payments to – their original mortgage servicers. The defendants retained homeowners’ fees for services and provided no measurable foreclosure relief, nor did they negotiate with mortgage servicers. Thus, many homeowners who dealt with the defendants ultimately lost their homes to foreclosure action. The defendants even continued to operate unlawfully despite a late-October cease-and-desist order from the Department of Savings and Mortgage Lending.
In addition to restitution, the attorney general seeks civil penalties of up to $20,000 per violation of the Texas Deceptive Trade Practices Act, as well as attorneys’ fees. The attorney general contends the defendants also violated other provisions of the Texas Business and Commerce Code by failing to provide homeowners with a required option to cancel the in-residence solicitation. Defendants violated the Texas Finance Code by failing to obtain a license.
November 9, 2009: Florida Attorney General Bill McCollum sues Florida companies for charging up-front fees failing to provide promised services.
November 9, 2009: Florida Attorney General Bill McCollum today announced that his office has filed a lawsuit against two Central Florida companies and their owner over allegations they charged up-front fees for foreclosure rescue-related services. National Payment Modification Company and The Bostonian Group, LLC, which conducts business under the name People’s First, allegedly charge up to $2,500 in up-front fees to homeowners trying to rescue their homes from foreclosure.Also named in the lawsuit is William Rodriguez, the owner of both companies, who was a founding owner of Wineberg, Lopez, & Rodriguez Company. The Attorney General’s Office sued Wineberg, Lopez, & Rodriguez Company in March and obtained an emergency injunction barring the company from charging homeowners any fee in advance for providing foreclosure-related rescue services. That case is still pending in Orange County Circuit Court.
An investigation conducted by members of the Attorney General’s Economic Crimes Division, working as part of the Attorney General’s Mortgage Fraud Task Force, determined that both companies charge the up-front fee and divide it into five equal payments secured by post dated checks. Each check, according to the lawsuit, is associated with a separate “sub-contract” or step in the loan modification process. Consumers complained that both companies cash the post-dated checks even though the companies have not begun negotiations or even contacted the consumers’ lenders.
The Attorney General’s Office is seeking permanent injunctions prohibiting the companies from charging up-front fees, restitution on behalf of injured consumers, civil penalties of $15,000 for each violation, and reimbursement for attorney’s fees and costs related to the investigation. The Attorney General’s Office has filed numerous civil lawsuits to enforce the state law prohibiting companies from charging up-front fees for foreclosure-related rescue services and is currently investigating over 75 additional companies.
November 9, 2009: Texas Attorney General Greg Abbott obtains agreement with Tagged.com which prevents it from misappropriating identities from its members.
November 9, 2009: Texas Attorney General Greg Abbott today resolved an enforcement action against Tagged, Inc., a social networking site operator that has an estimated two million Texas users. Under an agreed final judgment obtained by the state, Tagged must implement new privacy features and take additional measures to inform users about how the Web site will utilize their personal information.
To use Tagged’s social networking service, users must register and create an account. During the enrollment process, state investigators found that the defendant misled subscribers into providing Tagged access to users’ e-mail address books. Tagged then used this access to send deceptive electronic invitations to users’ personal contacts under the user’s name. Tagged’s deceptive solicitation campaign in early June triggered the state’s investigation. In this venture, Tagged sent e-mails to subscribers’ contacts using the member’s name, and misled those contacts by claiming that subscribers wanted to share their photos. To view those “photos,” which in many instances did not exist, contacts were told they must join Tagged. Tagged enrolled those recipients as users and sought access to their e-mail address books, continuing the deceptive cycle.
Under today’s judgment, Tagged must clearly disclose its intention to access subscribers’ e-mail address books and send e-mails to users’ contacts. Tagged must secure express, verifiable consent from subscribers for either activity to occur and must allow users to view a sample of the e-mail Tagged will distribute. The judgment also requires Tagged to allow subscribers to select or deselect any individual contacts from their e-mail address book who will receive the corporation’s electronic communication. Tagged also must provide subscribers the option to skip unnecessary access to their e-mail address books.
To better protect subscribers’ personal information, Tagged must designate a corporate level compliance representative and adopt a formal retention policy. The defendant also must allow subscribers to set their accounts to a “private” setting that blocks unauthorized access to their information.
Today’s judgment orders Tagged to pay $145,000 in civil penalties for violations of the Texas Deceptive Trade Practices Act. Tagged also must pay $105,000 to cover the state’s investigative costs.
November 9, 2009: New York Attorney General Andrew Cuomo obtains agreement with Tagged.com preventing it from misappropriating identities from its members
November 9, 2009: New York Attorney General Andrew M. Cuomo today announced that his office has stopped the social networking site Tagged.com from misappropriating the contacts lists and identities of its members and from sending out millions of deceptive and unsolicited promotional emails. Through an agreement with Cuomo’s office, the company must pay $500,000 in penalties and costs to the state and adopt industry-leading measures regarding the access and use of its members’ personal information.
In June, Cuomo announced his notice of intent to sue the company for deceptive acts after his office became aware that Tagged had sent more than 60 million misleading emails to unsuspecting recipients stating that Tagged members had posted private photos online for their friends to view. In reality, no such photos existed and the email was not from their friends. When recipients of these fraudulent emails tried to access the photos, they were told that they had to sign up for Tagged.com. The company would then deceptively gain access to the new members’ personal email contacts to send out more fraudulent invitations. The invitations were constructed to appear as if they had been sent directly from members’ personal email accounts instead of from Tagged.com. The emails falsely stated that “[name] sent you photos on Tagged.” If a member had added a personal image to the website, Tagged also included that picture in these fraudulent email solicitations. Many consumers had no idea that Tagged had accessed their email contact lists or used their photos until they were told by family, friends and business contacts that the company had sent out invitations in the consumers’ names.
As a result of the Attorney General’s settlement with the company, Tagged must adopt a series of stringent reforms designed to set an industry standard for how social networking sites send out invitation emails. Tagged must provide clear and conspicuous disclosures when asking for access to a new user’s email contacts and will no longer access those contacts or send messages on behalf of a Tagged member without that member’s informed permission. Before sending out email invitations, the company must also verify the emails with new members to make sure they do not inadvertently invite everyone on their contact lists.
The case was handled by Justin Brookman, Chief of the Internet Bureau, Assistant Attorney General Clark Russell, and Investigator Vanessa Ip, under the supervision of Michael Berlin, Deputy Attorney General for Economic Justice.
November 6, 2009: Wisconsin Attorney General J.B. Van Hollen sues New Jersey locksmiths for deceptively representing themselves as local businesses.
November 6, 2009: Wisconsin Attorney General J.B. Van Hollen has filed an enforcement action in Ozaukee County Circuit Court against Locksmiths, Inc., a New Jersey corporation, and its owner, Gabriel Munteoreanu, of Brooklyn, New York. The complaint is the result of an investigation by the Department of Justice into fraudulent yellow pages locksmith listings. According to the complaint, Mr. Munteoreanu, through Locksmiths, Inc., attracts business through the use of numerous telephone numbers, business names and addresses in order to mislead consumers seeking locksmith services. The purpose of the phony business names and addresses, according to the state, is to deceive consumers into believing they are calling a local locksmith business, when in fact all of the numbers connect the consumer to the out-of-state call center of Locksmiths, Inc., which then dispatches a contract locksmith.
The state asserts that most consumers would not hire Locksmiths, Inc. if they knew that it was not located at the address or phone number listed in the business directory used by the consumer to locate a locksmith. The complaint asks the Court to impose forfeitures against the defendants for violations of Wisconsin's fraudulent advertising statute, to order the defendants to halt their fraudulent advertising, and to pay restitution to consumers injured by the defendants' misrepresentations.
The case was investigated and referred to the Department of Justice by the Wisconsin Department of Agriculture, Trade and Consumer Protection. The case is being prosecuted by Assistant Attorney General John S. Greene.
November 5, 2009: Ohio Attorney General Richard Cordray sues Texas company for faulty and unfair services in connection with subprime and prime mortgages in Ohio.
November 5, 2009: Ohio Attorney General Richard Cordray today filed a lawsuit against American Home Mortgage Servicing Inc. (AHMSI), a Texas-based company servicing more than 12,000 subprime and prime mortgage loans in Ohio. The lawsuit alleges numerous violations of the Ohio Consumer Sales Practices Act including but not limited to: incompetent and inadequate customer service, failure to respond to requests for assistance, failure to offer timely or affordable loss mitigation options to borrowers and unfair and deceptive loan modification terms.
Today’s filing in Cuyahoga County Common Pleas Court marks Cordray’s second lawsuit against a loan servicer company, positioning Ohio as the lead state nationally in holding servicers accountable in the wake of the foreclosure crisis. According to the lawsuit, AHMSI required loan modification agreements that forced consumers to pay excessive fees and waive their rights in order to get help. The suit also alleges that the terms of loan modifications were unconscionably one-sided in favor of AHMSI. The lawsuit seeks a permanent injunction from the continuation of unfair and deceptive loan modification practices, consumer restitution, civil penalties and damages. It also requests that the court order AHMSI to implement processes designed to provide efficient, competent and adequate customer service to all of its Ohio mortgage customers.
November 4, 2009: Pennsylvania Attorney General Tom Corbett files suit against Philadelphia pet supply company for making false claims about charitable contributions and failing to provide refunds.
November 4, 2009: Pennsylvania Attorney General Tom Corbett today announced that the Attorney General's Bureau of Consumer Protection has filed a civil lawsuit against a Philadelphia man and his pet supply company who are accused of making false claims about charitable contributions and failing to provide refunds to consumers who returned items.
Corbett said the lawsuit was filed against Joseph P. White, of 101 Morris St., Philadelphia, the owner of Furlong's Pet Supply, which conducted Internet sales and also used addresses in both Philadelphia and Wilmington, Delaware. White's business also allegedly operated as Tapping Paw, though neither fictitious business name is properly registered in Pennsylvania. According to the consumer protection lawsuit, White's pet supply website advertised that ten percent of the proceeds from every sale would be donated to a charity called the Adopted Dog Training Association. That "charity" allegedly provided obedience training for people who adopted dogs from Philadelphia area animal shelters. "In reality, this dog training 'charity' was little more than a sham, created by Mr. White, to lure sympathetic consumers into making purchases from his online business," Corbett said. "The organization was never registered as a charity in Pennsylvania and no money was ever donated to it."
Corbett said that in addition to the false claims about charitable contributions, White is also accused of failing to honor the return policy stated at his store and on his website - not providing refunds to consumers who returned items within the specified 21-day return period.
The lawsuit seeks restitution for consumers who paid for products they did not receive along with refunds for items that consumers had properly returned. Additionally, the lawsuit seeks penalties of up to $1,000 for each violation of Pennsylvania's Consumer Protection Law, or up to $3,000 for each violation involving a senior citizen. The consumer protection lawsuit was filed in Philadelphia Court of Common Pleas by Senior Deputy Attorney General Henry Hart III and Deputy Attorney General Sarah A. E. Frasch of the Attorney General's Bureau of Consumer Protection.
November 2, 2009: Florida Attorney General Bill McCollum sues Florida timeshare resale marketing companies.
November 2, 2009: Florida Attorney General Bill McCollum today announced that his office has filed a lawsuit and has requested an emergency injunction against two related South Florida timeshare resale marketing companies. Universal Marketing Solutions, Creative Vacation Solutions, and owner/manager Jennifer Kirk allegedly collected over $4 million in marketing fees on a monthly basis, but rarely if ever marketed, advertised, or facilitated sales for the timeshare owners who had contracts with the companies. The injunction requests the companies’ cease doing any timeshare business while the lawsuit is pending.
An investigation conducted by the Attorney General’s Economic Crimes Division indicated that Kirk and her companies were charging marketing fees as high as $2,500 for timeshare resale advertising services. The companies were soliciting hundreds of consumers nationwide via the internet and though aggressive telemarketing calls, allegedly making empty promises and false misrepresentations that they would actively match timeshare sellers with prospective buyers. According to the lawsuit, when prospective buyers contact the companies to purchase a timeshare, no attempt would be made by the companies to match those prospective buyers with sellers who had contracted with the companies, thus making the advertising and marketing claims a complete sham.
To solicit more customers, the companies allegedly boasted of their “superior marketing tools,” including marketing events, presentations and seminars. Kirk and her companies allegedly claimed they could “definitely” sell timeshares within a certain period of time and that they had buyers waiting with approved financing to buy the consumers’ timeshare. Consumers were also verbally assured contract terms during telemarketing calls, but were furnished contracts with entirely different terms regarding the resale services. Additionally, the companies would allegedly charge consumers’ credit cards or cash consumers’ checks without and/or before obtaining a signed written contract from the consumer delineating all the terms and conditions of the services to be provided.
Consumers who complained to the Attorney General’s Office reported that the companies have not performed the promised services and that they were unable to contact the companies or get refunds. The Attorney General's Office believes that there could a total of more than 400 victims affected by the two companies' deceptive practices, and has been receiving approximately 10 complaints per day against these companies. The lawsuit seeks an injunction prohibiting the defendants from engaging in any timeshare resale business while the litigation is pending. The lawsuit also requests full restitution on behalf of all victimized consumers, civil penalties, and reimbursement for fees and costs related to the investigation.
October 30, 2009: Pennsylvania Attorney General Tom Corbett settles with Pennsylvania assisted living facility for failing to refund security deposits.
Oct. 30, 2009: Pennsylvania Attorney General Tom Corbett announced that the Attorney General's Health Care Section has reached a $33,525 consumer protection agreement with a Lancaster County assisted living facility accused of failing to properly refund security deposits paid by residents. Corbett said the Assurance of Voluntary Compliance (AVC) was reached with Hearthstone Manor of Mount Joy, which operates independent and assisted living facilities in Mount Joy, Lancaster County, and Lebanon. The AVC also includes The Bricker Group Inc., the parent company for Hearthstone Manor, along with company owners Jeff and Sandra Bricker, of Lititz.
According to the consumer protection agreement, residents at Hearthstone Manor were required to prepay a security deposit of $1,500 which was intended to be used to offset the cost of cleaning, sanitizing repairing or refurnishing residential units when they were vacated. The resident agreements allowed for a minimum charge of $250, with additional funds to be withheld based on the amount of wear on the apartment or need for repairs. Corbett said that on occasion Hearthstone Manor allegedly withheld more than the minimum amount from security deposits without providing residents with a written explanation of the additional charges and without maintaining records that would support these extra fees. Additionally, Hearthstone Manor allegedly failed to refund some security deposits within the required 30-day period after residents vacated the facility.
According to the Assurance of Voluntary Compliance, Hearthstone Manor does not admit any wrongdoing but has agreed to pay $21,500 in restitution to a total of 26 consumers who have already filed complaints with the Attorney General's Health Care Section, along with $12,025 to offset the cost of the investigation and various fees. Corbett said the agreement also requires Hearthstone Manor to pay restitution for any additional valid consumer complaints that are received by the Health Care Section before December 8th, 2009. In addition, the AVC requires all security deposits to be held in a secure escrow account and that Hearthstone Manor will provide consumers with a good faith estimate and accounting for all costs related to cleaning, sanitizing, refurbishing or repairing vacated residential units.
The Assurance of Voluntary Compliance was filed in Commonwealth Court by Deputy Attorneys General Timothy E. Gates and Nicole VanOrder, along with Chief Deputy Attorney General Thomas M. Devlin of the Attorney General's Health Care Section.
