Consumer Financial Protection Bureau

CFPB Sues Pawnbrokers for Allegedly Misleading Consumers Regarding Loan Costs

  • The Consumer Financial Protection Bureau (“CFPB”) filed a lawsuit against B&B Pawnbrokers, Inc. over allegations that the company violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act by misleading consumers regarding the costs of their pawn loans.
  • According to the CFPB’s complaint, B&B Pawnbrokers allegedly misled consumers by understating annual percentage rates that failed to reflect fees and other charges.
  • The CFPB’s lawsuit seeks restitution for consumers, civil penalties, and among other things, disgorgement of revenues earned through the allegedly illegal practices. Virginia AG Mark Herring filed a complaint against the company in July 2015 for allegedly violating the Virginia Consumer Protection Act by charging illegal monthly fees and exceeding state limits on interest rates and other practices.

Consumer Protection

11 Attorneys General File Amicus Brief Regarding Sales Taxes in Online Purchases

  • 11 AGs filed an amicus brief with the U.S. Supreme Court asking it to hear arguments in Brohl v. Direct Marketing Association and reconsider the Court’s 1992 decision in Quill Corporation v. North Dakota, which effectively prevents states from collecting sales taxes for online purchases.
  • In the brief, the AGs assert that the reasoning underpinning the Court’s Quill decision, which requires businesses to have a physical presence in the state before collecting sales taxes, is no longer relevant due to the pervasiveness of online entities, and that the ruling discriminates against brick-and-mortar retail stores in favor of e-commerce.
  • The AGs assert that the ruling would increase state revenue, which would benefit states experiencing ongoing budget problems.

FTC Sues Insulated Home Wrap Marketer Over Alleged False Claims

  • The Federal Trade Commission (“FTC”) filed a lawsuit against Innovative Designs, Inc. over allegations that the company violated the Federal Trade Commission Act by making false and unsubstantiated claims regarding its house wrap products.
  • According to the FTC, Innovative Designs allegedly made false and unsubstantiated claims regarding the extent of the insulation power of its products. Additionally, the company misled consumers by touting a flawed and invalid certificate to substantiate their false claims.
  • The lawsuit seeks permanent injunctive relief, restitution for consumers, and among other things, disgorgement of funds received through these violations.

Nebraska Attorney General Settles with Billing Services Company to Resolve Cramming Allegations

  • Nebraska AG Doug Peterson reached a settlement with Billing Services Group North America, Inc. (“Billing Services”) over allegations that the company violated the state Consumer Protection Act and the Uniform Deceptive Trade Practices Act by adding unauthorized charges to consumers’ home telephone bills – a practice commonly known as “cramming.”
  • According to AG Peterson, Billing Services allegedly billed Nebraska consumers for third-party services to their landline telephone bills when the consumers had not authorized or accepted the charges for the services.
  • Under the terms of the Assurance of Voluntary Compliance, Billing Services agreed to pay $5,000 to the State Settlement Cash Fund and to cease providing bill forwarding services and adding charges to consumers’ bills without explicit consent. As we previously reported, the Pennsylvania AG’s office settled with Billing Services over similar allegations in July 2016.

Ohio Attorney General Sues Foreclosure Rescue Firm for Allegedly Failing to Provide Advertised Services

  • Ohio AG Mike DeWine filed a lawsuit against Core Advisory Group, LLC and its operator for allegedly violating Ohio’s Consumer Sales Practices Act by misleading consumers regarding its mortgage-relief services.
  • According to AG DeWine, Core Advisory Group allegedly failed to provide services to consumers who enrolled in the company’s mortgage-relief services program. Under the program, the company offered to file complaints with government agencies against mortgage servicers in an effort to capture the servicers’ attention, as well as work with the consumers’ mortgage servicers to reinstate and restructure mortgage loans. The company allegedly failed to provide these services.
  • The complaint seeks a $25,000 civil penalty and restitution for consumers, among other things.

Pennsylvania Attorney General Sues Nursing Home Chain Over Alleged Misleading Advertisements

  • Pennsylvania AG Bruce Beemer filed a lawsuit against nursing home chain Grane Healthcare Co. and related entities (collectively, “Grane Healthcare”) over allegations that it violated the state’s Unfair Trade Practices and Consumer Protection Law by failing to provide promised services to residents.
  • According to the complaint, Grane Healthcare allegedly billed patients for healthcare services it failed to provide, and misled consumers to believe that its facilities maintained higher staff-to-patient ratios than they actually provided, which impacted patient care.
  • The lawsuit seeks a $1,000 penalty for every violation of state consumer protection law, a $3,000 penalty for every violation affecting residents aged sixty years and older, and among other things, restitution for consumers.

Washington Attorney General Obtains Ruling Against Grocery Manufacturer Trade Group Over Alleged Intentional Campaign Finance Violations

  • Washington AG Bob Ferguson obtained a judgement against the Grocery Manufacturers Association (“GMA”) over allegations that GMA intentionally violated Washington campaign finance laws.
  • Following the Thurston County Superior Court’s earlier determination on summary judgment that GMA failed to register and report its political committee and failed to disclose individual campaign contributions to oppose a bill to require the labelling of genetically modified organisms, the Superior Court found that GMA intentionally carried out these violations. The court cited evidence that GMA created a separate earmarked account to intentionally conceal that it was funded by the Association’s members.
  • Under the judgement, GMA must pay $18 million in penalties and punitive damages. GMA intends to pursue its legal options.

Environment

Illinois Attorney General Sues Car Manufacturer Over Alleged Violation of State Environmental Law

  • Illinois AG Lisa Madigan filed a lawsuit against Volkswagen AG, Audi AG, Porsche AG, and their affiliates and American subsidiaries (collectively the “VW Group”) over allegations that the company violated the Illinois Environmental Protection Act by using software that manipulated data produced during emissions standards testing.
  • According to AG Madigan, the VW Group allegedly sold diesel vehicles equipped with “defeat device” software intended to circumvent applicable emissions standards for certain air pollutants. By doing so, the VW Group allegedly allowed pollutants to be emitted at rates exceeding the U.S. Environmental Protection Agency’s and the Illinois Pollution Control Board’s regulations.
  • The complaint seeks a civil penalty of $50,000 per violation of state emission regulations and an additional $10,000 for each day of violation, as well as costs associated with this lawsuit, among other things. Illinois received consumer restitution and other relief from the VW Group as part of a June 2016 partial multi-state settlement. This is the latest in a series of actions taken against the VW Group by numerous AGs.

State AGs in the News

2016 Attorney General Election Monitoring and Final Results

  • With Election Day behind us, we have updated our 2016 AG Election webpage with a detailed map of the AG results in ten states. For additional information and details about other races involving former and current AGs, please visit our election morning blog post.