The State AG Report Weekly Update May 24, 2018

2018 AG Elections

Arkansas and Georgia Primaries Confirm Nominations of Uncontested Candidates

Acting New York Attorney General Selected as Replacement for Recently Resigned Attorney General as New Candidates Enter Open 2018 State AG Race

Consumer Protection

Arkansas Attorney General Reaches Settlement with Online Candy Retailer to Resolve Allegations of Deceptive Advertising and Refund Practices

  • Arkansas AG Rutledge announced a settlement with online candy retailer Treatsie, LLC (“Treatsie”) resolving allegations that it violated the Arkansas Deceptive Trade Practices Act by allegedly engaging in deceptive advertising and deceptive customer service-related practices.
  • As previously reported, Treatsie allegedly failed to deliver gourmet and artisanal sweets to subscribing customers on time and as advertised; failed to respond to inquiries, complaints, and requests to cancel orders and receive refunds; and made unauthorized charges to customers’ accounts.
  • According to the AG’s office, Treatsie has entered a consent judgment under which it will pay approximately $155,000 in restitution to affected customers and $60,000 in civil penalties, of which $50,000 will be suspended.

Federal Trade Commission Names New Director of Bureau of Consumer Protection

  • Andrew Smith has been named Director of the FTC’s Bureau of Consumer Protection.
  • Prior to his appointment, Smith was a partner in the Washington, D.C., office of an international law firm and has previously worked at the FTC.
  • As Director, Smith will lead the Bureau of Consumer Protection’s enforcement efforts and investigations of alleged unfair, deceptive, and fraudulent business practices.

Washington Attorney General Files Suit Against Real Estate Investment Company Over Alleged Deceptive and High-Pressure Sales Practices

  • Washington AG Bob Ferguson filed suit against real estate investment company Real Estate Investment Network, LLC and three of its representatives and officers (collectively, “REIN”) over allegations they allegedly violated the state Consumer Protection Act (“CPA”).
  • According to the complaint, REIN allegedly approached homeowners whose homes were recently sold in foreclosure to convince the homeowners to hire REIN to recover the surplus funds—funds raised in the sale of a home in excess of the outstanding mortgage balance—on the homeowners’ behalf in exchange for a fee. When homeowners agreed to retain REIN, REIN allegedly provided them contract documents that enabled REIN to keep as much as 50% of the recovered surplus funds.
  • The complaint seeks a declaration that REIN has violated the CPA, injunctive relief, civil penalties, restitution, and attorney’s fees.

State AGs in the News

NAAG Issues Letter to Senate on Behalf of Bipartisan Coalition of 39 Attorneys General in Support of Federal Legislation to Enhance Penalties Against Opioid Manufacturers for Allegedly Suspicious Transactions and Prescription Drug Diversion

  • The National Association of Attorneys General (“NAAG”), on behalf of a bipartisan coalition of AGs representing 38 states and U.S. territories and the District of Columbia, sent a letter to the chairs of the Senate Judiciary and Health, Education, and Labor Committees urging those Committees to support passage of the proposed Comprehensive Addiction and Recover Act 2.0 (“CARA 2.0”) and Comprehensive Addiction Reform, Education, and Safety Act (“CARES”), which contain provisions that would increase the penalties on opioid manufacturers for failing to report suspicious transactions, failing to maintain effective controls against diversion, and the illegal diversion of prescription drugs.
  • The AGs argue that some opioid manufacturers fail to implement adequate measures to detect and prevent the illegal diversion of prescription drugs and that the enhanced penalties proposed under CARA 2.0 and CARES are necessary to ensure that manufacturers move quickly to prevent such conduct.
  • According to the letter, CARA would increase civil penalties per violation from $10,000 to $100,000 for negligence in reporting of suspicious transaction activity and would increase the maximum criminal penalty from $250,000 to $500,000 for companies that willfully disregard or knowingly fail to maintain proper reporting systems or fail to report suspicious activity.
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