The State AG Report Weekly Update January 3, 2019

2019 AG Elections

Former Kentucky AG Greg Stumbo Announces Bid for Kentucky AG

  • Former Kentucky AG Greg Stumbo, a Democrat, announced his candidacy for Kentucky AG in 2019.
  • Stumbo is an attorney in private practice who previously served in the Kentucky House of Representatives for 32 years, including as Speaker of the House from 2009 until 2007, and as the Attorney General of Kentucky from 2004 until 2008.
  • Stumbo is the first candidate to publicly announce that he is seeking the Democratic nomination.

Consumer Protection

Massachusetts Attorney General Settles with Automobile Lender Over Allegedly Facilitating Sales of Defective Vehicles

  • Massachusetts AG Maura Healey reached a settlement with auto lender Sensible Auto Lending, LLC (“Sensible Auto”) to resolve allegations that it facilitated the sale of defective vehicles by certain used car dealerships in violation of the state Cost of Consumer Credit Disclosure Act.
  • According to the AG’s office, Sensible Auto allegedly used insurance claims under a policy intended to protect lenders when vehicles are damaged or unrecoverable to instead recover for credit losses, effectively causing the annual percentage rates on consumers’ loans to exceed the state statutory cap, and provided financing to dealerships despite knowing of their high default and repossession rates and consumer complaints against the dealerships.
  • According to the AG’s office, under the terms of the Assurance of Discontinuance, Sensible Auto will pay nearly $734,000 in debt relief and refunds for consumers, waive all outstanding deficiency obligations for consumers, repair consumers’ credit with credit reporting agencies, and refund payments to consumers for whom it allegedly misused insurance policy claims.

Minnesota Attorney General Files Lawsuit Against Cable Provider Over Allegedly Deceptive Advertising

  • Minnesota AG Lori Swanson filed a lawsuit against cable provider Comcast Corporation d/b/a Xfinity and its subsidiaries (collectively, “Comcast”) for allegedly using deceptive advertisements and practices to promote cable television packages in violation of the state Prevention of Consumer Fraud Act and the state Uniform Deceptive Trade Practices Act.
  • According to the complaint, Comcast allegedly artificially decreased its cable television package prices by charging consumers additional fees that were often undisclosed, misrepresented total costs to consumers and failed to disclose the substantial additional fees in advertisements and sales pitches, charged consumers for unauthorized services and equipment, and failed to deliver promised promotional items.
  • The complaint seeks declaratory and injunctive relief, restitution, civil penalties, and costs and attorneys’ fees.
  • As previously reported, Massachusetts AG Maura Healey reached a settlement with Comcast over allegedly deceptive advertising of long-term cable contracts in November 2018.

Financial Industry

40 Attorneys General Settle with Bank Over Allegedly Artificially Manipulating Interest Rates

  • 40 AGs led by former New York AG Barbara Underwood and Connecticut AG George Jepsen reached a settlement with Swiss financial institution UBS AG (“UBS”) over allegations that it fraudulently manipulated the London Interbank Offered Rate (“LIBOR”)–a benchmark interest rate that affects financial instruments–leading up to and during the 2008 financial crisis.
  • According to the AGs, UBS allegedly misrepresented the integrity of the LIBOR by concealing, misrepresenting, and failing to disclose that UBS made LIBOR submissions to avoid negative publicity, protect its own reputation, and benefit its derivative trading positions, causing UBS to unjustly gain millions when government entities and non-profit organizations entered into financial instruments with UBS.
  • According to the settlement agreement, UBS will pay $64.6 million in restitution and $3.4 million in costs, and UBS is prohibited from misrepresenting or omitting material facts with submission of LIBOR and making false LIBOR submissions.
  • As previously reported, other financial institutions reached similar settlements with similar multistate coalitions of AGs in 20162017, and 2018 over allegations of LIBOR manipulation.

Pharmaceuticals

Rhode Island Attorney General and Drug Enforcement Administration Settle with Pharmacy Chain Over Allegedly Filling Prescriptions of Controlled Substances in Excess of Statutory Maximums

  • Rhode Island AG Peter Kilmartin and the U.S. Drug Enforcement Administration (“DEA”) reached a settlement with pharmacy chain Rite Aid Corporation (“Rite Aid”) over allegations that it filled prescriptions of Schedule III controlled substances in excess of statutory maximums in violation of the state’s Controlled Substance Act.
  • According to the AG’s office, Rite Aid stores in the state dispensed Schedule III controlled substances such as Dronabinol–an anti-nausea medication for patients undergoing chemotherapy–and Butabital-Apsirin-Caffeine and Fioricet–medications used to treat headaches and mild or moderate pain–which were prescribed in excess of the statutory limit of 100 dosage units.
  • According to the AG’s office, under the terms of the settlement Rite Aid will pay $300,000 to the AG’s office which will be used to implement programs and services for substance use prevention, treatment, and recovery and for law enforcement measures, implement systems to prevent the dispensing of dosage units over the statutory maximum, instruct employees on the statutory maximum, and perform controlled substance reviews at its Rhode Island stores.
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