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Attorneys General and Federal Agencies Battle a Flood of COVID-19-Related Fraud, Fake Medicines, and Price Gouging

  • State and federal law enforcement agencies are stepping up their efforts to protect the public from bad actors capitalizing on the COVID-19 pandemic. Included here are just some notable examples.
  • Membership Fees: New York AG Letitia James, along with District of Columbia AG Karl Racine and Pennsylvania AG Josh Shapiro, sent a letter to Town Sports International Holdings, Inc., the parent company of Washington Sports Club, Philadelphia Sports Club and New York Sports Club (collectively “the Clubs”), demanding that the Clubs follow consumer protection laws and implement immediate freeze on memberships at no cost to members and honor cancellation requests without imposing additional fees or conditions.
  • Fake Treatments:
    • Arizona AG Mark Brnovich sent a cease-and-desist letter to YiLoLife, LLC ordering it to stop marketing and selling a tincture that YiLoLife implied could boost the immune system’s ability to resist and combat COVID-19.
    • Michigan AG Dana Nessel sent a letter to VitaStick, Inc. and related company $tronghold, Inc. demanding they stop selling fake COVID-19 at-home test kits and provide refunds to consumers who purchased the kits.
    • New York AG James also sent a letter to cannabidiol (“CBD”) retailer Finest Herbalist ordering it to cease and desist from falsely marketing its CBD product as a means to cure or treat COVID-19.
  • Price Gouging: Washington AG Bob Ferguson launched a new initiative called “See It, Snap It, Send It” to make it easier for consumers to report price gouging by uploading phone photos filing complaints with the AG’s office.
  • Robocalls: The Federal Trade Commission (“FTC”) and the Federal Communications Commission (“FCC”) sent joint letters voice-over-Internet-protocol (“VoIP”) providers SIPJoin Holdings Corp., Connexum, and VoIP Terminator Inc. d/b/a BLMarketing asking them to cease routing and transmitting illegal COVID-19-related robocalls and warning them of potential law enforcement action should they fail to do so. The FTC and the FCC also sent a joint letter to USTelecom – The Broadband Association thanking the Association for identifying the originators of unlawful robocalls and notifying its members that, if any of the identified gateway or originating providers continues to route or transmit the originators’ robocalls on its network, thereby continuing to facilitate the transmission of robocalls on American networks, the FCC will authorize other U.S. providers to block all calls coming from that gateway or originating provider, among other things.