Election News

The State AG Report Weekly Update April 28, 2016

2016 Election

Pennsylvania Attorney General Primary Election Results

  • Pennsylvania held their primary elections for Attorney General on Tuesday, April 26.  In the Democratic primary, Montgomery County Commissioner and Former State Representative Josh Shapiro won the nomination against Pittsburgh District Attorney Steve Zappala and Northhampton County District Attorney John Morganelli by a margin of 47% to 37% and 16%, respectively.  In the Republican primary, State Senator John Rafferty defeated former police officer Joe Peters by a margin of 64% to 36%.  Incumbent Attorney General Kathleen Kane did not run for re-election.
  • The next Attorney General primary will be West Virginia on May 10. Both Incumbent Republican Attorney General Patrick Morrisey and Democrat Doug Reynolds are running unopposed.

Consumer Financial Protection Bureau

CFPB Sues Owners of an Online Aggregator of Short-Term Loans for Alleged Unfair and Abusive Practices 

  • The Consumer Financial Protection Bureau (“CFPB”) filed complaints against the co-founders of T3Leads, a lead aggregator for payday and installment loans, over alleged violations of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The CFPB filed a separate lawsuit against the company in December.
  • A “lead aggregator” buys consumer information, called “leads,” from “lead generators,” which are websites that market payday and installment loans, and then sells the information to lenders.
  • According to the CFPB, the co-founders of T3Leads allegedly provided substantial assistance and had significant responsibility for T3Leads, which the CFPB alleges, in part, steered consumers to lenders who violated state laws and offered consumers less favorable terms than the consumers were promised.

CFPB Issues Consent Orders to Law Firm, Debt Buyer for Allegedly Unfair and Deceptive Debt Collection Practices

  • The CFPB issued consent orders to debt collection law firm Pressler & Pressler, LLP and two of its principal partners (collectively “Pressler”), as well as debt buyer New Century Financial Services, Inc. (“New Century”) for alleged violations of the Fair Debt Collection Practices Act and the Dodd-Frank Act.
  • According to the consent orders issued to Pressler and New Century, New Century allegedly bought and collected defaulted consumer debts and turned the debts over to Pressler, which then allegedly filed lawsuits against the debtors based on unreliable and false information and harassed debtors with court filings that were unsubstantiated.
  • Under the terms of the consent orders, Pressler and New Century will pay penalties of $1 million and $1.5 million, respectively, to the CFPB’s Civil Penalty Fund. In addition, both companies must no longer file lawsuits or threaten to sue unless they review specific “account-level” information to confirm that the debts in question are accurate and enforceable and must take specific steps to ensure that affidavits used in court filings accurately represent the relevant facts.

Consumer Protection

New York Attorney General Settles With Six Ticket Brokers for Alleged Unlawful Ticket Resales

  • New York AG Eric Schneiderman reached a settlement with ticket brokers, Inc., Charm City Entertainment LLC, Just In Time Tickets, Inc., A2Z Tix LLC, Flying Falco Entertainment, Inc. (d/b/a Avery Tickets), and All Events Utah, LLC to resolve allegations the companies unlawfully purchased and resold tickets.
  • According to the AG’s office, the companies allegedly sold tickets to events in New York without obtaining required resale licenses, and, except for Charm City Entertainment, allegedly used illegal software that enabled them to purchase large numbers of tickets on ticket websites before they could be bought by consumers.
  • Under the terms of the settlements, which are part of a broader investigation by AG Schneiderman into the concert and sports ticket industry, the companies must maintain proper ticket reseller licenses, abstain from using illegal ticket purchasing software, and pay a combined $2.8 million in disgorged profits and penalties to the state.

New York Attorney General Reaches Settlement With National Drugstore Chain for Allegedly Overcharging Customers and Misleading Advertisements

  • New York AG Eric Schneiderman announced a settlement with Walgreen Co. and its subsidiary Duane Reed (collectively “Walgreens”) to resolve allegations that it violated state consumer protection laws.
  • According to the AG’s office, Walgreens allegedly deceptively induced consumers to purchase products sold at its stores by, for example, charging prices that differed from prices published in print advertisements and on expired tags on store shelves, and representing that goods were a “Great Buy,” “Last Chance,” or “Clearance” when they were sold at the original retail price or not limited time deals.
  • Under the terms of the settlement, Walgreens will pay $500,000 in penalties, fees, and costs and change certain aspects of its advertising and business practices in the state, including removing expired shelf tags within 36 hours and conducting internal and external price check audits in its stores.

New York Attorney General Issues Letters to Retailers Calling for Removal of Children’s Toys Containing High Lead Levels

  • New York AG Eric Schneiderman issued letters to several major brick-and-mortar and on-line retailers of Cra-Z-Art children’s toys containing high lead levels in violation of state and federal law.
  • In the letters, AG Schneiderman called on the retailers to immediately halt selling the products, as well as participate in future recalls, if any. He also sent letters to product suppliers, calling on them to undertake similar actions, and began an investigation into how the products reached store shelves. In addition, AG Schneiderman called on the Consumer Product Safety Commission to initiate an immediate nation-wide recall of the products.
  • In November of 2014, AG Schneiderman sent letters to retailers reminding them of their responsibilities to only sell items intended for use by children that are safe and free of toxic chemicals.

West Virginia Attorney General Settles With Insurance Company Over Alleged Antitrust and Consumer Protection Violations

  • West Virginia AG Patrick Morrisey reached a settlement with Wells Fargo Insurance Services of West Virginia, Inc. and Wells Fargo Insurance Services USA, Inc., f/k/a Acordia of West Virginia, Inc. and Acordia, Inc., (collectively “Wells Fargo Insurance”) to resolve an investigation over alleged violations of the state’s antitrust and consumer protection laws. Acordia was acquired by Wells Fargo & Co. in 2001.
  • According to reports, Wells Fargo Insurance allegedly steered clients toward insurers that paid the most money in contingent commissions, profit sharing, and kickbacks, regardless whether the recommended insurers were in the best interest of the client.
  • According to the settlement, Wells Fargo Insurance must pay $8 million to the state.

Health Care

New York Attorney General Reaches an Agreement With Seven Health Insurers to Expand Hepatitis C Coverage

  • New York AG Eric Schneiderman reached an agreement with seven health insurance companies, including Affinity Health Plan, Empire BlueCross BlueShield, Excellus Health Plan, HealthNow, Independent Health, United Healthcare/Oxford, and MVP Health Plan, to expand coverage of treatment for chronic Hepatitis C infection.
  • Under the agreement, the insurers will now cover treatment for chronic Hepatitis C prior to members developing advanced stages of disease, such as liver scarring, and will not deny coverage due to alcohol or drug use or when the doctor authorizing treatment for the infection is not a specialist.
  • The agreements come shortly after AG Schneiderman filed a lawsuit against a separate health insurer for allegedly violating state laws where, among other things, the company required members to show advanced stages of disease before Hepatitis C treatment was covered.