The State AG Report Weekly Update July 30, 2015


Oklahoma Attorney General Given New Authority to Review Actions by State Regulatory Boards

  • An executive order by Oklahoma Governor Mary Fallin (R) has given Oklahoma AG Scott Pruitt authority over the proposed actions of certain state regulatory boards to reduce the risk of antitrust lawsuits.
  • The executive order revises the non-rulemaking licensure and prohibition actions procedures for all state boards whose members are predominantly participants in the market they regulate and requires the state boards to submit the actions to the AG for review and written analysis regarding potential antitrust violations.  Members who fail to follow the AG’s written analysis will be subject to removal for misconduct.
  • According to Governor Fallin, the executive order comes in response to North Carolina State Board of Dental Examiners v. Federal Trade Commission, a recent U.S. Supreme Court case that held that a state professional board could be liable for antitrust violations unless it is actively supervised by the State.

Consumer Financial Protection Bureau

CFPB Sues Student Financial Aid Company Over Allegations of Illegal Billing Practices

  • The Consumer Financial Protection Bureau (“CFPB”) filed a complaint and proposed consent order for alleged violations of federal consumer financial protection and telemarketing laws against Student Financial Aid Services, Inc., a company which offers fee-based assistance to consumers in filling out the federal government’s Free Application for Federal Student Aid (FAFSA).
  • According to the complaint, when consumers entered their payment information for certain financial advisory services, the company billed them for an annual subscription without their knowledge or consent and made recurring electronic withdrawals from consumer accounts without proper authorization, among other things.
  • Under the proposed order, the company would halt the allegedly illegal practices and pay $5.2 million in restitution.  The full judgment of $14.5 million is suspended because of the company’s limited financial resources.  Similarly, the company would also pay $1 to the CFPB civil penalty fund, which according to the CFPB allows the Bureau the option to provide additional restitution to harmed consumers through the fund.

CFPB Settles with Bank for Alleged Student Loan Servicing Violations

  • The Consumer Financial Protection Bureau (“CFPB”) filed a consent order against Discover Bank and its affiliates over allegations its private student loan servicing practices, on accounts it acquired from Citibank, violated federal consumer protection laws.
  • According to the CFPB, Discover allegedly overstated the minimum amounts due on billing statements, denied consumers information they needed to obtain federal income tax benefits, and engaged in illegal debt collection tactics, including calling consumers early in the morning and late at night.
  • The consent order requires that Discover improve its student loan servicing and collection practices, pay $16 million in refunds to affected consumers, and pay a $2.5 million penalty.

Consumer Protection

NAAG Sends Letter to Phone Companies Urging Them to Offer Call-Blocking to Consumers

  • 45 AGs partner to send a letter through the National Association of Attorneys General (“NAAG”) to five major phone companies urging them to offer call-blocking technology to consumers to help stop robocalls, scam text messages, and unwanted telemarketing calls.
  • In the letter, the AGs state that their prosecution and enforcement against unwanted calls and scams, by itself, cannot stop the problem, and request that the companies “move swiftly” to apply call-blocking technology they already have for other applications to landline and wireless phones and inform consumers of these options.
  • This request comes after the FCC published final rules paving the way for call-blocking technology to be utilized without violating the Telephone Consumer Protection Act (“TCPA”).

Washington Attorney General Obtains Judgment Against Company For Allegedly Failing to Follow Through on Crowdfunded Project

  • Washington AG Bob Ferguson obtained a final judgment against Altius Management, LLC and its owner for allegedly failing to deliver on a crowdfunded project in violation of state consumer protection law.
  • According to the complaint filed last year, Altius allegedly utilized a crowdfunding website to obtain financial support for its project -- playing cards designed with the work of a Serbian artist, known as “Asylum Playing Cards.”  The company allegedly never completed the project as promised, never sent supporters playing cards or other rewards as advertised, and never issued refunds.
  • The court entered a default judgment against the company and its owner for the full amount paid by Washington residents, $31,000 in civil penalties, and $23,183 in costs and fees.


California Attorney General and DOL Sign Cooperative Agreement to Enforce Labor Law Violations

  • California AG Kamala Harris and the U.S. Department of Labor’s Wage and Hour Division have signed a Memorandum of Understanding to facilitate the sharing of information and resources to enhance their respective enforcement of labor law violations.
  • According to the AG’s press release, the agreement will aid in the enforcement of illegal labor practices, such as violations of minimum wage and overtime laws, and employee misclassification, which denies workers important protections including overtime pay and unemployment insurance.

Health Care

Maryland Attorney General Settles with Contractor Over the Failed Launch of the State’s Health Exchange Website

  • Maryland AG Brian Frosh reached a settlement with Noridian Healthcare Solutions LLC, over its role, as the lead contractor, in the failed launch of Maryland’s heath exchange website, which requires the company to pay $45 million over five years.
  • According to the AG’s office, the company allegedly failed to deliver on what it promised, and this resulted in the botched development and launch of the website, which crashed shortly after launching in October 2013.

State AGs in the News

Massachusetts Attorney General Forms Disability Rights Advisory Committee

  • Massachusetts AG Maura Healey announced the formation of the Disability Rights Advisory Committee to advise the AG’s office on issues and policy.
  • According to the AG’s office, the committee will include advocates and experts and will meet on a regular basis to consult with and advise AG Healey and her staff on matters pertaining to inclusion, access, and equality for individuals with disabilities.