Menu

News

The State AG Report Weekly Update June 29, 2017

Antitrust

FTC, North Dakota Attorney General Challenge Acquisition of Health Care Provider

  • The Federal Trade Commission (“FTC”) and North Dakota AG Wayne Stenehjem filed a joint complaint in federal district court seeking to pause health care system Sanford Health from acquiring health care services provider Mid Dakota Clinic over concerns that the acquisition would violate federal antitrust laws.
  • According to the FTC and the AG’s office, Sanford Health and Mid Dakota are the region’s closest rivals and a merger allegedly would reduce significantly the options for adult primary care, pediatric, obstetrics and gynecology, and general surgery physician services in parts of North Dakota.
  • The joint complaint seeks a temporary restraining order and preliminary injunction to maintain the status quo pending an FTC administrative trial on the merits of the merger.

Charities

California Attorney General Settles with Car Donation Charity Over False Advertising Allegations 

  • California AG Xavier Becerra reached a settlement with car donation charity The People’s Choice Charities (“People’s Choice”) to resolve allegations that it violated state consumer protection and charities laws by failing to use proceeds in the manner its solicitations advertised.
  • According to the AG’s office, People’s Choice allegedly retained almost all proceeds it received from charitable car donations for its own administrative costs, such as advertising, towing, and car repairs, despite advertising that 100 percent of car donation proceeds would be given to the charities selected by the donors.
  • Under the terms of the final judgment and permanent injunction, People’s Choice must be dissolved and pay $900,000, $30,000 of which will be donated to the California Community Foundation for the benefit of children, and the remainder will be suspended subject to compliance with the settlement terms.

Consumer Financial Protection Bureau

CFPB Reaches Settlements with Credit Repair Companies for Allegedly Deceptive Business Practices

  • The Consumer Financial Protection Bureau (“CFPB”) initiated two related actions against credit repair companies Prime Credit, LLC, IMC Capital, LLC, Commercial Credit Consultants, and its owner and president (collectively, “Prime Credit”) and Park View Law and its owner (collectively, “Park View”) for allegedly misleading customers about their credit repair services and charging illegal upfront fees in violation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
  • According to the CFPB, the companies’ claims that they could remove virtually any negative information from a consumer’s credit report and significantly boost their credit scores regardless of the consumer’s debt history were allegedly misleading and unsubstantiated. Further, the companies allegedly charged illegal advance fees and misrepresented their limited money-back guarantee.
  • Under the terms of the proposed final judgments, Prime Credit must pay a civil penalty of $1.5 million and Park View must pay $500,000 in disgorgement.

Court Denies Attorneys General’s Motion to Modify Settlement Terms of CFPB Enforcement Action

  • The U.S. District Court for the Southern District of New York denied a motion filed by the Connecticut, Indiana, Kansas, and Vermont AGs to modify the final judgment in a settlement between the CFPB and Sprint Corporation.
  • As previously reported earlier this year, the AGs sought to intervene and challenge the allocation of settlement funds so that unused monies for consumer redress from the CFPB’s settlement with Sprint could be redirected to the NAAG for consumer protection purposes rather than deposited in the U.S. Treasury.
  • The Court denied the AGs’ proposed reallocation of funds on multiple grounds and held that the CFPB is the only party that can apply unexpended funds toward other equitable relief.

Consumer Protection

Texas Attorney General Reaches Agreement with Travel Service Company Over Allegedly Deceptive Business Practices

  • Texas AG Ken Paxton reached an assurance of voluntary compliance (“AVC”) with travel service company Exciting Travel Destinations, LLC d/b/a Alamo Guest Services and its owners (collectively, “Alamo”) for allegedly violating state law by offering deceptive travel promotions.
  • According to the AG’s office, Alamo allegedly contacted consumers to offer them gifts in exchange for attending a presentation about their travel club membership and savings programs, but allegedly did not provide consumers the gifts or the travel savings they were promised.
  • Under the terms of the AVC, Alamo will pay $75,000 in consumer restitution, civil penalties, and attorneys’ fees.

Texas Attorney General Reaches Settlement with Online Contact Lens Provider Over Alleged Consumer Protection Violations

  • Texas AG Paxton reached a settlement with online contact lens distributor and wholesaler THEG, Inc. d/b/a Fine and Clear (“Fine and Clear”) for allegedly violating the state’s Deceptive Trade Practices Act and Optometry Act by selling lenses without requiring a valid prescription.
  • According to the AG’s office, Fine and Clear sold lenses to consumers without requiring them to provide a valid prescription, in violation of state law which prohibits the selling or dispensing of any type of contact lenses unless the seller receives a valid prescription.
  • Under the terms of the settlement, Fine and Clear will pay the state $31,000 in civil penalties, $5,000 in attorneys’ fees, and issue refunds to consumers who purchased lenses and return them within 90 days of the settlement date.

State AGs in the News

Louisiana Attorney General to be NAAG President in 2018-2019

  • The National Association of Attorneys General (“NAAG”) chose Louisiana AG Jeff Landry as its new President-Elect at the annual Summer Meeting, which took place June 20-22 in Big Sky, Montana. AG Landry will serve as President of NAAG for the 2018-2019 term.
  • Additionally, Kansas AG Derek Schmidt began his 2017-2018 term as NAAG President at the Summer Meeting.
  • NAAG elects its officers yearly, typically rotating through NAAG’s four regions (East, Midwest, South, and West).