The State AG Report Weekly Update March 23, 2017

Consumer Protection

Maryland Attorney General Settles with Law Firms Over Debt Settlement Services

  • Maryland AG Brian Frosh reached a settlement with National Consumer Law Group, P.C., U.S. Legal Services Group, P.C., Imperial Law Group, P.C., Apex Legal Group, P.C., and Regis Law Group, P.C. and their owner (collectively, “NCLG”) over allegations that the law firms violated the state’s Debt Settlement Services Act.
  • According to the AG’s office, NCLG allegedly failed to register with the state Commissioner of Financial Regulation, improperly charged customers full payment for debt relief services in advance and then “failed to reduce consumers’ debts,” and misled consumers by stating that attorneys would be involved in the services when they were not.
  • Under the terms of the settlement, NCLG is prohibited from advertising or performing debt settlement services in Maryland, must issue refunds to all consumers whose debts were not settled, pay a civil penalty of $200,000, and pay $50,000 for the costs of the investigation and associated fees.

New York Attorney General Settles with Retailer for Allegedly Defrauding Service Members

  • New York AG Eric Schniederman reached a settlement with Freedom Stores, Inc. and Freedom Acceptance Corp. (collectively, “Freedom Stores”) to resolve allegations that the retailer deceived New York service members with debt collection and credit advertising practices in violation of state law.
  • According to the AG’s office, Freedom Stores allegedly employed a scheme to defraud service members by selling them consumer goods at inflated prices, locking them into revolving credit agreements with hidden fees and high interest rates, and aggressively pursuing debts without proper account of payments applied to those debts.
  • Under the terms of the settlement, Freedom Stores must contractually release all New York service members from their debts and clear all negative credit reports related to their contracts.
  • As previously reported, Washington AG Bob Ferguson reached a settlement in late 2015 against the company over similar allegations about its debt collection practices.

Data Privacy

FTC Penalizes Membership Reward Company for Violating Previous FTC Order

  • The Federal Trade Commission (“FTC”) issued a civil penalty against membership reward company Upromise for violating the terms of a previous FTC consent order addressing data collection practices associated with its downloadable toolbar.
  • In violation of a 2012 FTC decision and order, Upromise allegedly failed to make clear and prominent data collection disclosures or obtain third-party assessments of the toolbar’s safeguards and protection of consumers’ personal information.
  • According to the stipulated order, Upromise must not violate the 2012 order and must pay a $500,000 civil penalty.

Health Care

Massachusetts Attorney General Obtains Order Against Owners of Unlicensed Medical Clinic

  • Massachusetts AG Maura Healey obtained a court order against the owners of Florida Men’s Medical Clinic, LLC (“FMMC”) and Men’s Medical Clinic, LLC (“MMC”) over allegations that the companies engaged in unfair and deceptive practices in the marketing, sale, delivery, and billing for medications and services to treat erectile dysfunction.
  • As previously reported, the companies allegedly misrepresented that the medications they offered had minimal side effects, failed to disclose in its advertisements that a needle was involved in treatment, engaged in high-pressure sales tactics, and advertised facilities as clinics when they were not licensed as such, among other things.
  • Under the terms of the settlement, the owners of FMMC and MMC must pay $11 million and $2.5 million in civil penalties, respectively. The AG’s office obtained a separate and final judgment against FMMC and MMC in August 2016 and the companies paid more than $17 million to the state, of which $6.3 million was allocated to restitution for consumers.

State AGs in the News

Gordon MacDonald Nominated As Attorney General of New Hampshire

  • Gordon MacDonald was nominated by Republican Governor Chris Sununu as New Hampshire AG to replace AG Joseph Foster, who recently announced that he will resign at the end of March after four years of service under Democratic Governor Maggie Hassan.
  • A vote on MacDonald’s nomination is expected on April 5. The New Hampshire Executive Council is expected to confirm his appointment.
  • MacDonald is a litigation partner at Nixon Peabody LLP’s Manchester, New Hampshire office where he handles business-related disputes and health care-related matters. Before joining private practice, he worked for former New Hampshire U.S. Senator Gordon Humphrey.

Newly Appointed Oklahoma Attorney General Names New Solicitor General

  • Oklahoma AG Mike Hunter recently selected Mithun Mansinghani to serve as Solicitor General. As previously reported, Oklahoma Governor Mary Fallin appointed then-Secretary of State Mike Hunter as Oklahoma AG to succeed former AG Scott Pruitt, who was confirmed as EPA Administrator in February.
  • Prior to being appointed Solicitor General, Mansinghani served as Deputy Solicitor General under former AG Scott Pruitt. Before working in the Oklahoma AG’s office, Mansinghani also worked in private practice in Washington, D.C. and clerked for the U.S. Court of Appeals for the 5th Circuit.