The State AG Report Weekly Update February 16, 2017

Consumer Protection

Florida Attorney General and FTC Settle With Debt Relief, Payment Processing, and Telemarketing Companies

  • Florida AG Pam Bondi and the FTC obtained federal court approval of consent judgments against debt relief service providers (Steven Short, Karissa Dyar, and related entities d/b/a Satisfied Services Solutions, LLC), payment processors (CardReady LLC and its principals), and a telemarketing company (One Easy Solution LLC and its principals) (collectively “the Companies”), for allegedly operating a debt relief scam in violation of the FTC Act, the FTC Telemarketing Sales Rule, and the Florida Deceptive and Unfair Trade Practices Act.
  • According to AG Bondi, the Companies allegedly misled consumers into purchasing debt relief services and collected more than $12 million from consumers without providing the advertised services or issuing refunds to consumers.
  • Under the terms of the seven consent judgments (available via the AG’s press release), the Companies must, among other things, pay more than $4 million to Florida and the FTC and are permanently banned from engaging in telemarketing and selling or advertising any debt relief products or services.

Florida Attorney General Settles with Loan Service Companies for Alleged Loan Scheme

  • Florida AG Pam Bondi settled with unsecured loan service companies Liberty Unsecured, Inc., Unsecured Loan Source II, Inc., First Solutions, Inc., and their principals (collectively “the Companies”) over allegations that the Companies engaged in a loan scheme that violated the Florida Deceptive and Unfair Trade Practices Act.
  • As previously reported, AG Bondi sued the Companies alleging that they deceived consumers into paying illegal upfront fees for unsecured loans from their “lender network,” which included online lead generators and/or online lenders.
  • Under the terms of the settlements, the Companies will pay up to $8 million in restitution to consumers who had previously submitted complaints against the Companies, with any remaining portion of the $8 million judgment (including civil penalties) suspended.

Georgia Attorney General Settles with California Payday Lender for Allegedly Charging Consumers Illegal Interest Rates

  • Georgia AG Chris Carr reached a settlement with Western Sky Financial, LLC, CashCall, Inc., and related entities (collectively “Western Sky”) for allegedly violating the state’s Payday Lending Act by collecting interest rates that were above statutory limits on online loans.
  • According to the AG’s office, Western Sky allegedly deceived consumers into paying interest rates that were as high as 340%.
  • Under the terms of the settlement, Western Sky is enjoined from engaging in lending activities that are not in compliance with state law and will pay $23.5 million in consumer restitution, $1 million in civil penalties, and $500,000 in legal fees and costs. It will also cease all collections in Georgia and forgive outstanding loans, which will provide another $17 million in consumer relief.
  • As previously reported, the settlement is the latest in a string of enforcement actions taken against Western Sky by AGs.

New Jersey Attorney General and FTC Reach Settlement with Smart TV Company Over Data Privacy

  • New Jersey AG Christopher Porrino and the Federal Trade Commission (“FTC”) reached a settlement with smart television (“Smart TV”) manufacturer VIZIO, Inc. and VIZIO Inscape Services, LLC (collectively “VIZIO”) to resolve allegations that the companies violated the FTC Act and state consumer protection laws by tracking consumers’ television viewing histories and selling this information to third parties without consumers’ consent.
  • According to the complaint, VIZIO allegedly failed to inform consumers that VIZIO Smart TVs were equipped with surveillance technologies that tracked viewing habits and that VIZIO sold consumer viewing data to third parties for marketing purposes.
  • Under the terms of the Stipulated Order, VIZIO will pay $1 million in civil penalties and attorney fees to the state ($300,000 of which is suspended) and $1.5 million to the FTC. VIZIO will also, among other things, prominently disclose and obtain affirmative consent from consumers for its data collection and sharing practices, destroy any data collected without consent prior to March 1, 2016, and implement a comprehensive data privacy program.

State v. Federal

7 AGs File Amicus Brief in Support of Protections for Non-Citizen Federal Detainees

  • Seven Democratic AGs, led by California AG Xavier Becerra, filed an amicus brief in the U.S. Supreme Court in Jennings v. Rodriquez, a case which addresses the government’s ability to detain non-citizens pending conclusion of removal proceedings.
  • According to the AGs, non-citizen detainees are entitled to the same basic protections under the U.S. Constitution as those received by other non-criminal detainees held by the federal government, including a hearing to determine if continued detention is justified.
  • The AGs assert they have a strong interest in allowing these non-criminal detainees, who have been detained for longer than six months, to seek a legal route for remaining in the U.S. without the threat of arbitrary detentions by the federal government.

State AGs in the News

Steve Marshall Appointed as Attorney General of Alabama

  • Marshall County District Attorney Steve Marshall was appointed by Governor Robert Bentley as Alabama AG to fill the unexpired term of former AG Luther Strange. As previously reported, Strange was appointed to the U.S. Senate last week to fill the U.S. Senate seat of Jeff Sessions who was confirmed as U.S. Attorney General on February 8.
  • AG Marshall will serve the remainder of the term until the next scheduled general election in November 2018.
  • Prior to being appointed AG, Marshall served as District Attorney for the 27th Judicial Circuit in Marshall County, Alabama since 2001. He was reelected three times without opposition. Before becoming District Attorney, Marshall was a founding partner of McLaughlin & Marshall and was a legal analyst for the Alabama House of Representatives.

West Virginia Attorney General Is New Chairman of Republican Attorneys General Association

  • The Republican Attorneys General Association named West Virginia AG Patrick Morrisey as its new Chairman, succeeding former AG Luther Strange, who, as we previously reported, was appointed to the U.S. Senate seat vacated by Jeff Sessions when he was named the Attorney General of the United States.
  • AG Morrisey was first elected as West Virginia AG in 2012 and re-elected in 2016. He previously served as the Deputy Staff Director and Chief Healthcare Counsel for the U.S. House of Representatives Energy and Commerce Committee.