State AG Monitor

State AGs in the News

By Bernard Nash , Divonne Smoyer , and Ann-Marie Luciano on Posted in Consumer Financial Protection Bureau, Consumer Protection, Environment, Insurance, Mortgages/Foreclosures, Pharmaceuticals

Consumer Financial Protection Bureau

CFPB Wants Better Credit Access for Stay-At-Home Spouses

  • The CFPB proposed a revision to the Truth in Lending Act that would ease access to credit for stay-at-home spouses by allowing them to rely on shared income when applying for credit cards.
  • Under the current “ability-to-pay” rule, card issuers must base evaluations of creditworthiness only on that individual’s income, and may not consider the income of a spouse or partner that is not joined on the account.

CFPB Taking Consumer Complaints on Credit Reporting

  • The CFPB requests that consumers who believe there is incorrect information on their credit reports, or who have an issue with the investigation, first file a complaint with the credit reporting agency. If a consumer is then dissatisfied with the resolution, he or she may file a complaint with the bureau.
  • This extends the kind of complaints the CFPB already handles, which includes credit card complaints, mortgages, bank accounts and services, consumer loans, and private student loans.
  • In July 2012, the CFPB began supervising about 30 consumer reporting agencies that have more than $7 million in annual receipts.

Consumer Protection

New Jersey Attorney General Announces $2.2 Million Judgment against Legal Assistance Organization

  • New Jersey Attorney General Jeffrey Chiesa announced a $2.2 million judgment against The Project Freedom Fund for allegedly misleading prisoners and their families into paying hundreds of dollars for legal services that were never rendered, or if they were rendered, were performed by either a disbarred attorney or someone who is not an attorney.
  • In addition to the judgment, the individual defendants, owners of the organization, may no longer practice law in New Jersey.

New York Attorney General Sues Beauty School over Deceptive Tactics

  • New York Attorney General Eric Schneiderman brought suit against Tinny Beauty, Inc. and two of its officers for misleading students about nail specialist license applications, allegedly convincing consumers to pay hundreds of dollars, but failing to provide the training needed to receive a license.
  • The suit seeks full restitution for consumers injured by the alleged scheme, penalties, and injunctive relief.

Environment

Massachusetts Attorney General Announces $366 Million Settlement with AVX

  • Massachusetts Attorney General Martha Coakley announced that her office and the federal government have reached a settlement with AVX to resolve allegations that AVX discharged hazardous substances into the New Bedford Harbor between 1940 and the 1970s.
  • The $336 million settlement, plus interest, will be used to remediate the contamination, which includes dredging PCB-contaminated sediment and disposing of it in a proper off-site facility.

Texas Attorney General Reaches $2.1 Million Settlement with Two Dry-Cleaning Businesses

  • Texas Attorney General Greg Abbott announced that his office has reached a settlement with two dry cleaners to resolve allegations that they violated Texas environmental law by failing to stop volatile organic compounds from leeching into groundwater.
  • The state is requesting public comment on the $2.1 million settlement, saying that the state may withdraw consent if it learns that the settlement is inadequate.

New York Attorney General Settles with Walgreen Co.

  • New York Attorney General Eric Schneiderman announced that his office reached a settlement with Walgreen Co. to resolve allegations that the company misled consumers into thinking their insurance plan covered flu shots provided at Walgreens.
  • Under the terms of the settlement, Walgreens must stop advertising free flu shots for Empire Plan members and offer refunds for any customer forced to pay for the flu shot out-of-pocket.

Massachusetts Attorney General Settles with Thailand Seafood Company

  • Massachusetts Attorney General Martha Coakley announced that her office reached a $10,000 agreement with a Thailand-based seafood distributor to resolve allegations that it used unlicensed software to gain an unfair advantage over Massachusetts businesses.
  • Under the agreement, the seafood distributor has agreed to no longer use unlicensed software in connection with its goods entering the state, and will pay $10,000 in civil penalties to the state.

Insurance

AIG Agrees to Pay $11 Million to 39 States and $300 Million to Policy Beneficiaries

  • AIG is the latest insurance company to reach a settlement with 39 states and the District of Columbia to resolve allegations that it improperly withheld death benefits from policy beneficiaries.
  • As part of the settlement, AIG has agreed to routinely use the Social Security Death Master File to determine whether insureds have died. For beneficiaries who cannot be located, AIG has agreed to send payment promptly to the appropriate state.

Mortgages/Foreclosure

Virginia Attorney General Brings Suit against National Foreclosure Solutions

  • Virginia Attorney General Ken Cuccinelli announced that his office has filed suit against National Foreclosure Solutions (NFS), a Virginia–based mortgage loan modification company that allegedly charged consumers illegal fees for its services.
  • The lawsuit requests that the suit enjoin NFS from violating the Foreclosure Rescue Law and that it return any money it collected in violation of the law. The lawsuit also requests that NFS pay civil penalties of up to $2,500 per violation, costs of $1,000 per violation, and attorney fees.

Pharmaceuticals

New York Attorney General Reaches $1.2 Million Settlement with Pharmacist

  • New York Attorney General Eric Schneiderman announced that his office has reached a settlement with a Brooklyn pharmacist to resolve allegations that the pharmacist defrauded Medicaid by improperly billing for prescription medications that he purchased on the street.
  • In addition to agreeing to pay $1.2 million, pharmacist Rao Veeramachaneni has agreed to close his pharmacies and surrender his pharmacist license.