Hot News

Association of Corporate Counsel Webcast: Preview of the 2014 State Attorney General Elections

  • Dickstein Shapiro and the Association of Corporate Counsel (ACC) are partnering for a webcast on Wednesday, April 30 at 11:00 AM EDT to preview the 2014 state attorney general elections.
  • Bernie Nash and Lori Kalani of Dickstein Shapiro will lead an interactive discussion about the candidates who are vying for the office of state attorney general in the upcoming elections for nine open seats.
  • This webcast is free and open to the public. Register here.

2014 Election

District of Columbia Council Objects to Bill Seeking to Place Attorney General on 2014 Ballots

  • According to a media report, the District of Columbia Council, during a council breakfast meeting, objected to a bill introduced by Councilmember Mary M. Cheh that would allow candidates to petition for a place on the election ballot.
  • The council allegedly objected to the bill because of timing, the nature of the nomination process, and the lack of a runoff. Councilmember Cheh admitted that the bill would likely not get enough votes to pass, stating, "It's dead. There's no way to revive it." In a letter to the council, Mayor Vincent Grey implied that he would veto the bill if it were to come to him. A veto from the mayor would require the council to obtain two additional council votes for the proposal.
  • An appeal, filed by potential candidate for attorney general, Paul Zukerberg, to overturn the grant of a motion to dismiss by the District of Columbia Superior Court, is still pending with the District of Columbia Court of Appeals. Zukerberg had sued to place the attorney general position on the ballots in 2014.

Consumer Financial Protection Bureau

CFPB Releases Consumer Response Annual Report

  • The Consumer Financial Protection Bureau released its 2013 Consumer Response Annual Report. The report highlights that consumer complaints increased almost 80 percent, from 91,000 complaints in 2012 to 163,700 complaints in 2013.
  • According to the report, the top three types of complaints in 2013 related to mortgages (37 percent), debt collection (19 percent), and credit reporting (15 percent). Other types of complaints highlighted in the report include those related to bank accounts, credit cards, consumer loans, money transfers, private student loans, and payday loans.
  • The report also outlines the remedies provided for these complaints. Most complaints were closed with an explanation (68 percent). Others were resolved with monetary relief (7 percent) or other non-monetary relief (11 percent).

Consumer Protection

Lawsuits Filed Against Payday Lenders by Illinois Attorney General

  • Illinois AG Lisa Madigan filed five lawsuits against four payday lenders and a loan lead generator alleging illegal and predatory lending practices. The lawsuits followed cease and desist orders issued to the lenders and the loan lead generator by the Illinois Department of Financial and Professional Regulation.
  • AG Madigan alleges that online payday lenders BD PDL Services LLC, Mountain Top Services I LLC, Red Leaf Ventures LLC, and VIP PDL Services LLC illegally offered expensive and predatory loans to Illinois borrowers. The Illinois Payday Loan Reform Act (the "Act") limits the fees a lender can charge to $15.50 per $100 loaned. These lenders allegedly charged borrowers $30 per $100 loaned.
  • The Act also bars lenders from issuing a loan if that loan would result in the borrower being in debt to more than one payday lender for more than 45 consecutive days or carrying a balance on two loans. There is also a mandatory seven-day waiting period for a new loan once the prior loan is paid. These lenders allegedly allowed borrowers to take out multiple loans at once and MoneyMutual LLC, the loan lead generator, allegedly generated customer leads on payday loans with unlicensed vendors.
  • The lawsuit seeks injunctive relief, cancelation of pending payday loans, consumer restitution, and civil penalties for violations of the Act and the Illinois Consumer Fraud and Deceptive Business Practice Act.

West Virginia Attorney General Settles With Auto Title Lenders for $1.2 Million

  • West Virginia AG Patrick Morrisey settled with Fast Auto Loans Inc. and Virginia Auto Loans Inc. for $1.2 million to resolve allegations of improper loan practices and violations of the West Virginia Consumer Credit and Protection Act and the Virginia Motor Vehicle Title Lending Statute.
  • West Virginia does not permit title loans. Title loans are high-interest, short-term loans secured by the title to a consumer's vehicle. Fast Auto Loans and Virginia Auto Loans allegedly seized over 200 cars from West Virginia residents using coercive techniques and false threats.
  • Under the settlement, the companies agreed to close all accounts, cancel all debt owed to them by West Virginia consumers (estimated at $816,000), return any unsold vehicles seized from state residents, and remove any liens on those vehicles. The companies also agreed to pay the state $450,000. Of that money, $150,000 is for consumer restitution and another portion is for consumer protection.

Data Privacy

Multistate Investigation of Alleged Experian Data Breach

  • Multiple AGs will jointly investigate Experian plc's alleged data breach that may have exposed over 200 million social security numbers.
  • According to a media report, the investigation will most likely focus on whether Experian complied with laws that require companies to appropriately secure customer information and to disclose breaches.
  • Illinois AG Lisa Madigan's office confirmed that it was a part of a multistate investigation and Connecticut AG George Jepsen's office confirmed that it was also investigating the matter.

For-Profit Colleges

For-Profit College Sued by Massachusetts Attorney General for Alleged Deceptive Practices and Unfair Loans

  • Massachusetts AG Martha Coakley sued Corinthian Colleges Inc. and Corinthian Schools, Inc. (Corinthian), which operate Everest Institute, for alleged deceptive and unfair practices related to their marketing, enrollment tactics, and loan programs.
  • Corinthian responded, "[The] action by the Massachusetts Attorney General's Office disregards substantial, independent evidence that our two schools in Massachusetts have a strong record of offering students a quality education and treating them honestly and fairly...We will vigorously defend the record of our campuses in Massachusetts and our employees' commitment to the success of students and graduates."

Medicaid Fraud

Kansas Strengthens Medicaid Anti-Fraud Law

  • The Kansas Legislature passed Senate Bill 271, proposed by Kansas AG Derek Schmidt and sponsored by the state senate judiciary committee, to strengthen the Medicaid Fraud Control Act.
  • The amendments to the law increase criminal penalties for defrauding the Medicaid program and allow the AG to obtain fines between $1,000 and $11,000 per violation of the act.
  • The bill, which the state house and the state senate unanimously passed, was sent to the governor on April 5, 2014.

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