Litigation

Maine AG Janet Mills has announced that her office and the US Federal Trade Commission have filed a lawsuit against three corporations and six individuals “for their roles in a deceptive campaign to sell a joint health supplement and a cognitive health supplement in violation of state and federal laws,” according to a Maine AG news release. The complaint alleges that the defendants “employed unfair or deceptive acts or practices in the advertising, marketing, distribution, and sale of [the health supplements] FlexiPrin and CogniPrin,” including making “false claims about the efficacy and testing of their products” and “deceptively enroll[ing] consumers in ‘continuity plans’, or automatic monthly shipments for which consumers’ credit and debit cards were automatically charged,” according to the news release. The news release notes that six of the nine defendants have agreed to settlements that “will result in over $500,000 total in monetary judgment and strong injunctions,” including for “one defendant and his corporations, a 20-year ban on marketing or selling dietary supplements directly to consumers.”

Texas AG Ken Paxton has announced that his office has filed a lawsuit charging a Texas-based construction company and its owners with “repeat violations of the Texas Deceptive Trade Practice Act (DTPA)” for “allegedly targeting Hispanics in a home building scam,” according to a Texas AG news release. The lawsuit alleges that the company “claimed in ads targeted to Spanish-speaking consumers that it could complete a new home in five months with ‘no financing’ and ‘no interest,’” however an investigation by the Texas AG’s office “found that prospective home buyers were required to make deposits of up to 60 percent in order to start construction of their homes, [and] the company would often delay starting or neglect to complete,” according to the news release. The news release further states that “a number of consumers complained about facing local fines because their homes were built without proper permits.” The Texas AG’s lawsuit seeks a “permanent injunction against the defendants, restitution for affected home buyers, and civil penalties of up to $20,000 for each of the defendants’ violations of the DTPA,” according to the news release.

Advocacy

On February 22, state AGs from 18 states and the District of Columbia sent a letter to the US Department of Education and Congressional leaders to “express [the AGs’] support for recent federal protections for students and taxpayers in higher education,” and to state that the AGs are “deeply concerned that rollbacks of these protections would again signal ‘open season’ on students for the worst actors among for-profit post-secondary schools.” The “recent federal protections” supported by the AGs in the letter include, for example, the “Gainful Employment Rule,” which the AGs’ letter notes “allows prospective students to compare debt-to-income ratios across schools” and so “protects students from programs that will leave them saddled with debt and without job prospects in the careers for which they trained.” The AGs state in the letter that the Gainful Employment Rule and other federal protections are needed in part because “[o]ver the past fifteen years, millions of students have been defrauded by unscrupulous for-profit post-secondary schools.” The AGs’ letter also notes that “[a]s the chief consumer law enforcement agencies in our states, our offices handle thousands of complaints concerning higher education every year.” According to the AGs, “[a]llowing for-profit schools unfettered access to federal student loan money without reasonable oversight and accountability is a mistake that American students and taxpayers should not be made to pay for again.”