State Enforcement

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Colorado Attorney General Phil Weiser announced a recent agreement between Florida-based debt management company Touchstone Partners, Inc. and the Colorado Department of Law in resolution of Touchstone’s violations of the Colorado Debt Management Services Act (DMSA). Under the agreement, Touchstone is to refund over $110,000 in fees collected from consumers.

The DMSA requires debt management companies to include consumer protections in their agreements and specifically requires companies to provide an agreement signed by both parties.… Continue Reading

The New Jersey Attorney General (NJAG) and the Federal Trade Commission (FTC) recently announced settlements in concurrent actions against Sollers College, a for-profit college, its parent company, Sollers, Inc., and, in the case of the NJAG action, its owner, Siba Padhi  (collectively, “Sollers”), resolving allegations that Sollers lured consumers to enroll by inflating its job placement rates and falsely representing that its relationships with prominent employers would create jobs for its graduates. … Continue Reading

In January 2023, the CFPB filed a lawsuit in a New York federal district court jointly with the New York Attorney General (NYAG) against an auto finance company alleging violations of the Consumer Financial Protection Act (CFPA) and New York law.  The CFPB and NYAG both allege that the defendant violated the CFPA by engaging in deceptive and abusive acts or practices and substantial assisting CFPA violations by the defendant’s affiliated auto dealers. … Continue Reading

A fintech peer-to-peer lender has entered into separate consent orders with California, Washington D.C., and Connecticut relating to its practice of requesting tips and donations in connection with the loans offered through its platform. The fintech’s platform offers opportunities for members to act as borrowers or lenders and facilitates loans between its members.… Continue Reading

On January 31, 2023, the Massachusetts Attorney General’s Office (“Mass AG”) announced a settlement with Hometown Auto Framingham, Inc. (“Hometown Auto”), resolving allegations that the auto dealership had engaged in unfair, deceptive, and discriminatory pricing of add-on products sold to Black and Hispanic consumers.  Under the terms of the settlement, Hometown Auto will pay $350,000, which includes $200,000 in restitution and a $150,000 civil penalty.… Continue Reading

On Friday, January 27, California Attorney General Rob Bonta announced an investigative sweep of businesses that provide mobile apps, issuing warning letters to those that AG Bonta alleges failed to comply with the California Consumer Privacy Act (CCPA).  This sweep focused specifically on “popular retail, travel, and food service industry apps” that failed to comply with consumer opt-out requests or otherwise failed to offer mechanisms for consumers to stop the sale of their personal information.   … Continue Reading

The New Jersey Attorney General recently announced a settlement in its lawsuit against Yellowstone Capital LLC, its parent company, and various subsidiaries and affiliates alleging that the defendants violated the New Jersey Consumer Fraud Act (CFA) and the New Jersey Regulations Governing General Advertising (Advertising Regulations) in connection with marketing and providing merchant cash advances (MCAs). … Continue Reading

On January 4, 2023, Colorado Attorney General Phil Weiser announced settlements with two state-chartered credit unions, Bellco Credit Union (“Bellco”) and Canvas Credit Union (“Canvas”), over Guaranteed Automobile Protection (commonly referred to as Guaranteed Asset Protection, or “GAP”) refunds.  An investigation conducted by the Consumer Protection Section of the Colorado Department of Law found that the credit unions were not refunding GAP fees owed to consumers under state law. … Continue Reading

On December 1, 2022, nationwide used car dealer CarMax Auto Superstores, Inc. (“CarMax”) and 36 state attorneys general announced a $1 million multistate settlement that will require CarMax to disclose open recalls related to the safety of its used vehicles before consumers purchase them.  The settlement resolves an investigation into CarMax’s advertising and sales practices related to vehicle recalls since 2014. … Continue Reading

While most attention is focused on the CFPB, state attorneys general are very active in investigating and enforcing state laws relating to consumer financial services (and often federal laws when incorporated into state law or when using their Dodd-Frank authority).  We first discuss the CPD’s priorities and how they are determined; use of its state law UDAP authority and available remedies; enforcement of federal law; and collaboration with the CFPB and other state AGs.… Continue Reading