2009 Accomplishments

OCA investigated both Debt Relief USA, Inc. and Solve Debts, Inc. for violations of Georgia’s Debt Adjustment Act by charging Georgians fees that exceeded the amount allowed by law and failing to distribute the monies collected from consumers to creditors in a timely manner. Debt Relief USA, Inc. also had failed to file proper audit and insurance documentation with the State as required by law.

Both companies settled with OCA. Debt Relief USA, Inc. agreed to refund over $500,000 to Georgia consumers and to pay $40,000 in administrative fees.

Solve Debts, Inc., a California debt adjustment company that has been doing business with Georgia consumers since 2006, agreed to refrain from accepting new clients in Georgia until such time as it changes its business practices to comply with Georgia law, refund approximately $220,000 to Georgians and pay $20,000 in administrative fees. It will also continue to service its existing Georgia clients at no charge.

Southeast Toyota Distributors, LLC (SET) is the entity that certifies and warrants used Toyota vehicles sold in Georgia and several other southeast states. OCA began investigating SET after receiving a complaint from a consumer about the warranty period provided for his certified used car. The warranty period for used Toyotas certified by SET is “seven years or 100,000 miles.” The seven-year period begins on the first day of the year in which the vehicle was originally put into service – not on the date that the vehicle was first put into service. However, SET represented through advertisements and videos that were ultimately disseminated to consumers that the seven-year warranty began to run on the date the car was purchased by its first owner.

As a result of OCA’s investigation, SET extended the warranty/service contract coverage, including roadside assistance, for 10,330 Georgia consumers to a date that aligned with the date that was represented in the advertisements. According to SET, the value of such extension averaged $640.00 per consumer, for a total benefit of $6,611,200 to Georgians.

Dell, Inc. and Dell Financial Services, LLC, which are engaged in computer sales and services, were investigated in connection with alleged deceptive advertising and failure to honor certain rebates and service warranties. Among other things, they ran ads featuring promotional “zero percent” financing, but did not disclose the material conditions that consumers would have to meet to qualify for that interest rate. In addition, certain online consumer purchasers received acceptance notices that indicated they had qualified for the promotional financing, but learned that they had not qualified when they received their first invoice. Consumers also complained that Dell failed to disclose the steps consumers would be required to take before receiving “in-home” and/or “next-day” repair services and that Dell refused to honor mail-in rebates. The companies entered into an Assurance of Voluntary Compliance which required them to discontinue the deceptive practices and to pay $25,000 in consumer restitution and $41,000 in administrative fees.

The retail rug store, Shinco Trading International, Inc. d/b/a Cyrus Fine Rugs, conducted a going-out-of-business sale that lasted for nearly 6 months, in violation of Georgia law. Following OCA’s involvement the company shut down its rug sales operation and agreed, among other things, to pay administrative fees of $25,000.

DISH Network, LLC provides consumers with audio and video programming services via direct broadcast satellites. OCA received a number of consumer complaints regarding DISH and its business practices, including complaints alleging that DISH: failed to comply with state and federal telemarketing and do-not-call laws; failed to adequately disclose material terms and conditions of its services to consumers, such as limitations on the availability of programming, limitations on the use of satellite receivers, and limitations on the availability of rebates, credits, and free offers; failed to disclose to consumers that purchased or leased equipment was previously used and/or refurbished; and electronically debited consumers’ bank accounts and charged credit cards without providing adequate notice and without first obtaining appropriate authorization from consumers. As a result of these complaints, OCA, along with representatives from 45 other states, launched an investigation into the company’s business practices.

DISH entered into a multi-state settlement resolving the issues. DISH was required to cease and desist certain alleged deceptive and unfair practices, to set up a process for speedy resolution of consumer complaints (including payment of restitution to consumers where appropriate), and to reimburse the states for costs and fees incurred during the course of the investigation. Georgia received $125,000 in cost and fee reimbursement.

The grocery store chain, All American Foods d/b/a Food Depot, advertised that its pricing was at “cost plus 10%.” OCA determined that the advertisements were deceptive, because the amount claimed to be “cost” included not only the amount the company paid for a product, but also additional overhead expenses such as freight, stocking fees, and administrative overhead. To resolve this deceptive advertising issue, the company agreed to change its practices by either using the true wholesale cost as “cost,” or by using conspicuous language to disclose that additional overhead costs are included in the “cost” pricing. The company also paid $10,400 in administrative fees.

America’s Value Channel advertises and sells jewelry on television and the web. The company ran deceptive advertisements that showcased “enhanced” gem stones (stones that had been subjected to a process to artificially improve their appearance or durability), but failed to disclose to consumers that the gem stones they were purchasing had been “enhanced.” Consumers would see an ad for a gem stone, and buy the stone, believing they were purchasing an unadulterated, non-retouched stone. After the purchase was made, the consumer was informed that all gem stones were enhanced unless otherwise stated. This pertinent information was relayed only on the sales invoice.

The company entered into an Assurance of Voluntary Compliance under which it is required to provide clear and adequate notice of enhancements, refrain from deceptive practices, pay $50,000 in administrative fees and refund consumers over $34,000.

After Gwinnett County terminated its contracts with Waste Industries, LLC and Allied Waste Services, Inc., private waste collection and disposal companies, the companies attempted to collect an unauthorized $23.50 “service termination fee” from each of their Gwinnett County customers. The companies cooperated with OCA’s investigation, took steps to mitigate their actions, and agreed to refund and/or issue credits to each consumer who either had been charged or had paid the unauthorized fee. The companies paid a total of $590,000 in restitution to the affected Georgians.

OCA took action against the Internet service provider People PC for failing to disclose material conditions and limitations on consumers’ ability to cancel service, failing to address billing discrepancies, and deceptive advertising about some aspects of its services. The company entered into an Assurance of Voluntary Compliance that required it to make clear and conspicuous disclosure of all material terms and conditions of its services, to ensure that its website advertisements reflect updated terms in company cancellation policies, and to address any gaps in its billing services for its customers. People PC provided restitution (or proof of previously paid refunds) to approximately 137 consumers and paid $20,000 in administrative fees.

Earthlink, Inc., also an Internet service provider, continued to bill consumers for services after the consumers had cancelled their subscriptions. The company entered into an Assurance of Voluntary Compliance under which it is required to cease and desist from the problem billing practices, implement policies to prevent a recurrence of these issues, pay restitution and pay $40,000 in administrative fees.

During the State of Emergency declared following Hurricane Ike, OCA received approximately 2,500 complaints related to gasoline price gouging. A number of investigations were opened as a result of those complaints. As of December 31, 2009, 170 of the investigations had been resolved, and price gouging had been confirmed in 100 of the investigations. Settlements in those cases resulted in penalties and fees totaling $172,047.16, plus consumer restitution.

The criminal division of OCA took action against Dwayne Green, CEO of Maximus Investment Group, based on complaints from 34 Georgians alleging Green operated a foreclosure prevention scheme, which he advertised through the Internet. Green promised homeowners he would prevent foreclosure of their homes after payment of $250 to $500 in advance fees. Green did nothing he promised and 33 of these homes went into foreclosure. OCA’s investigation resulted in the December 2009 DeKalb County Grand Jury multi-count indictment of Green for violations of Georgia’s Racketeer Influenced Corrupt Organizations Act (RICO) and related theft laws.

OCA criminal investigation into the use of “skimmed” credit card numbers led to the 2009 arrest of Kevin Jamar Richburg for “skimming”, computer fraud, and credit card fraud. OCA investigators linked Richburg to hundreds of compromised credit card account numbers and the use of skimmed credit cards by members of a Georgia based multi-state fraud ring. OCA investigators seized computers, 85 gift cards and re-encoded credit cards, new merchandise, and $76,000 in cash. This case has been accepted for prosecution by the Atlanta U.S. Attorney’s Office.

OCA’s criminal division was instrumental in shutting down an Internet-based venture capital “advance fee” funding scheme. Anthony Tobin and others conspired to steal over $5 million dollars during the past five years by offering to obtain capital funding for small businesses and funding for individuals trying to bring product ideas to market after payment of “due diligence fees.” Most victims were solicited through Internet postings at funding source websites and through Tobin’s own bogus company websites. The two-year long investigation, which was conducted in concert with federal agencies, culminated in Tobin’s guilty plea to federal racketeering (RICO) violations and the successful November 2009 conviction of a co-defendant Katherine Twigg. A third defendant is currently being sought from South Africa.