Civil Accomplishments

Listed below are some of the 2019 civil achievements for the Office of the Attorney General, Consumer Protection Division (CPD).

Credit Issues, including Debt Collection Practices, Credit Repair, and Debt Adjustment

  • Financial Education Services, Inc., and co-owners Michael Toloff and Parimal Naik (collectively referred to as ‘FES’)

    Attorney General Chris Carr alleged that FES violated the Georgia Fair Business Practices Act by operating an illegal credit repair business and using unlawful and deceptive practices in a multilevel marketing structure. The practice of credit repair is generally illegal in Georgia, although some entities, including non-profit 501(c)(3) organizations, are exempt from this statute. This Office maintained that FES tried to mislead consumers and circumvent state and federal credit repair laws by affiliating with a non-profit organization that the Defendants themselves managed and directed. We also alleged that FES violated Georgia law by requesting and accepting payment from consumers for its credit repair services before those services were provided.

    The Attorney General further alleged that FES violated the Georgia Multilevel Distribution Companies Act (MLDCA) by selling its credit repair products through a multilevel marketing scheme in which agents primarily earned money through the continued recruitment of other participants, rather than through the sale of products to non-participating consumers. To become an agent, an individual generally paid an upfront administrative fee of $199 plus monthly payments of $89.  FES allegedly provided bonuses and commissions that were often based purely on the activities of a downline agent, even when the principal agent had performed no bona fide supervisory, selling or soliciting function to the consumer.  Additionally, some FES agents were allegedly engaging in the following unlawful and deceptive practices:

    • “Self-consumption” – Agents paid other people to enroll with FES as agents or offered potential agents discounts in an attempt to grow the original FES agent’s downline.
    • “Downline loading” – Agents signed up an individual for the FES agent’s downline without that individual’s knowledge and with no intention of the individual even becoming an active FES agent.
    • “Cross-line recruitment” – Active agents poached an inactive FES agent from an unrelated FES downline to the active agent’s company in an attempt to grow the active agent’s downline.

    FES agreed to a Consent Judgment to resolve these allegations. FES

    • Paid $1 million in civil penalties to the State.
    • Is enjoined from advertising, offering or selling credit repair services in the State of Georgia or creating the perception that their independent sales agents have an affiliation with another entity to advertise, offer, or sell credit repair. 
    • Must:
      • Mandate and ensure that its independent sales agents comply with the MLDCA statutory provisions related to compensation structure and supervisory activity of downlines;
      • Cease from engaging in the unlawful practices of “self-consumption,” “downline loading,” and “cross-line recruitment”;
      • Revise all materials, policies and procedures related to independent sales agents to ensure compliance with the Consent Judgment;
      • Update policies and procedures to outline steps to warn, fine, suspend or terminate independent sales agents who violate the Fair Business Practices Act or the Consent Judgment; and  
      • Pay an additional $750,000 penalty to the State if FES violates the terms of the settlement in the future.
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  • L.C. Maxwell and Associates, Inc. and Albert Coston, individually

    Attorney General Carr alleged that this debt collection company and its owner, Albert Coston, violated both the Fair Business Practices Act and the Fair Debt Collection Practices Act.  Carr charged that the parties represented that they had authority to collect on consumers’ debt when, in fact, they had reason to believe that statement was not true for a portfolio of accounts which they had purchased from an unidentified seller on Craigslist who provided no supporting documentation demonstrating ownership or validity of the debts.  

    They further violated consumer protection laws by:

    • Failing to send written notice validating the debt to consumers within five (5) days of their initial communication with the consumer;
    • Using false representations or deceptive means to collect or attempt to collect a debt;
    • Threatening to take actions that could not have been taken legally or that were not intended to be taken; and
    • Failing to disclose to consumers that they were attempting to collect a debt and that any information obtained would be used for that purpose.  

    The company, and Coston in his individual capacity, entered into a Consent Judgment with this Office, in which they agreed to:

    • Cease and refrain from all debt collection practices in the future;
    • Cease collection on the company’s debt portfolio, which consisted of 149,960 accounts with an alleged value of approximately $113.5 million dollars;
    • Refrain from selling or transferring the 149,960 accounts to any person or entity (other than the Attorney General);
    • Transfer the accounts described above to the Attorney General; and
    • Pay a $250,000 penalty to the State of Georgia.
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  • Quality Recovery Services, Inc., co-owner Daniel G. Lee, individually, and co-owner Clifton C. Truman, individually

    This Office alleged that the parties violated the Fair Business Practices Act and the Fair Debt Collection Practices Act by:

    • Attempting to collect debts on behalf of original creditors without obtaining any express written authority to do so and/or an assignment of the right to collect debts;
    • Attempting to collect debts from consumers without having a reasonable basis for representing that such debts were actually owed;
    • Threatening to take action that was not intended to be taken;
    • Sending written notices to consumers even though they knew that the addresses were invalid or improper and that consumers might not actually receive the notices;
    • Failing to send consumers written notice containing the name of the creditor to whom the debt was owed;
    • Furnishing information to credit reporting agencies even though they knew and/or had reasonable cause to believe that the information was incorrect; and
    • After receiving notice from consumers disputing the debt, failing to investigate the matter, and/or to update or delete inaccurate information with credit reporting agencies.

    In resolution of these allegations, the company and co-owners entered into an Assurance of Voluntary Compliance with the Attorney General requiring them to:

    • Comply with the Fair Business Practices Act and the Fair Debt Collection Practices Act;
    • Cease and refrain from making any material misrepresentation to collect or attempt to collect a debt;
    • Cease and refrain from furnishing information to any consumer reporting agency relating to any consumer before communicating with said consumer about the debt;
    • Cease and refrain from furnishing erroneous or inaccurate information to any consumer reporting agency if they have knowledge of errors or have reasonable cause to believe the furnished information is inaccurate;
    • Request removal of all information previously furnished to credit reporting agencies with respect to 847 identified consumers within sixty (60) days; and
    • Pay a $12,000 civil penalty. If the parties fail to comply in full with the terms of the settlement, they are required to pay an additional penalty.
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  • Above 701, Inc., along with its sole owner and operator, Darius Williams (collectively referred to as ‘Above 701’)...

    ...entered into a settlement with the Attorney General to resolve allegations that they operated an illegal credit repair business in violation of the Georgia’s Fair Business Practices Act and the Credit Repair Statute.  According to Georgia law, the practice of credit repair, which is the marketing or selling of services aimed at improving a buyer’s credit record, history or rating, with unpredictable results, is generally illegal in the State of Georgia. We also alleged that Above 701 violated Georgia law by:

    • Requesting and accepting payment from consumers for its “credit repair” services before those services were provided; and
    • Making misleading claims that it could get bankruptcies and debts permanently deleted from consumers’ credit reports, without adequately disclosing that negative credit information cannot be erased from a consumer’s credit report if the information is accurate.

    The company and its owner entered into a Consent Judgment agreeing to:

    • Cease all current business operations in the State of Georgia;
    • Cease from advertising, offering, selling or engaging in credit repair services in the State of Georgia or to Georgia residents;
    • Act in full compliance with Georgia’s Fair Business Practices Act;
    • Refund $110,000 as restitution to 102 consumers;
    • Pay a $25,750 civil penalty to the State; and
    • Pay an additional penalty to the State if the terms of the settlement were not met.
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  • G&G Success, LLC d/b/a YF Solution, LLC (‘YF Solution’) and Grace M. De Paz, individually

    CPD alleged that this Florida business violated the Fair Business Practices Act and Georgia’s debt adjustment statute. YF Solution allegedly charged Georgia consumers thousands of dollars each to transfer existing credit card debt to new credit cards with lower interest rates, which consumers could essentially have done on their own for free. The company, which is owned solely by De Paz, made broad claims about how much savings they could guarantee a consumer but did not provide the details about the type of accelerated payment plan these savings were based on until after consumers purchased the company’s services, if at all.

    Georgia’s Debt Adjustment Act requires companies offering debt adjustment services to file annual insurance information and audit records with the Attorney General, and to cap all fees for its services at no more than 7.5% of the amounts paid monthly by consumers for distribution to their respective creditors.  Collected monies must be maintained in separate escrow accounts per consumer, and disbursed to creditors within thirty (30) days.  

    YF Solution charged significantly more than 7.5% fee permitted and failed to provide the Attorney General with any of the documentation required by law.  The company and De Paz entered into a settlement that required them to cease all debt adjustment/settlement services in Georgia and to provide $56,290 in restitution to the 22 Georgia consumers who paid for services but have not yet received a refund.  The settlement also required the Respondents to pay a $20,000 civil penalty. 

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Medical – Marketing, Advertising and Sales Practices

  • Ongoing Opioid Litigation

    Georgia Attorney General Chris Carr filed a lawsuit against opioid manufacturers and distributors to seek justice for their alleged role in fueling the opioid crisis and its catastrophic effects on Georgia citizens.  The lawsuit alleges that, in an effort to increase opioid use and thereby increase profits, the named opioid manufacturers embarked on a false and deceptive marketing campaign that grossly understated the dangerous addiction risks of opioids, while overstating their benefits.  The complaint also alleges that to promote and add credibility to these false and deceptive claims, the named manufacturers used front groups and key opinion leaders appearing to be independent and unbiased third parties but who were actually paid and controlled by the opioid manufacturers. 

    The lawsuit also alleges that the named opioid distributors supplied, sold and placed into the stream of commerce prescription opioids, without fulfilling their legal obligations to monitor, detect, report, investigate or otherwise prevent the fulfillment of suspicious orders.  This behavior led to the predictable diversion of these dangerous drugs for illegitimate and/or non-medical purposes.  The civil action seeks damages, injunctive relief and restitution for Defendants’ conduct.

    More information about the opioid problem, and the Attorney General’s actions in his effort to fight the opioid epidemic can be found at https://law.georgia.gov.

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  • Johnson & Johnson and DePuy 

    Chris Carr and 45 other Attorneys General negotiated a $120 million Consent Judgment with Johnson & Johnson and DePuy to resolve allegations that DePuy unlawfully promoted its metal-on-metal hip implant devices, the ASR XL and the Pinnacle Ultamet.  The Attorneys General alleged that DePuy made claims in the promotion of these devices as to the longevity (also referred to as “survivorship”) of metal-on-metal hip implants.  Some patients who required hip implant revision surgery to replace a failed ASR XL or Pinnacle Ultamet implant had experienced persistent groin pain, allergic reactions, tissue necrosis, as well as a build-up of metal ions in the blood. 

    The ASR XL was recalled from the market in 2010.  DePuy discontinued its sale of the Pinnacle Ultamet in 2013.

    As part of the Consent Judgment, DePuy agreed to reform how it markets and promotes its hip implants.  Under the Consent Judgment, DePuy must:

    • Base claims of survivorship, stability or dislocations on scientific information and the most recent dataset available from a registry for any DePuy hip implant device;
    • Maintain a post market surveillance program and complaint handling program;
    • Update and maintain internal product complaint handling operating procedures including the training of complaint reviewers;
    • Update and maintain processes and procedures to track and analyze product complaints that do not meet the definition of Medical Device Reportable Events;
    • Maintain a quality assurance program that includes an audit procedure for tracking complaints regarding DePuy Products that do not rise to the level of a Medical Device Reportable Event but that may indicate a device-related serious injury or malfunction; and
    • Perform quarterly reviews of complaints and if a subgroup of patients is identified that has a higher incidence of adverse events than the full patient population, determine the cause and alter promotional practices as appropriate. 

    Under the multistate settlement, the State of Georgia received $3,007,253.13

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  • Premiere Dermatology & Surgery, LLC, Boutté Contour Surgery & Dermatology, P.C., Aesthetic Laser & Boutique, Inc., and their owner, Windell Davis-Boutté (collectively referred to as ‘Premiere Dermatology’)

    These companies and their owner Boutté entered into a resolution with the Attorney General’s Office in response to allegations regarding misrepresentations of Boutté’s medical certifications and the failure to provide refunds for paid cosmetic surgery procedures that were never actually performed.  On June 7, 2018, the Georgia Composite Medical Board indefinitely suspended the medical license of Boutté, dubbed the “dancing doctor” by the media.

    CPD’s investigation revealed that Premiere Dermatology’s websites and advertising materials represented that Boutté was “board certified” in “surgery,” “cosmetic surgery” and “skin surgery,” when in actuality, Boutté was certified only as a “dermatologist” under the American Board of Dermatology (ABD). The ABD does not issue certifications or sub-certifications for surgery, skin surgery or cosmetic surgery. This Office also alleged that the website contained false or unsubstantiated representations concerning Boutté and her staff’s affiliations and qualifications. Lastly, Premiere Dermatology allegedly refused to refund payments made by consumers for surgeries unperformed after Boutté’s medical license was suspended.

    The Consent Judgment required Premiere Dermatology to pay $190,000 in consumer restitution and prohibited the entities from making false or misleading statements concerning Boutté and her staff’s qualifications.  Future violations of the Consent Judgment will subject them to an additional $680,000 civil penalty.

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  • Johnson & Johnson Services, Inc. and its subsidiary Ethicon, Inc.

    The Georgia Attorney General’s Office was part of a multistate settlement along with 40 states and the District of Columbia requiring Johnson & Johnson and its subsidiary Ethicon, Inc. to pay nearly $116.9 million for their deceptive marketing of transvaginal surgical mesh devices. The multistate investigation found the companies violated state consumer protection laws by misrepresenting the safety and effectiveness of the devices and by failing to sufficiently disclose risks associated with their use.

    The investigation found the companies misrepresented, or failed to adequately disclose, the products’ possible side effects, including the risk of chronic pain and inflammation, mesh erosion, incontinence developing after surgery, and scarring.  Evidence shows the companies were aware of the possibility for serious medical complications but did not provide sufficient warnings to consumers or surgeons who implanted the devices.

    Under the settlement, Johnson & Johnson agreed to pay $116.86 million to the 41 participating states and District of Columbia.  The State of Georgia received $3,375,570.03. The settlement also required full disclosure of the device’s risks and accurate information on promotional materials, in addition to the product’s “information for use” package inserts.

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  • Devotion Medical Supply, Inc. (‘Devotion’), Durable Medical Supply, Inc. (‘Durable’) and former Chief Executive Officer, Simon Orobor, individually

    Back braces, wrist braces, orthotics, portable oxygen, and suspension sleeves are a few examples of products classified by the federal government as Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (hereinafter “DMEPOS”).  Devotion and Durable sold DMEPOS products for a number of years to Medicare recipients.  The crux of the complaints against these companies was that consumers, primarily elderly and disabled adults, received unsolicited medical supplies from these companies (which subsequently billed Medicare) and the consumers were unable to return and/or stop the unordered and unwanted shipments. 

    During the course of the investigation, CPD learned that Devotion and Orobor would process, ship to consumers, and bill Medicare based on leads provided by third-party marketing companies. Once consumers received the goods, many of them claimed they did not order the products and attempted to contact the business to return the products. The businesses did not resolve the consumers’ complaints and eventually began ignoring calls from consumers, all the while continuing to process new orders. On the rare occasion a consumer was able to reach a business representative, the business failed to answer questions about how the order was initiated or processed.

    The negotiated settlement required the companies and Orobor to, among other things, cease from advertising, offering, selling, shipping or billing any entity for DMEPOS or similar goods.  The two companies, Devotion and Durable, were dissolved.  Additionally, the parties paid $15,000 in civil penalties.

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Automotive – Sales and Advertising

  • Robert Bosch GmbH and Robert Bosch LLC (collectively referred to as ‘Bosch’)

    Bosch is a multinational engineering company that is also a major supplier to the global automotive industry. Among the products Bosch supplies to its auto manufacturing customers are the electronic control units (“ECUs”) that house the complex software that controls nearly all aspects of an engine’s performance, including emissions systems.

    Chris Carr, along with the Attorneys General of 49 other states, commonwealths and territories, was part of a multistate group that investigated Bosch in connection with the emissions of diesel passenger vehicles sold and offered for sale by various vehicle manufacturers. After it was discovered that Volkswagen, a Bosch customer, systematically utilized defeat device software in its diesel vehicles, the multistate group commenced a separate investigation into Bosch’s role in enabling its manufacturer customers to potentially violate federal and state emissions regulations.  Another Bosch customer, Fiat Chrysler, recently settled claims that it too employed illegal defeat devices (discussed below).

    The Attorneys General alleged that Bosch facilitated the implementation of the defeat device software in more than 600,000 Volkswagen and Fiat Chrysler vehicles over a period that spanned more than a decade.  Notwithstanding concerns about the illegality of the devices raised internally, to management, and externally, to Volkswagen and Fiat Chrysler, the Attorneys General alleged that Bosch continued to assist these customers as they implemented the defeat devices and concealed their gross misconduct from regulators and the public.

    Bosch agreed to a Consent Judgment that required it to maintain robust processes to monitor compliance and to refuse to accommodate requests for software development and programming that could result in the installation of defeat device software. 

    Bosch also agreed to pay the State of Georgia $3,549,240 in exchange for release of the State’s consumer and environmental claims.

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  • FCA US LLC, Fiat Chrysler Automobiles N.V., VM Motori S.p.A., and VM North America, Inc. (collectively referred to as ‘Fiat Chrysler’)

    Attorney General Carr alleged that Fiat Chrysler installed unlawful defeat device software and undisclosed Auxiliary Emissions Control Devices (“AECDs”) in model year 2014-16 Jeep Grand Cherokee and Ram 1500 diesel vehicles that the automaker sold in Georgia.  The Office further alleged that the vehicles emitted higher than permitted levels of harmful nitrogen oxides (NOx) in real-world driving conditions, and misled consumers by falsely claiming the “Eco-Diesel”-branded Jeep SUVs and Ram 1500 trucks were environmentally friendly and compliant with the law in all 50 states. 

    Fiat Chrysler agreed to a Consent Judgment requiring it to pay the State of Georgia more than $1,600,625 in civil penalties for deceptively and unfairly marketing, selling and leasing the vehicles to consumers. The settlement also prohibited the manufacturer Fiat Chrysler from engaging in future unfair or deceptive acts and practices in connection with its dealings with consumers, and required the company to carry out its obligations under a related settlement agreement in the Multidistrict Litigation (“MDL Consumer Settlement”) in the U.S. District Court for the Northern District of California.  The MDL Consumer Settlement resolved claims brought by a national class of affected consumers.  The MDL Consumer Settlement required Fiat Chrysler to: 

    • Eliminate the defeat device features from the relevant software through a software “flash fix”;
    • Provide extended warranties to eligible owners and lessors; and,
    • Together with co-defendant Bosch, pay eligible owners who take their vehicle to an authorized dealer for the software repair an average restitution of approximately $2,908 and pay lessees and former owners who do so restitution of $990. 

    Related settlements between Fiat Chrysler and the United States Department of Justice, the Environmental Protection Agency, the California Air Resources Board and the State of California also require Fiat Chrysler to make available 200,000 upgraded catalytic converters to mitigate air pollution across the country when installed by Fiat Chrysler vehicle owners as replacements to their existing catalytic converters.

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  • Used Imports Auto, LLC and its owner, Jonaid Malik, individually

    CPD alleged that this used car dealership represented that the vehicles it sold had been certified by their mechanics and had been subjected to a “rigorous 80 point full inspection,” when, in fact, the company had failed to perform safety recall-related repairs and/or failed to clearly and conspicuously disclose the existence of these outstanding recalls. We further alleged that the dealership implied that vehicles it sold had not been involved in an accident and were structurally sound, when, in fact, certain vehicles had been involved in serious and significant collisions. Lastly, we alleged that the dealership failed to include “doc fees” in its prices advertised to consumers, thereby making the price of the vehicle appear less than it was in reality.

    The Respondents entered into an Assurance of Voluntary Compliance, which required them to pay $1,275 in restitution to consumers, to pay $15,000 in civil penalties, legal and investigative fees, and to comply with the Fair Business Practices Act.  

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  • Hutchinson Automotive, Inc. d/b/a Hutchinson Buick GMC and Hutchinson K. Motors, LLC d/b/a Hutchinson Kia of Albany 

    These franchise new car dealerships allegedly distributed thousands of mailers that represented that consumers could terminate vehicle notes with up to $8,000 of negative equity by simply paying a $79 fee and offering these vehicles as trade-ins.  The dealerships failed to disclose any material terms for the offer, but more significantly, few, if any, consumers actually qualified for the heavily advertised offer.  In addition, Hutchinson Kia advertised a “Scratch and Win” promotion wherein mailer recipients were told to visit the dealership to claim any number of potential prizes.  While only one consumer actually received the “grand prize” new Kia vehicle, every mailer’s scratch off revealed a picture of a vehicle strongly suggesting that every mailer recipient had won the new vehicle, when that was not the case.  The mailer also allegedly violated Georgia’s statutory provisions that detail the manner in which the odds of winning and the value of prizes must be disclosed.  In addition, the Hutchinson Buick dealership sold a 2018 vehicle to a consumer as “new” when the dealer had previously titled the same vehicle to a retail consumer just a month before.  The vehicle did not qualify for the designation “new” under Georgia law since it had been titled previously.  

    The negotiated settlement required the companies to pay $15,000 in penalties and fees.  Hutchinson Buick also addressed the matter in which a vehicle has been sold as new when it, in fact, was not by placing the consumer in a like 2019 vehicle that was actually “new” and crediting all past payments on the 2018 vehicle to the new 2019 vehicle. 

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Data Breach

  • Equifax Inc.

    The Georgia Attorney General led a multistate investigation, along with 47 other states, the District of Columbia and the Commonwealth of Puerto Rico, in response to the 2017 Equifax data breach, which compromised sensitive information of more than 147 million consumers. The investigation, which was the largest data breach enforcement action in history, found that Equifax’s failure to maintain a reasonable security system enabled hackers to penetrate its systems, exposing the data of 56 percent of American adults.  It is estimated that approximately 5.4 million Georgians were impacted. The Attorneys General secured a settlement with Equifax that included a Consumer Restitution Fund of up to $425 million, a $175 million payment to the states and injunctive relief, which also includes a significant financial commitment.

    The investigation found that the breach occurred because Equifax failed to implement an adequate security program to protect consumers’ highly sensitive personal information. Despite knowing about a critical vulnerability in its software, Equifax failed to fully patch its systems. Moreover, Equifax failed to replace software that monitored the breached network for suspicious activity. As a result, the attackers penetrated Equifax’s system and went unnoticed for 76 days.

    Under the terms of the settlement, Equifax agreed to provide a single Consumer Restitution Fund of up to $425 million—with $300 million dedicated to consumer redress. If the $300 million is exhausted, the Fund can increase by up to an additional $125 million. The company will also offer affected consumers extended credit-monitoring services for a total of 10 years.

    Equifax agreed to take steps to assist consumers who are either facing identity theft issues or who have already had their identities stolen, including:

    • Making it easier for consumers to freeze and thaw their credit;
    • Making it easier for consumers to dispute inaccurate information in credit reports; and
    • Maintaining sufficient staff dedicated to assisting consumers who may be victims of identity theft. 

    Equifax also agreed to strengthen its security practices going forward, including, among other things:

    • Reorganizing its data security team;
    • Minimizing its collection of sensitive data and the use of consumers’ Social Security numbers;
    • Performing regular security monitoring, logging and testing;
    • Employing improved access control and account management tools;
    • Reorganizing and segmenting its network; and
    • Reorganizing its patch management team and employing new policies regarding the identification and deployment of critical security updates and patches. 

    Equifax also agreed to pay the states a penalty of $175 million, $7,181,455.28 of which was paid to Georgia.

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Other Unfair and Deceptive Practices

  • Career Education Corp. (‘CEC’)

    A for-profit education company based in Schaumburg, Illinois that offers primarily online courses through American InterContinental University and Colorado Technical University.  CEC has closed, or phased out, many of its schools over the past 10 years.  Its brands included Briarcliffe College, Brooks Institute, Brown College, Harrington College of Design, International Academy of Design & Technology, Le Cordon Bleu, Missouri College and Sanford-Brown. 

    A group of Attorneys General, including Chris Carr, launched an investigation into the practices of CEC in January 2014 after receiving complaints from students and receiving a report issued by the U.S. Senate’s Health, Education, Labor and Pensions Committee that was critical of the for-profit education business model.  That investigation revealed evidence that CEC:

    • Used emotionally charged language to pressure students into enrolling in CEC’s schools;
    • Deceived students about the total costs of enrollment by instructing its admissions representatives to inform prospective students only about the cost per credit hour without disclosing the total number of required credit hours;
    • Misled students about the transferability of credits into CEC from other institutions, and out of CEC to other institutions by promising on some occasions that credits would transfer;
    • Misrepresented the potential for students to obtain employment in a field by failing to adequately disclose the fact that certain programs lacked the necessary programmatic accreditation; and,
    • Deceived prospective students about the hiring rate for graduates of CEC programs within their field of study, thereby giving prospective students a distorted and inaccurate impression of CEC graduates’ employment outcomes. For instance, CEC inaccurately claimed that its graduates who worked only temporarily or who were working in unrelated jobs were “placed.”

    As a result of the unfair and deceptive practices described above, students enrolled in CEC who would not have otherwise enrolled, students could not obtain professional licensure, and they were saddled with substantial debts that they could not repay nor discharge in bankruptcy.

    CEC entered into a multistate settlement with Attorney General Carr and 48 other Attorneys General in which it agreed to reform its recruiting and enrollment practices.  It agreed to:

    • Refrain from misrepresentations concerning accreditation, selectivity, graduation rates, placement rates, transferability of credit, financial aid, veterans’ benefits, or licensure requirements.
    • Not enroll students in programs that do not lead to state licensure when required for employment, or that due to their lack of accreditation, will not prepare graduates for jobs in their field.  For programs that will prepare graduates for some but not all jobs, CEC is required to disclose such to incoming students.  
    • Provide a single-page disclosure to each student that includes: a) anticipated total direct cost; b) median debt for completers; c) programmatic cohort default rate; d) program completion rate; e) notice concerning transferability of credits; f) median earnings for completers; and g) the job placement rate.
    • Require students before enrolling to complete an Electronic Financial Impact Platform Disclosure, which provides specific information about debt burden and expected post-graduation income.
    • Not engage in deceptive or abusive recruiting practices, and record online chats and telephone calls with prospective students. CEC shall analyze these recordings to ensure compliance.
    • Require incoming undergraduate students with fewer than 24 credits to complete an orientation program before their first class that covers study skills, organization, literacy, financial skills, and computer competency. During the orientation period, students may withdraw at no cost.  
    • Establish a risk-free trial period.
      • All undergraduates who enter an online CEC program with fewer than 24 online credits can withdraw within 21 days of the beginning of the term without incurring any cost.
      • All undergraduates who enter an on-ground CEC program can withdraw within seven days of the first day of class without incurring any cost.

    CEC further agreed to forgo collecting approximately $493.7 million in debts owed by 179,529 students nationwide. In Georgia, 16,654 students will obtain relief totaling more than $48 million dollars. 

    CEC has also agreed to pay $5 million to the states, of which Georgia’s share is $50,000.   

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  • Factory Buys Direct.com, Inc. (‘FBD’)

    An online seller of home appliances. This company entered into an Assurance of Voluntary Compliance with the Attorney General’s Office to resolve allegations that it violated Georgia’s Fair Business Practices Act by selling products, including damaged or defective appliances, backed by a return policy it did not honor.  We alleged that through its website, factorybuysdirect.com, FBD sent products to consumers that were incorrect, unwanted, damaged or defective and did not respond to requests by consumers who sought replacements or refunds. Despite website statements of “Customer Satisfaction Guaranteed” and “30 Day Money Back Guarantee,” the company allegedly did not make it clear to consumers that if they returned a product they would have to pay a 15% restocking fee plus return shipping, and that the company only accepted returns for merchandise that is new, unused, unassembled and in its original packaging. 

    The settlement required FBD to:

    • Refund any restocking fees paid in order to return or exchange a product purchased from FBD and/or any fees deducted from a refund for shipping costs for orders with free shipping, for all Georgia consumers who placed an order on www.factorybuysdirect.com between April 1, 2016 and January 11, 2019;
    • Pay $10,000.00 to fund a Consumer Restitution Trust Account, to be administered by the Attorney General, for consumers who attempted to return or exchange a product from FBD but were not able to do so due to the company’s failure to comply with its stated return policy;
    • Pay $15,000 to the State of Georgia;
    • Disclose in a clear and conspicuous manner its complete return, refund, and exchange policies including all material terms, conditions, and limitations;
    • Comply with its stated return, refund, and/or exchange policies, and implement sufficient customer support procedures so that it can process consumers’ return/refund/exchange requests as required by its stated policies;
    • Refrain from making any price or value representations that are false or misleading; and
    • Comply with Georgia consumer protection laws.
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  • Student CU Connect CUSO, LLC  (‘CUSO’)

    In 2019,thisOffice secured $4,171,314.43 in debt relief for 471 former ITT Tech students in Georgia as part of a multistate settlement with CUSO, the company which had offered loans to finance students’ tuition at ITT Tech, a failed for-profit college. Together, Attorneys General from 43 states and the District of Columbia participated in this multistate settlement.  Nationally, the settlement obtained debt relief of more than $168 million for 18,664 former ITT students.  The CUSO loan program originated approximately $189 million in student loans to ITT students between 2009 and 2011.

    A related settlement between CUSO and the U.S. Bankruptcy Trustee was approved on June 14, 2019. This settlement was also contingent on federal court approval of a related settlement between CUSO and the federal Consumer Financial Protection Bureau, which was announced on June 14, 2019. 

    The Attorneys General alleged that ITT, with CUSO’s knowledge, offered students “temporary credit” upon enrollment to cover the gap in tuition between federal student aid and the full cost of the education. The student was obligated to repay the temporary credit before the student’s next academic year, although ITT and CUSO knew or should have known that most students would not be able to repay the temporary credit when it became due. Many students complained that they thought the temporary credit operated like a federal loan and would not be due until 6 months after they graduated. When the temporary credit did become due, however, ITT pressured and coerced students into accepting loans from CUSO, many of which carried high interest rates, far in excess of federal loan rates. Pressure tactics used by ITT included pulling students out of class and threatening to expel them if they did not accept the loan terms. Because students were left with the choice of dropping out and losing any benefit of the credits they had earned (ITT’s credits would not transfer to most other schools), most students enrolled in the CUSO loans. Neither ITT nor CUSO made students aware of the true cost for repayment for the temporary credit until after the credit was converted to a loan. Not surprisingly, the default rate on the CUSO loans was extremely high (projected to exceed 90 percent) due to both the high cost of the loans as well as the lack of success ITT graduates had getting jobs that earned enough to make repayment feasible. The defaulted loans continued to affect students’ credit ratings and were usually not dischargeable in bankruptcy.

    Under the settlement, CUSO agreed to forego collection of the outstanding loans. CUSO, which had been organized for the sole purpose of providing the ITT loans, also ceased doing business. Under the redress plan, CUSO’s loan servicer sent notices to borrowers about the cancelled debt and terminated automatic payments plans. The settlement also required CUSO to supply the credit reporting agencies (TransUnion, Experian and Equifax) with information to update credit information for affected borrowers. 

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  • The BrownGirls Experience and its owner and operator, Cemaka Means (a/k/a Cemaka Zeigler, Nikki Means, or Nikki Nicole)...

    ...Have entered into a settlement with the Georgia Attorney General.  The parties agreed to refund consumers who paid to participate as models in, or to attend, “BrownGirls Experience Tour” modeling events across the United States and the Caribbean that either were canceled or did not take place.  

    This Office alleged that, in 2017 and 2018, BrownGirls Experience and Means advertised modeling events around the country and abroad entitled the “BrownGirls Experience Tour.” They used social media, email, and ticket sales websites to advertise 22 different locations at which the BrownGirls Experience Tour events were to take place. In addition to selling tickets to these events, the parties collected a $30 fee from consumers who wanted to participate in the event as models and receive a T-shirt. However, only the Atlanta, Charlotte, and Nashville events actually occurred. The remaining 19 events allegedly never took place, and many consumers who bought tickets, or paid, to participate in those events had not received refunds.

    In resolution of these allegations, the BrownGirls Experience and Means agreed to pay restitution to consumers who paid to attend, or participate in, events that never occurred and for which they were never refunded and to pay $5,700 in civil penalties to the State.  Furthermore, Means and the BrownGirls Experience agreed to cease doing any type of business in the State of Georgia.

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  • The Pup Collection, LLC d/b/a PupSocks

    An online retailer located in Georgia that specializes in customizable items such as socks and ties with images of pets on them. Consumers made several types of allegations against PupSocks, the most common of which was that PupSocks failed to ship consumers’ orders according to the production time represented and failed to contact consumers regarding shipping delays. Many consumers alleged that they never received their item or a refund, even after complaining to the business. Consumers also alleged that PupSocks shipped items with incorrect images or of incorrect sizes, and that items received were of extremely poor quality.

    The company entered into a negotiated settlement with the Attorney General that required PupSocks to comply with the Fair Business Practices Act and the Federal Trade Commission’s Merchandise Rule, and to pay a civil penalty of $15,000.  Future violations of the settlement or consumer protection laws will subject the company to an additional $50,000 penalty.

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  • Grand Project Construction, Inc. d/b/a Precision Pools and Spas, and CEO and owner John H. Barrow III

    An investigation into the practices of this company revealed that Precision Pools requested large payments ranging from $15,000 to $60,000 from consumers prior to pool installation. After collecting the money, the business allegedly failed to complete (or in some cases, even begin) the work or obtain the proper permits from local authorities.  Some consumers, many of whom are senior citizens, were forced to hire another company to complete the work at additional expense, while fielding calls from suppliers and subcontractors of Precision Pools who had not been paid by the CEO-owner, Barrow.  Precision Pools also advertised certifications and a “2 million dollar insurance policy” that were challenged by his third-party vendors.

    The company and owner Barrow entered into an Assurance of Voluntary Compliance requiring them to pay $190,801.80 in consumer refunds and $30,000 to the State of Georgia as a civil penalty. The settlement also prohibits the parties from:

    • Advertising, offering or selling goods or services related to pool design, pool construction, and/or pool repair; or
    • Engaging in pool design, pool construction, and/or pool repair.

    The settlement further restricts Barrow, should he work in the pool industry in the future, to work only as an employee or agent, and under the direct supervision of another.

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  • Federal Safety Compliance Center, Inc. (‘FSCC’) and Samantha Cherry, individually

    The Attorney General alleged that in the course of its marketing and sales of Occupational Safety and Health Act (OSHA) workplace posters and compliance materials, FSCC implied that it was affiliated with OSHA or another government entity, when it is actually a private company with no such affiliation.  In addition, FSCC allegedly shipped out unsolicited OSHA compliance materials to recipients and then billed the recipients.  It should be noted that OSHA workplace posters are available for free by calling OSHA or visiting its website.

    In resolution of these allegations, FSCC and its owner, president and manager Samantha Cherry, entered into an Assurance of Voluntary Compliance with our Office, requiring them to:

    • Pay $30,000.00 to fund a Consumer Restitution Trust Account, to be administered by the Attorney General, for any entity who
      • Paid for goods that were not requested, or that were requested as a result of FSCC’s deception; or
      • Paid for shipping costs to return goods that were not requested or that were requested as a result of FSCC’s deception;
    • Pay $55,000 in civil penalties to the State;
    • Represent orally and in writing in a clear manner that the company is not affiliated in any manner with OSHA or any other governmental agency;
    • Refrain from shipping goods not actually ordered or requested by the recipient;
    • Refrain from billing for goods unless after express consent of the recipient is received;
    • Refrain from soliciting any entity which is, or should be known is, a governmental entity; 
    • Comply with the Georgia consumer protection laws; and
    • Pay an additional penalty should the Respondents fail to comply with the settlement terms at any time during a monitoring period.
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