Cozen in the News

Cozen O’Connor Adds Privacy, Technology, and Class Action Litigation Depth

• Cozen O’Connor added two significant attorney groups in recent weeks whose niche practices are highly complementary to the work of Cozen’s State Attorneys General Practice.
• Nine attorneys joined the firm from boutique firm Baer Crossey, bringing deep and broad expertise in the areas of technology regulation and data privacy compliance. The incoming attorneys’ client portfolio embraces a wide spectrum of clients from household names to startups such as wearable tech company Kinetic.
• A group of five class action litigators, led by Philadelphia-based Meredith Slawe and Michael McTigue, bring extensive experience in litigating consumer protection issues and supplement the AG Practice’s already formidable presence in this space.
• “There is a parallel between the consumer protection issues that the state attorneys general [practice] is focused on, and the subject of the class actions we defend,” Slawe said. “Privacy is a big issue, mostly at the state and at the federal level, including the collection and use of data, such as credit reporting issues and the collection and retention of consumer data.”

COVID-19

Attorneys General Help Constituents Facing COVID-19-Related Challenges

• Alabama AG Steve Marshall warned nursing home residents who are Medicaid recipients and their families about attempts by nursing homes to seize their stimulus checks, which are not “resources” under federal benefits programs and should not be signed over to the facilities. As previously reported, the Federal Trade Commission (“FTC”) recently issued a similar alert.
• Massachusetts AG Maura Healey announced enhanced resources to better facilitate reporting of workplace safety concerns to the AG’s office as the state implements its phased reopening. The AG’s office created a new online form specifically for reporting unsafe working conditions related to COVID-19, including concerns about hygiene, social distancing, and requiring symptomatic employees to work, among other things.

FTC Continues Efforts to Protect Consumers from COVID-19-Related Scams

• The FTC issued letters to 50 companies warning them to stop making false and unsubstantiated marketing claims that their products can cure or prevent COVID-19. The letters were issued to companies that market a wide variety of products and therapies, including supplements and herbal medicines, acupuncture, nebulizers, pulsed electromagnetic field therapy, and scalar frequencies. As previously reported, the FTC has sent three rounds of similar letters to other marketers in recent weeks.
• The FTC and the Federal Communications Commission (“FCC”) sent joint letters to voice-over-Internet-protocol (“VoIP”) providers Intelepeer Cloud Communications, LLC, PTGi International Carrier Services, Inc., and RSCom Ltd. warning them to cease routing and transmitting illegal COVID-19-related scam robocalls and that failure to stop this activity could result in the FCC authorizing other U.S. providers to block all calls from these VoIP providers, and/or enforcement actions.
• The FTC and the FCC also sent a joint letter to USTelecom – The Broadband Association (“Association”) thanking the Association for identifying the originators of unlawful robocalls and notifying its members that, if any of the identified providers continues to route or transmit such robocalls on its network, the FCC will authorize other U.S. providers to block all calls coming from that provider, among other things. As previously reported, the FTC and FCC also sent similar joint letters to three other VoIP companies and to the Association in April.

Consumer Protection

Broadband as a Right: 39 Attorneys General Urge Congress to Expand Internet Access

• The National Association of Attorneys General (“NAAG”) sent a letter signed by a bipartisan group of 39 AGs to congressional leaders urging them to help ensure that all Americans have home internet connectivity sufficient to participate in telework, telehealth, and online education, as is necessary in the wake of the COVID-19 pandemic.
• The letter lauded the efforts of private companies, including discounting and waiving access fees, but argued that such efforts are not sustainable and congressional action is necessary to ensure that disparities in educational and health outcomes are not further exacerbated by unequal access to internet connectivity, especially if a second wave of the COVID-19 pandemic materializes in the fall.
• The AGs urge Congress to provide expressly dedicated funding to state and local governments and to increase funding to the FCC Universal Service Fund, which provides funding to rural and low-income areas, among other things.

Is It Debt Relief or Is It a Scam? Student Debt Relief Shouldn’t Come with $1000 Fees and Usury Interest

• New York AG Letitia James reached a settlement with student debt relief companies Debt Resolve, Inc., Student Loan Care, LLC, and Progress Advocates, LLC, as well as related individuals (collectively, “Debt Resolve”) to resolve allegations of fraudulent debt relief practices in violation of New York State’s General Business Law and the federal Credit Repair Organization Act, Truth in Lending Act, and Telemarketing Rule, among others.
• According to the complaint, Debt Resolve was allegedly part of a 10-member ring of student debt relief companies that tricked consumers into paying over $1,000 fees for services available for free from the federal government, charged over 20% in interest in excess of the state usury cap, fraudulently claimed affiliation with the government, and promised loan forgiveness they could not provide.
• Under the terms of the proposed stipulated judgment, Debt Relief must pay $250,000 as part of a $5.5 million partially suspended judgment and is barred from debt relief activities and from collecting money from any of its current customers or selling or assigning any debts owed by its customers, among other things.

Not All Ratings Are Created Equal: Comparison Shopping Website Allegedly Falsified Ratings for a Fee

• The FTC settled with comparison shopping website LendEDU, Shop Tutors, Inc., and related individuals (collectively, “LendEDU”) to resolve allegations that LendEDU promoted fake rankings for a fee and posted fake reviews in violation of the FTC Act.
• According to the complaint, the LendEDU website—advertised as providing information about financial products like loans and insurance—allegedly created the false impression that its site provided impartial rankings and objective product information, but in reality offered higher rankings and better product placement for a fee.
• Under the terms of the final decision and order, LendEDU must pay $350,000 to the FTC for consumer redress and is enjoined from misrepresenting the objectivity of the rankings and the effect of compensation on the website’s content, among other things.

Hand in Cookie Jar: FTC Stops Payday Lenders Allegedly Reaching Into Customers’ Bank Accounts Without Authorization

• The FTC sued payday lending companies Lead Express, Inc., Camel Coins, Inc., Sea Mirror, Inc,, Naito Corp., Kotobuki Marketing, Inc., Ebisu Marketing, Inc., Hotei Marketing, Inc., Daikoku Marketing, Inc., La Posta Tribal Lending Enterprise, and related individuals (collectively, “Lead Express”) over allegations that they overcharged consumers and made unauthorized withdrawals from their bank accounts in violation of the FTC Act, Telemarketing Sales Rule, the Truth in Lending Act, and the Electronic Funds Transfer Act.   The U.S. District Court for the District of Nevada has issued a temporary restraining order halting Lead Express’ operations and freezing their assets during the pendency of the lawsuit.
• According to the complaint, Lead Express allegedly used deceptive marketing tactics on websites and through telemarketing to convince consumer that they were signing up for loans with a fixed number of payments. In fact, consumers often found that Lead Express applied their payments to finance charges only without reducing the principal of the loan and continued to withdraw regular finance charge payments after the promised term of the loan had ended. Lead Express also allegedly failed to provide appropriate lending disclosures to consumers and illegally used remotely created checks.
• In addition to the temporary restraining order, the complaint seeks permanent injunctive relief, reformation of contracts, rescission, restitution, disgorgement, and costs.