Expensive Pets: Scammer Sells Badly Behaved Puppies as Highly Trained Service Dogs

• Virginia AG Mark Herring reached a settlement with service dog company Service Dogs by Warren Retrievers, Inc. and its owner (collectively “SDWR”) to resolve allegations that it misled consumers about the skills, training, and abilities of its purported service dogs, among other things, in violation of the Virginia Consumer Protection Act and the Virginia Solicitation of Contributions law.
• The complaint alleged that SDWR charged between $18,000 and $27,000 for dogs marketed as service dogs, such as diabetic alert dogs, autism service dogs, and seizure response dogs, but in reality it often sold poorly trained puppies that did not have the requisite training and skills to perform the duties of a service dog. The complaint also alleges that SDWR misled consumers about the financing terms of their purchase and solicited contributions without appropriate registration, among other things.
• Under the terms of the consent judgment, SDWR is subject to a judgment of over $3 million, including approximately $514,000 for consumer restitution, $1.4 million to the Commonwealth as trustee for the benefit of charitable organizations, $822,500 in civil money penalties, and $279,000 in attorneys’ fees and costs. The judgment will be partially suspended, and SDWR’s owner will only pay $40,000 toward consumer restitution provided he complies with the judgment’s injunctive relief, which includes lifetime bans on soliciting charitable donations and being involved with any entity that works with companion or agricultural animals, among other things.

Debt Collector’s Alleged Failure to Conduct Due Diligence and Ensure Accuracy in Credit Reporting Leads to $850,000 Settlement

• The Consumer Financial Protection Bureau (“CFPB”) reached a settlement with debt collection company Fair Collections & Outsourcing Holdings, Inc. and its owner and related entities (collectively “FCO”) to resolve allegations that FCO attempted to collect debts without adequate due diligence on the accuracy of the debt account information and that it furnished inaccurate information to credit reporting agencies, conduct which violated the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the Fair Credit Reporting Act and its implementing regulation, Regulation V.
• The complaint alleged, among other things, that FCO attempted to collect on debts without having a reasonable basis for asserting that consumers owed those debts and that it failed to conduct reasonable investigations of consumer disputes of debts, resulting in inaccurate information remaining on consumers’ credit reports. In addition, the complaint alleged that FCO did not have reasonable policies and procedures in place to ensure the integrity and accuracy of information it furnished to credit reporting agencies.
• Under the terms of the proposed stipulated order, FCO will pay a civil money penalty of $850,000 to the CFPB. FCO also agreed to implement reasonable policies and procedures regarding the accuracy and integrity of the information it furnishes to credit reporting agencies, establish an identity theft report review program to properly address consumer reports of identity theft, and establish policies and procedures to evaluate the quality and completeness of received account information prior to commencing collections. In addition, FCO will be required to retain an independent consultant approved by the CFPB to conduct a review of FCO’s information-furnishing and debt-collection activities, among other things.

FTC Supports Increasing Competition Among Debit Card Processors

• The Federal Trade Commission (“FTC”) sent a comment to the Board of Governors of the Federal Reserve System (“Fed”) urging the Fed to strengthen implementation of debit-card fees and routing reforms to the Electronic Fund Transfer Act (“EFTA”) to increase competition among debit card processing networks through the Fed’s proposed clarification of EFTA’s implementing regulation, Regulation II.
• According to the FTC, debit cards are used almost twice as often as credit cards in the United States, and merchants must pay fees to debit card issuers when they accept debit card payments. Merchants often cannot select low-fee payment processing networks unless the issuer accepts those networks, and a lack of competition drives up transaction costs for consumers. The FTC’s comment further notes that the Dodd-Frank Wall Street Reform and Consumer Protection Act amended EFTA to promote competition among debit card processing networks by requiring that issuers provide merchants with a choice of at least two networks for processing electronic debit transactions.
• The comment endorses the Fed’s proposed rule, which clarifies that EFTA’s requirement for network choice applies to all debit-card transactions, regardless of whether a physical debit card is used or whether it is a remote transaction, such as electronic or pay-by-phone payments. In addition, the FTC’s comment calls on the Fed to engage in rulemaking to stop processing networks from creating routing-based incentives for issuers to evade Regulation II’s mandate for providing a choice of two unaffiliated networks.

Debt Collector Pays $1.6 Million Over Allegations of Too-Frequent Collections Calls and Inadequate Notices to Debtors

• Massachusetts AG Maura Healey reached a settlement with online short-term installation loan servicer Avant, LLC and related entities (collectively “Avant”) to resolve allegations that it used abusive debt collection practices in violation of Massachusetts’s Consumer Protection Act and the AG’s Debt Collection Regulations.
• According to the AG’s office, Avant allegedly pursued collections on defaulted accounts through calls to debtors’ residences, cell phones, and other personal telephones with a frequency that violated the debt collection regulations. Avant also allegedly failed to provide required validation notices and documentation to consumers who fell behind on their payments.
• Under the terms of the assurance of discontinuance, Avant will pay $1.6 million to the Commonwealth, which the AG may distribute at her discretion to cover consumer restitution or attorneys’ fees or contribute to the Massachusetts General Fund, Local Consumer Aid Fund, or other initiatives designed to address the negative effects of unfair practices related to debt collection. In addition, Avant revised its call policy to comply with debt collection regulations and corrected its practices to ensure that proper validation notices and documentation are sent to consumers who are behind on their payments, among other things.

FTC Sues Fuel Card Marketer Over Alleged Misleading Marketing and Unexplained Fees

• The Federal Trade Commission (“FTC”) filed an administrative complaint against fuel card marketer FleetCor Technologies, Inc. and its CEO (collectively “FleetCor”), alleging that it misled its business customers with unrealized promises of savings on fuel in violation of the FTC Act.
• The complaint alleges, among other things, that FleetCor charged its customers hundreds of millions of dollars in fuel-card fees while promising that its cards had no set-up, transaction, or membership fees. In addition, FleetCor allegedly promised customers specific per-gallon savings in its advertisements, which customers generally did not recognize.
• The complaint seeks to prohibit FleetCor from billing consumers for any charge without receiving their prior express and informed consent. The complaint also seeks to require that FleetCor employ a Chief Compliance Officer, file periodic compliance reports with the FTC, among other things.
• The current administrative complaint against FleetCor follows a lawsuit the FTC filed against FleetCor in December 2019 over similar allegations. In the earlier lawsuit, the FTC sought monetary relief under Section 13(b) of the FTC Act, which the U.S. Supreme Court recently held does not allow for such recovery. According to the FTC, it filed the current administrative complaint against FleetCor under Section 5 of the FTC Act to ensure that it is still able to recover money damages for consumers.

UnitedHealth Settles Allegations It Wrongfully Reduced or Denied Mental Health and Substance Abuse Coverage

• New York AG Letitia James and the U.S. Department of Labor (“DoL”) reached a settlement with health insurer UnitedHealth Group Inc. and related entities (collectively “UHG”) to resolve allegations that it wrongfully reduced or denied mental health and substance abuse coverage for thousands of consumers in violation of both New York and federal behavioral-health parity laws, the New York Insurance Law, and other state statutory violations.
• The complaint alleged that UHG’s policies impermissibly reduced coverage of outpatient psychotherapy by reducing the allowed amount by 25 percent for services provided by PhD-level psychologists and by 35 percent for masters-level therapists, relative to physicians providing the same behavioral health services. In addition, UHG allegedly employed arbitrary thresholds in its algorithms that triggered utilization reviews of psychotherapy, often leading to denials of coverage after 20 sessions.
• Under the terms of the settlement agreement, UHG will pay $2.5 million to DoL and $1.1 million to New York for restitution to affected consumers, as well as the costs of administering the restitution claims fund and approximately $1 million in civil money penalties.
• Under the terms of a second settlement agreement reached by UHG to resolve substantially similar allegations in a class action suit brought by private parties, UHG agreed to pay $10 million in restitution, as well as the costs of administering the restitution claims fund, approximately $1.1 million in federal and state civil money penalties, and up to $3.35 million in attorneys’ fees and costs. Under the terms of both settlements, UHG agreed to revise its utilization review processes of psychotherapy to comply with federal and state laws, among other things.