State Attorneys General

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In a significant regulatory shift, the Texas Lottery Commission has enacted an immediate ban on lottery ticket courier services in the state, effective February 24. This decisive move marks a stark departure from the commission’s previous position that it lacked jurisdiction over these couriers. State officials in Texas backing the change assert that groups who buy mass quantities of lottery tickets using unregulated lottery couriers avoid safeguards in the regulatory system and undermine public trust in the lottery system.

Several state attorneys general (AGs) and the Federal Trade Commission (FTC) have begun scrutinizing ancestry tracking company 23andMe following its recent announcement that it has filed for Chapter 11 bankruptcy. As part of these efforts, the AGs have issued alerts on ways consumers can exercise their rights under state privacy laws, and the FTC has issued letters stressing potential risks to U.S. bankruptcy trustees. 23andMe, which was founded in 2006, has collected DNA and associated genetic material on seven million American customers to provide information related to those customers’ ancestry.

On March 24, cryptocurrency investment firm Galaxy Digital Holdings (Galaxy) entered into an assurance of discontinuance (AOD) with New York Attorney General (AG) Letitia James to resolve allegations that Galaxy engaged in misrepresentations when it promoted the failed algorithmic cryptocurrency Luna from 2020 to 2022.

The Office of Massachusetts Attorney General (AG) Andrea Campbell announced the criminal indictment of several Massachusetts-based health care providers and their owners in connection with allegedly false claims they submitted to the Massachusetts Medicaid program, MassHealth. In what Campbell characterized as a fraud and kickback arrangement, the defendants submitted more than $7.8 million in false claims for reimbursement associated with urine drug tests and home health services that were not provided, not medically necessary, or not properly authorized.

On March 21, Florida Attorney General (AG) James Uthmeier’s Consumer Protection Division announced the resolution of ongoing litigation against a network of moving brokerage companies accused of misleading consumers. These companies, including Gold Standard Moving and Storage, allegedly misrepresented their services by claiming to offer professional, door-to-door moving services when they were operating as brokers, quoting low prices to secure large up-front deposits and then outsourcing the moving tasks to unvetted third-party carriers. According to the AG’s office, this practice frequently led to consumers allegedly facing additional and unexpected costs.

New York Attorney General (AG) Letitia James recently announced her support for legislation that would significantly broaden the state’s consumer protection statute to prohibit not just deceptive acts, but also unfair and abusive business practices. The proposed Fostering Affordability and Integrity through Reasonable (FAIR) Business Practices Act, an idea long backed by leaders of the Biden-era Federal Trade Commission and Consumer Financial Protection Bureau, has been introduced in both the New York State Senate and Assembly.

Alaska’s Department of Law’s Consumer Protection Unit recently announced it obtained a Superior Court order issuing a $250,000 civil penalty against B. Merry Studio, which the state alleged to have marketed products as being made in Alaska, when the products were manufactured in the Philippines. The products at issue include knives, figurines, and animal carvings. While some of the products included raw materials sourced from Alaska, the products were assembled in the Philippines. When B. Merry Studio shipped the products to Alaska, their finishings included “Made in Philippines” stickers. The company allegedly replaced these stickers with labels that stated, “Alaskan Made” and “Made in Alaska.”

On March 7, Arizona Attorney General (AG) Kristin Mayes filed a novel lawsuit alleging consumer fraud and racketeering against numerous entities, individuals, and even law firms and title companies involved in the residential real estate market. The lawsuit is now pending in Maricopa County. The lawsuit offers a warning to entities, individuals, title companies, and even attorneys and law firms involved in the residential real estate industry.

This episode of Regulatory Oversight spotlights recent Moving the Metal episode “The Future of Auto Dealership Compliance: A Conversation With Tom Kline.” In this episode, Brooke Conkle and Chris Capurso from Troutman Pepper Locke’s Consumer Financial Services Practice Group are joined by Tom Kline, lead consultant and founder of Better Vantage Point. Tom shares his extensive experience in the auto industry, discusses the implications of the recent vacating of the CARS Rule by the Fifth Circuit, and provides insights into the most common compliance challenges faced by dealers. He also delves into the importance of having a robust compliance program and the evolving regulatory landscape. Additionally, Tom talks about his book, Tuck the Octopus, which offers valuable strategies for managing dealership operations and mitigating risks. Tune in to gain expert perspectives on staying compliant and competitive in the auto finance industry.