United States: State AGs In The News 15 May 2014

Hot News

Blog Post: Think You're Not a Holder of Unclaimed Property? Think Again!

  • All 50 states have unclaimed property laws that require companies that possess abandoned property (a "holder") to transfer that property to the state or potentially face investigations resulting in interest and penalties. Many companies limit their unclaimed property due diligence to traditional types of unclaimed property like wages and accounts payable. This may no longer be enough.
  • States consider unclaimed property an important revenue stream, accounting for nearly $41.7 billion in property currently held on behalf of individuals and businesses according to the National Association of Unclaimed Property Administrators. State administrators are beginning to focus on potential new types of unclaimed property, such as life insurance proceeds, health savings accounts, securities, gift and stored value cards, and promotional programs.
  • Read our recent blog post to find out more about these changes and how companies can respond.

Nebraska Primary Election Results

  • Nebraska Primary Elections took place on May 13. Janet Stewart (D) and Doug Peterson (R) won the nominations for state attorney general.
  • Pete Ricketts won the Republican nomination for Governor, beating Attorney General Jon Bruning by a narrow margin. In the general election, Ricketts will face Chuck Hassebrook, who was unopposed for the Democrat nomination.
    • We will continue to provide updates on AG-related elections. For breaking news, please follow us on Twitter @StateAGMonitor.

Consumer Protection

New York Attorney General Settles With Debt Buyers to Resolve Allegations of Unlawful Collection of Time-Barred Debt

  • New York AG Eric Schneiderman settled with Portfolio Recovery Associates, LLC and Sherman Financial Group, LLC, two companies that purchase consumer debt, to resolve allegations that they brought time-barred debt collection actions against consumers.
  • The AG alleged that Portfolio and Sherman filed debt collection actions and obtained judgments without ensuring that the claims were timely under the statute of limitations of the state where the action accrued, which generally requires shorter periods than New York.
  • The settlement requires the companies to have approximately 3,000 judgments totaling about $16 million vacated by the court, cease any further collection activities on those judgments, and enhance their debt collection practices. The settlement also requires Portfolio to pay $300,000 and Sherman to pay $175,000 in penalties and costs. Neither company admitted any of the allegations.

Illinois, Kentucky, and North Carolina Attorneys General Settle Allegations Against Marketing Company That It Operated a Pyramid Scheme

  • Illinois AG Lisa Madigan, Kentucky AG Jack Conway, North Carolina AG Roy Cooper, and the Federal Trade Commission settled claims with Fortune Hi-Tech Marketing, Inc. to resolve a lawsuit alleging that it operated a pyramid scheme.
  • Fortune Hi-Tech allegedly claimed that program participants could earn significant income by selling consumer products and services, including satellite television service, home security systems, and beauty products. Participants were allegedly required to pay substantial start-up costs and monthly fees to maintain their position in the company. Allegedly the company's main business, however, was to recruit members and most of these members lost money by participating in this program.
  • The settlement requires the company to pay at least $7.75 million in restitution to participants. The court's order imposes a judgment of approximately $169 million, which will be partially suspended when the company surrenders certain assets to pay the restitution. The full judgment will become due immediately if the company misrepresented its financial condition. The settlement also prohibits the company from further misrepresentations, bans it from selling or otherwise benefitting from customers' personal information, and bans it from collecting any additional money from customers.
  • According to AG Conway, North Dakota and Texas had previously settled similar allegations with the company.

Data Privacy

CFPB Proposes Rule Allowing Financial Institutions to Post Online Annual Privacy Notices

  • The Consumer Financial Protection Bureau proposed a rule that would allow financial institutions to use a model disclosure form and post annual privacy notices online rather than delivering paper copies separately and individually to customers. The CFPB claims that this will make the disclosures more effective because customers could more easily see how these institutions use their personal information.
  • The Gramm-Leach-Bliley Act generally requires financial institutions to send customers annual privacy notices describing whether and how the institutions shares the consumers' nonpublic personal information and information on opt-out rights and procedures. The proposal would not allow use of online posting if the institution were sharing data in a way that would trigger consumer opt-out rights.
  • In an unrelated matter regarding the CFPB's involvement in privacy issues, the Online Interest-Based Advertising Accountability Program, an accountability program developed by the Council of Better Business Bureaus (BBB) and other advertising and self-regulatory industry associations, referred SunTrust Bank Inc. to the CFPB for refusing to participate in the program's self-regulatory process. According to a BBB press release, the program had sent an inquiry to SunTrust regarding how it was using third parties to collect user web-browsing habits and whether it was using that information to deliver interest-based ads. SunTrust allegedly responded that complying with the demands would consume all of its allocated resources. The CFPB has not yet commented.

Employment

Airline Industry Contractor Settles Allegations of Minimum Wage Violations With New York Attorney General

  • New York AG Eric Schneiderman settled with commercial airline industry contractor Air Serv Corporation for almost $20,000 to resolve allegations that it underpaid wheelchair attendants by improperly classifying them as tipped employees and paying them less than the state minimum wage.
  • Under New York law, employers may pay tipped employees less than minimum wage, but the tipped employee must earn weekly average tips exceeding a certain threshold particular to each industry—the applicable threshold for these wheelchair attendants is $1.20 per hour. AG Schneiderman alleges that the wheelchair attendants employed by Air Serv did not earn a weekly average of at least $1.20 per hour in tips.
  • The settlement requires Air Serv to pay restitution to the attendants of almost $16,000, pay the state $4,000 in penalties, designate a compliance officer responsible for ensuring the proper use of the tip credit, and file quarterly reports with the AG's office.

Energy

Sixteen Attorneys General File Comments With EPA on Proposed Carbon Regulations

  • West Virginia AG Patrick Morrisey and Nebraska AG Jon Bruning led a group of 16 AGs in filing comments with the Environmental Protection Agency (EPA) opposing proposed regulations that would require all new coal-fired power plants to use carbon capture and storage technology.
  • The AGs argue that this technology has not been adequately demonstrated on a commercial scale and therefore violates the Energy Policy Act of 2005. The Energy Policy Act prohibits the setting of omissions standards based on government subsidized technologies that are not the best "adequately demonstrated" technology within the meaning of the Clean Air Act.
  • These comments follow a letter AG Morrisey sent to the EPA asking the EPA to delay these regulations.

False Claims Act

New York Attorney General Settles Allegations of Overcharging With Office Supply Company for $475,000

  • New York AG Eric Schneiderman settled with Office Depot, the state's contracted office supply provider, for $475,000 to resolve allegations that it overcharged state entities for office supplies.
  • AG Schneiderman investigated the matter pursuant to the state False Claims Act and the state Fraud Enforcement and Recovery Act, which amends the False Claims Act and allows the state to collect treble damages and between $6,000 and $12,000 per violation from companies that defraud the state government.

Financial Industry

New York Attorney General Continues Probe Into "Insider Trading 2.0" by Requesting Information From Banks

  • New York AG Eric Schneiderman continued his probe into what he calls "Insider Trading 2.0," the allegedly unfair advantages obtained by high-frequency traders using high-speed technology to gain early access to market information, by requesting information from Goldman Sachs.
  • AG Schneiderman sent a letter to Goldman requesting information about its high-speed trading operations. According to a news report, AG Schneiderman is also seeking information from Barclays and Credit Suisse.

Insurance

Vehicle Service Contract Provider Allegedly Not Covered by Required Insurance Settles With Idaho Attorney General

  • Idaho AG Lawrence Wasden settled with Gold Standard Automotive Network, Inc. to resolve allegations that it violated the state consumer protection act by operating without required liability insurance.
  • State law requires that motor vehicle service providers obtain liability insurance to protect consumers if the provider goes out of business or cannot otherwise meet its contractual obligations. Gold Standard allegedly sold motor vehicle service contracts that were not covered by insurance and failed to make mandatory disclosures in its contracts.
  • Pursuant to the settlement, Gold Standard must cancel those contracts and refund the consumers.

Medicaid Fraud

Texas Attorney General Sues Company for Approving Allegedly Fraudulent Medicaid Payments for Unlawful Dental Services

  • Texas AG Greg Abbott sued Xerox Corporation and its wholly owned subsidiary, ACS State Healthcare, LLC (Xerox) for allegedly improperly approving Medicaid payments for orthodontic and dental services.
  • Xerox bid for, and won, contracts with the state Health and Human Services Commission to perform Medicaid program administration, including evaluation of authorization requests for orthodontic treatment. State law generally excludes orthodontic services from Medicaid coverage, unless the orthodontic condition poses a health risk to the patient. According to the complaint, Xerox approved orthodontic services that were not medically necessary and therefore not authorized under state law.
  • AG Abbott seeks injunctive relief, civil penalties, restitution of overpayments made by Medicaid because of Xerox's allegedly unlawful conduct, interest, expenses, fees, and costs.
  • Xerox described the lawsuit as "misdirected" and said it "will defend itself vigorously."

State AGs in the News

Twenty-Two Attorneys General File Amicus Brief Opposing New York Gun Law

  • A group of 22 AGs, led by Alabama AG Luther Strange, filed an amicus brief in the U.S. Court of Appeals for the Second Circuit against a New York gun law that bans certain kinds of semiautomatic firearms.
  • A group of organizations and individual gun-owners challenging the gun ban filed the lawsuit. In December, a lower court opinion held that because the law related to achieving an important governmental interest in public safety, the law did not violate the U.S. Constitution's Second Amendment.
  • The brief to the Second Circuit argues that New York failed to show that the ban would increase public safety or decrease gun violence and is therefore unconstitutional.

Judge Rules on Airbnb Subpoenas

  • A judge ruled to quash a subpoena issued by New York AG Eric Schneiderman to Airbnb because its demands for customer data was overbroad.
  • We recently posted a summary of oral arguments during which AG Schneiderman defended the subpoena, which was issued as part of an investigation into potential violations of state tax and hotel laws that generally prohibit apartments in New York City from being rented for less than 30 days in the absence of the permanent occupant.
  • The judge said that while a factual predicate had been established, the subpoena was overbroad because it was not limited to hosts in New York City, hosts that rented frequently and may be subject to the tax law, or to rentals of fewer than 30 days. The opinion reads that the subpoena as drafted, "seeks materials that are irrelevant to the inquiry at hand and accordingly, must be quashed." The opinion also stated, however, that the subpoena was not unduly burdensome, did not seek impermissible confidential or private information, that the issue of whether the statutes the AG may try to apply are unconstitutional is not yet ripe, and that any remaining issues are unpersuasive or unnecessary.
  • AG Schneiderman's office plans to issue a new subpoena that addresses the judge's concerns. A representative stated, "The judge rejected all of Airbnb's arguments except for a narrow technical issue, and we will reissue the subpoena to address it."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.