United States: State AGs In The News - October 9th, 2014

Last Updated: October 16 2014
Article by Bernard Nash and Lori E. Kalani

Hot News

California Requires Identity Theft Protection for Data-Breached Customers

  • California governor Jerry Brown recently signed into law AB 1710, requiring businesses that handle customer data to provide identity theft prevention services at no charge for 12 months following a data breach.
  • In light of the increasing scope and frequency of data breaches, other states may follow with revisions to their laws on post-breach mitigation requirements.
  • For more information, please see our recent blog post by Dickstein Shapiro Counsel Aaron Lancaster.

State AGs and the High Court: 2014 Term Preview

  • The October 2014 term of the U.S. Supreme Court is underway, and similar to previous years, there are more than a few disputes with significant interest from state AGs.
  • Dickstein Shapiro Partner Milton Marquis and Counsel Ann-Marie Luciano discuss a few of these cases in a recent blog post, covering topics ranging from the state action exemption, to antitrust liability, to consumers' rights under the Truth in Lending Act.

2014 Election

ACC Webcast: Post-Election Analysis of the New Attorney General Landscape

  • Dickstein Shapiro and the Association of Corporate Counsel (ACC) are partnering for a webcast on Wednesday, November 5 at 2:00 PM EST for a post-election analysis of the new Attorney General landscape.
  • Bernie Nash, head of Dickstein Shapiro's State AG practice will lead an interactive discussion about that new landscape and its implications for the business community.
  • This webcast is free and open to the public. Register here.

Consumer Financial Protection Bureau

CFPB Takes Action to Shutter Mortgage Services Referral Schemes

  • The CFPB entered into a Consent Order with Lighthouse Title, Inc. resolving allegations that the company violated Section 8(a) (the anti-kickback provisions) of the Real Estate Settlement Procedures Act and accompanying regulations.
  • The CFPB alleged that the kick-back came from "marketing service agreements" (MSAs) through which Lighthouse would agree to pay for marketing services from real estate brokers and other companies, but where the payment amount was based, in part, on the number of referrals it had received from that vendor.
  • Under the terms of the Consent Order, Lighthouse must pay a $200,000 civil penalty, terminate all existing MSAs, and is prohibited from entering into new MSAs.

Consumer Protection

Iowa Enters Consent Order With Online Lender Despite Claims of Tribal Jurisdiction

  • Iowa AG Tom Miller entered a Consent Order with CashCall, Inc. over claims that it charged consumers exorbitant interest rates – in excess of 169% APR – along with illegal fees associated with online loans, in violation of Iowa's consumer laws.
  • CashCall had alleged that it was outside Iowa's regulatory jurisdiction because it was a California entity and only extended its loans through an agreement with Western Sky Financial, LLC, an entity located on the Cheyenne River Sioux Reservation in South Dakota. AG Miller disputed CashCall's jurisdictional argument.
  • The Consent Order admits no fault, but requires CashCall to pay $1.5 million in restitution and to cease offering future loans to consumers in Iowa. It also forbids CashCall from reporting Iowans to credit reporting agencies, and requires CashCall to request that credit reporting agencies remove its past reports on Iowa borrowers.
  • CashCall is currently involved in multiple lawsuits based on similar allegations, including a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) for violating the Consumer Financial Protection Act's prohibitions on unfair, deceptive, and abusive acts and practices.

Attorneys General From All 50 States and the Federal Trade Commission Reach Nationwide Settlement on Cramming

  • AT&T Mobility LLC has agreed to pay $80 million to the Federal Trade Commission (FTC) for consumer refunds, $20 million in penalties and fees to the AGs, and a $5 million penalty to the Federal Communications Commission to resolve allegations that unauthorized third-party charges were placed on customer bills for subscriptions and services, a practice commonly referred to as "cramming."
  • AT&T Mobility issued the following statement:

In the past, our wireless customers could purchase services like ringtones from other companies using Premium Short Messaging Services (PSMS) and we would put those charges on their bills. Other wireless carriers did the same.

While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services.

Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize. This settlement gives our customers who believe they were wrongfully billed for PSMS services the ability to get a refund.

Data Privacy

Attorneys General Probe Customer Notification Following JPMorgan Data Breach

  • Connecticut AG George Jepsen and Illinois AG Lisa Madigan are investigating circumstances surrounding JPMorgan Chase & Co.'s (JPMorgan) recent data breach.
  • The AGs appear to be particularly interested in when JPMorgan was aware that its customer data had been breached, and what efforts it took to timely notify customers.
  • As we have noted, data breach notification is largely an issue of state law. In many cases, state laws do not require notification unless customer names were stolen in connection to credit card or bank account access information, or social security numbers. In addition, state laws vary as to how long a company has to notify data-breached customers: some states require a specific period (e.g., one month), whereas others use more ambiguous terms (e.g., a reasonable period). For more on the role of state AGs in this area see our previous blog post.


Gas Developers Agree to Disclose the Financial Risks of Fracking

  • New York AG Eric Schneiderman reached agreements with natural gas developers Anadarko Petroleum Corporation (Anadarko) and EOG Resources, Inc. (EOG) to end a three-year investigation into their use of hydraulic fracturing processes (fracking).
  • Anadarko and EOG agreed to make disclosures in their federal securities filings about the financial risks to investors stemming from the use of fracking. These risks would include potential environmental impacts, such as damage to natural aquifers, as well as the future regulatory action, including bans and moratoriums.
  • The investigation was conducted under the authority of New York's Martin Act, a 1921 state securities law that provides the AG broad authority to access the financial records of New York businesses.

Financial Industry

New York Attorney General Investigates Securities Ratings Firm

  • New York AG Eric Schneiderman is investigating Standard & Poor's Financial Services LLC (S&P) in response to allegations that it altered mortgage bond ratings in order to win future business from the issuing banks.
  • S&P has been named as a defendant in multiple lawsuits related to its role in rating mortgage-backed securities and the financial crisis, including separate lawsuits brought by 20 AGs and by the U.S. Department of Justice. Seventeen of the state lawsuits had been joined and removed to federal court as one multidistrict lawsuit. However, as previously blogged, in June a federal judge separated the lawsuits and remanded them back to state courts.

For-Profit Colleges

Fourteen Attorneys General Seek Better Federal Regulation of For-Profit Colleges

  • As announced by Kentucky AG Jack Conway, a bipartisan group of 14 AGs wrote a letter in support of legislation to increase federal oversight of the for-profit college industry.
  • The letter, addressed to U.S. Senator Richard Durbin and U.S. Representative Elijah Cummings, voices the group's support for S. 2204, the "Proprietary Education Oversight Coordination Improvement Act," a bill under consideration in Congress that would improve coordination among federal regulators.
  • AGs are employing different methods to deal with recent complaints surrounding for-profit colleges. As we have blogged earlier this year on July 3, July 24, and July 31, these methods include investigations and lawsuits, but also a push for greater state regulations to increase disclosures and provide better information to students.


New York Attorney General Sues Mortgage Rescuers for Fraud

  • New York AG Eric Schneiderman brought a lawsuit against an allegedly fraudulent mortgage rescue operation for violations of New York law. The lawsuit seeks an injunction against the defendants' actions, restitution, and penalties and costs.
  • The lawsuit alleges that Litvin Law Firm and other defendants induced consumers in 31 states to purchase non-existent "forensic loan audits" and other foreclosure prevention services and would automatically charge consumers a monthly fee ranging from $595 to $750.
  • We have previously blogged on similar fraudulent mortgage relief lawsuits brought by the AGs of Arizona, Indiana, and Massachusetts, among others. In addition, the FTC has initiated many similar lawsuits based on alleged violations of the FTC Act and the Mortgage Assistance Relief Services rule.

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.

In association with
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
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 you may opt out by clicking here

    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.


    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.


    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.

    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.


    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.


    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.


    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.


    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 .


    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.

    By clicking Register you state you have read and agree to our Terms and Conditions