01.03.2013 State and Federal Governments Enhance Consumer Protection Efforts



In recent months, the Virginia Office of the Attorney General has seen its consumer protection role grow.  On January 3, 2013 the Attorney General announced that his office would handle towing-related consumer complaints that were previously investigated by the Virginia Board of Towing and Recovery Operators.  On July 1, 2012, Virginia’s complaint clearinghouse, dispute resolution and general consumer protection investigative functions, which previously were performed by the Office of Consumer Affairs (“OCA”) within the Virginia Department of Agriculture and Consumer Services, transferred to the Office of the Attorney General Consumer Protection Section (“CPS”).  Prior to the transfer, consumer complaints were investigated initially by the OCA and then referred to the Office of the Attorney General (“OAG”) and its consumer section for potential prosecution. Now that the functions are co-located in the OAG, Virginia follows the model found in more than 40 other states.


In a press release announcing the merger, the OAG informs that the Counseling, Intake and Referral Unit handles approximately 48,000 telephone calls a year from consumers and helps them file consumer complaints against businesses operating in Virginia.  The Dispute Resolution and Investigations Unit facilitates the resolution of those consumer concerns that do not allege violations of Virginia law, and investigates complaints that do allege violations of consumer protection laws.


Since July, the OAG has announced a series of enforcement actions or settlements on a diverse range of matters, from violations of Virginia’s Foreclosure Rescue law (which prohibits charging advance fees) to an antitrust settlement with several eBook publishers.  The office also sent claims forms to homeowners who may be eligible to benefit from a nationwide $1.5 mortgage settlement announced in April 2012.  The OAG has also warned consumers about emerging scams associated with “Superstorm Sandy” and holiday charities, and continues its aggressive prosecution of Medicaid fraud, announcing approximately a half dozen pleas, sentencings or recoveries.  


Companies that do business across state lines should note that several of the OAG’s enforcement actions track similar efforts at the federal level.  For example, the Consumer Financial Protection Bureau and Federal Trade Commission jointly targeted mortgage advertising and marketing practices, and the Department of Justice recently settled with another eBook publisher while continuing its lawsuit against non-settling defendants.


Over time, the OAG and its staff of attorneys, investigators, counselors and support personnel will assuredly receive and follow up on more consumer inquiries, investigations and law enforcement referrals.  With the efficiencies of the new CPS and one of the most active Medicaid Fraud Control Units in the country, the Virginia OAG will interact with the health care, hospitality and financial services sectors and other industries more frequently.  Complying with consumer protection laws and mitigating damage for alleged violations should be a priority for the business community.