Each week, Crowell & Moring’s State Attorneys General team highlights significant actions that State AGs have taken. Here are this week’s updates.
Multistate
- A bipartisan coalition of 50 state attorneys general announced a settlement with ACI Worldwide Corporation (ACI), a payment processing company, resolving allegations that the company erroneously attempted to collect $2.3 billion in mortgage payments from homeowners. According to the settlement, ACI is required to pay $10 million to the states and to avoid similar incidents in the future, including by using artificially-created data rather than real consumer data when testing systems or software, and segregating any testing or development work from its consumer payment systems.
- A coalition of 41 state attorneys general announced the settlement of a multistate investigation into Tompoe, LLC, a financing company that partnered with retail stores to offer consumers leases for retail goods. The settlement resolves allegations that the company engaged in deceptive advertising and leasing practices, such as, omitting certain disclosures and designing complex leases that confused consumers. The settlement requires the company to allow consumers to keep the products they leased without further financial obligations, amounting to approximately $33 million nationwide. The company is also prohibited from providing credit-reporting agencies with negative information about consumers who leased from it.
- A coalition of 33 state attorneys general announced the filing of a lawsuit against Meta alleging that the company knowingly designed and deployed harmful features on Instagram and other social media platforms that purposefully addict children and teens. The complaint also alleges that Meta falsely assured the public that these features are safe and suitable for young users.
California
- California Attorney General Rob Bonta announced the filing of a notice of appeal to overturn a preliminary injunction that would block a children’s online safety law—the California Age-Appropriate Design Code Act—from going into effect. AB 2273 prohibits companies that provide online services, products or features likely to be accessed by children from using a child’s personal information; collecting, selling, or retaining a child’s geolocation; profiling a child by default; and leading or encouraging children to provide personal information. The preliminary injunction was granted by the U.S. District Court for the Northern District of California on September 18, 2023, and is on appeal to the U.S. Court of Appeals for the Ninth Circuit.
New Jersey
- New Jersey Attorney General Matthew J. Platkin along with the Division of Consumer Affairs announced a settlement with Sollers, Inc., doing business as Sollers Education, LLC, a for-profit school, along with its founder and president. The settlement resolves allegations that the school used false and misleading job advertisements to funnel students into its high-cost information technology programs, and also falsely claimed that Income Share Agreements that required students to pledge a portion of their future income in exchange for upfront money to pay for the programs were not loans and would not create debt. The settlement requires the defendants to cancel approximately $3.4 million in student debt and to pay $1.2 million in civil penalties.