The following lawsuits represent just a small portion of active Attorney General enforcement actions that may be of particular interest to Texas consumers. You may also wish to visit our Consumer News Release page.
If you would like to learn more about the Attorney General's antitrust enforcement efforts please visit our Antitrust Lawsuits and Settlements page.
Latest EntryState of Texas v. Marque Learning Center et al. |
Today's agreed judgment with unlicensed retailers Andrew and Edward Huizar of the former A&E Investments in Bexar County concludes the defendant's legal dispute with the Texas Attorney General's Office. Another defendant in the scheme, David Barroso of Sweet Homes, who defaulted by failing to contest the judgment, surrendered his retailer's license in January 2006 and fled to Nevada.
Arizona-based Abell Mediation, Inc., and its president and vice-president, Elizabeth Cory and Michael Cory, respectively, were charged with fraudulently claiming that their company could save homeowners from imminent foreclosure. Homeowners who were delinquent on mortgage payments responded to the defendants' solicitation cards and Web site. The defendants' cards claimed that 'Abell Mediation, Inc. has saved over 7,000 homes from foreclosure,' boasted about a 'staff of highly trained loss mitigation specialists' with established relationships with mortgage lenders and banks nationwide and promised to 'achieve results that no one else can.'
Under an agreement secured by the Attorney General, the defendants are permanently enjoined from conducting a foreclosure mitigation business in the future. The defendant is also required to pay a total of $1.55 million in fines, restitution and attorneys' fees.
Barbara Sommer and her company, Ad Telamerica Inc., which does business as Yellow Pages Directories, are charged with sending misleading direct mail pieces to businesses across the nation. The mailers suggest that the recipients had a pre-existing relationship with the defendants and therefore owed money to maintain their business's Yellow Pages Directories advertisement. Although the word 'free' appears in several locations, recipients who think they need to renew their advertisement are required to pay about $300 for the listing.
According to court documents, Advance Internets owner, John A. Gill Jr., used the guise of on-premises Internet access and instant cash to lure consumers into a payday lending scheme. Advance Internets customers, many of whom were military families, were essentially tricked into entering into fraudulent high-interest contracts.
The district court issued a temporary restraining order requiring Farah and Adma Rabadi, both officers with Delaware-based American Design & Builders Inc. and Milliard Group Inc., to cease operating unless they obtain a certificate of authority from the state. The business had scheduled upcoming Building and Design Expos in Maryland, Missouri, New York and California. In addition to unlawfully marketing their expos, the defendants failed to obtain a certificate of authority from the Texas Secretary of State, which is required of companies that operate the expos in the state of Texas.
INFORMATION ABOUT THE AMERIQUEST MORTGAGE SETTLEMENT
On January 23, 2006, Texas along with 48 other states, entered into a settlement agreement with Ameriquest Mortgage Company, agreeing to resolve an investigation into alleged illegal lending practices by the mortgage lender.
In March 2006, Texas, and each of the other settling jurisdictions, filed an Agreed Judgment that contained the terms set out in the settlement agreement. The settlement resulted in several major home finance reforms and refunds to thousands of affected Texas homeowners. Improved lending practices, including offering the same terms to equally qualified buyers, making truthful disclosures about loan terms, and not pushing borrowers into refinanced loans that provide no benefit to the borrower, began immediately.
In July 2007, Attorney General Abbott announced that homeowners who were harmed by Ameriquest Mortgage Co.s deceptive lending practices will share in almost $21 million in restitution. Eligible Texans will receive claim forms from the lending giant.
Under the agreement, which was filed by Texas and 48 other states, AOL must provide its customers a simple online cancellation method (http://cancel.aol.com). The attorneys general took legal action after AOL customers complained about difficulty and confusion when they attempted to cancel their AOL paid services. In the future, AOL must record and verify telephone calls between AOL customer service representatives and customers calling to cancel their accounts. AOL must also resolve outstanding customer complaints and provide refunds to consumers who complained since Jan. 2005 of unauthorized service charges or improper billing.
According to court documents filed by the Office of the Attorney General, McIntosh also failed to comply with a law that requires credit service organizations to register with state authorities.
The owner agreed to pay $75,000 in civil penalties and attorneys fees for violating the Texas Deceptive Trade Practices Act.
A temporary injunction was issued on June 1st, 2006. The injunction barred the defendants from accessing millions of dollars wrongly diverted for personal uses from this illegal pyramid. These funds were frozen when Attorney General Abbott sued BioPerformance on May 16. The court order states the fuel pill marketed and sold by BioPerformance does not increase fuel economy, nor does it reduce harmful emissions. It also orders BioPerformance to cease marketing the fuel pill as a product that improves gas mileage.
The lawsuit came amidst growing evidence that the miracle pills BioPerformance sold would dramatically improve fuel efficiency and reduce emissions in vehicles when put in gas tanks were nothing more than naphthalene, the active ingredient found in moth balls. The compound has no ability to reduce fuel consumption, studies have shown.
The Attorney General relied on some of the most sophisticated testing of the BioPerformance pills and testimony from several experts, including a University of Texas professor with over 30 years experience in the field of combustion. All concluded that the pills are worthless. BioPerformance also failed to provide any credible data supporting its claims that pills could save consumers 30 percent or more in fuel consumption.
On January 23, 2007 the Attorney General announced a settlement with BioPerformance and its owners, Lowell Mims and Gustavo Romero that prevented the defendants from continuing to deceptively market their products.
A combination of the defendants' frozen assets and the dissolution of two trusts created by Mims and Romero has provided more than $7 million in compensation to deceived consumers. Mims and Romero may continue to operate any legitimate enterprise, but may not deceptively market BioPerformance pills or similar fuel additive products.
The deadline for BioPerformance customers to submit requests for restitution was July 16, 2007. The process of reviewing thousands of complaints is ongoing. We are working on verifying all claims that were received prior to the deadline. If you have any questions, you can call the Consumer Protection Hotline at (800) 621-0508 (Texas residents) or (512) 463-2100 (for callers outside Texas).
Consumers who are eligible for refunds do not have to file anything with the AG unless they have a new mailing address. If consumers purchased during this time period directly from the company and have moved, they can provide their name, old address and new address to us. Otherwise there is no need for them to fill out a complaint form.
We do not yet know when refunds will be distributed.
The State filed a claim in the bankruptcy proceeding for restitution for all consumers but there is no money for consumers who purchased prior to the date of filing because of the bankruptcy laws.
Consumers who purchased weight loss products before September 17, 2002, the date the company filed bankruptcy, will not get refunds because consumers who purchased products while the company was trying to re-organize under Chapter 11 bankruptcy are higher priority by bankruptcy law.
Consumers who purchased Body Solutions weight loss products from a retailer during the 9/17/02-4/4/03 period are not entitled to a refund from the company.
| Update: The deadline to submit claim forms has passed. The OAG is currently reviewing the claims that have been received. |
On January 12th, 2009, Texas Attorney General Greg Abbott reached an agreement with Dell, Inc., that will lead to improved disclosures for customers who obtain financing through Dell Financial Services, L.P. Under the agreement, Dell will also change "Dell Preferred Account" enrollment policies, reform its warranty and rebate practices, and provide restitution to certain eligible customers.
Dell's marketing materials encouraged customers to open Dell Preferred Accounts by promising "special promotional interest rates," including no interest for three months. However, Preferred Accounts customers were not guaranteed to qualify for the promotional interest rates. As a result, some Preferred Accounts holders were charged higher interest rates than they anticipated.
According to customer complaints, Dell also failed to provide rebates within the promised timeframe. Additionally, some customers complained about Dell's failure to fulfill warranty obligations and said the company did not meet promised "next day" on-site repair or technical service agreements.
The agreement resolves concerns over Dell's advertising of special promotions for the Dell Preferred Accounts and other complaints facing Dell. In the future, Dell must clearly disclose the conditional nature of promotional offers and interest rates. Dell also is required to change its warranty claims procedures, complete warranty service within 30 days and ensure customers are aware of their obligations to troubleshoot problems before receiving service. In addition, Dell must honor "next day service" promises.
Finally, Dell agreed to process rebates within 30 days of receiving completed rebate paperwork, if no other timeframe is provided to customers. Dell admitted no wrongdoing.
Texans who believe they incurred additional costs on or after April 1, 2005, because of the practices described above may be eligible for reimbursement under the agreement. Texas consumers have until April 13, 2009, to complete a restitution claim form. Dell has agreed to contribute $162,500 into a restitution fund for these claims and is reimbursing the state $62,500 for its attorneys' fees and costs.
Texas consumers who believe they have encountered deceptive trade practices can contact the Office of the Attorney General at (800) 252-8011 or file a complaint online.
Consumers who were required to purchase coupons from one of the 14 dealerships in connection with the sale or lease of a new or used car can complete an online request for a claim form.
COMPLAINT DEADLINE: Complaint forms must be filed with our office no later than TUESDAY, MARCH 22, 2005. Fax the form to 713-223-5821 or take it in person to our Houston regional office at 808 Travis, Suite 300, Houston.
Consumers with similar complaints about other dealers, or complaints about different issues involving the 14 dealers, can complete the online Consumer Complaint Form.
The Attorney General's petition against IFC seeks the dissolution of debts incurred by fraudulent means and the cancellation of wrongful contracts. Attorney General Abbott has also asked the court to void lawsuits IFC has filed against debtors since 2004, given that the company misled business owners into thinking they had no defenses in debt collection cases and that the debts were enforceable.
Utah-based business opportunity marketer iMergent, doing business as Storesonline.com (SOL) sold website packages that included storefront websites, store building software, credit card processing licenses and coaching assistance. Formerly known as Galaxy Mall Inc., SOL claimed its software and services would enable consumers to create successful websites and sell their own products or services online at a large profit. SOLs products were marketed through hotel seminars and training sessions held in cities across Texas. The total price could top $4,000.
On February 22, 2005, the OAG filed suit in Bexar County District Court against iMergent Inc. and its officers, Brandon Lewis and Donald Danks. The lawsuit came in response to consumer complaints that the software did not work and that the company charged for technical support it had advertised as being free.
On August 11, 2005, the Attorney General obtained an Agreed Temporary Injunction that bars SOL from engaging in these illegal acts. Negotiations are continuing on attorney fees, notice to consumers and restitution for consumers who file complaints.
On November 29, 2005, the Attorney General announced an agreement with online services provider iMergent Inc. that will provide refunds totaling up to $400,000 to Texas consumers who were misled about the companys promise to help them develop Web-based businesses. Only those who purchased iMergent software licenses in Texas on or after Feb. 23, 2003, and who request a refund request questionnaire from the Attorney General before Jan. 17 will be eligible.
The defendants, the Kaweah Indian Nation Inc., Malcolm L. Webber of Wichita, Kan., (also known as 'Grand Chief Thunderbird IV'), Ralph B. Tipton of San Antonio, and Victor Ramirez of Edinburg, grossly exaggerated the legal effect of membership in their so-called 'tribe.' Although denied tribal status by the U.S. Bureau of Indian Affairs in 1984, the defendants falsely claimed that the Kaweah Indian Nation Inc. is under consideration as a federally recognized tribe, membership to which automatically confers U.S. citizenship.
According to the judgment, Main Optical was illegally dispensing lenses to customers without required prescriptions. Dispensing any contact lenses, even noncorrective, or 'plano', lenses, which are intended solely to change the appearance of the eye, still requires a prescription from a physician or optometrist.
Attorney General Greg Abbott reached an agreement that resolves the states enforcement actions against Coppell-based Mannatech Inc. and its former CEO, Samuel L. Caster. In 2007, the state charged both defendants with orchestrating an unlawful marketing scheme that exaggerated their products health benefits. Under the settlement, Mannatech will pay $4 million in restitution to Texas customers. Caster, the companys founder and largest shareholder, will pay a $1 million civil penalty and is prevented from serving as an officer, director, or employee of Mannatech for the next five years.
According to the states enforcement action, Mannatech, under the direction of Caster and through its multi-level marketing network, exaggerated claims about the therapeutic benefits of its dietary supplements and nutritional products in order to increase sales. Marketing materials falsely claimed that Mannatechs dietary supplements could cure and treat Down Syndrome, cystic fibrosis, cancer and other serious illnesses.
Under the agreed final judgment, Mannatech agreed not to advertise or otherwise claim that its dietary supplements can cure, treat, mitigate, or prevent disease. The company also agreed to implement a comprehensive monitoring and compliance program that will monitor sales associates statements about Mannatechs products in the future.
The states enforcement action also cited Mannatech for encouraging product testimonials that exaggerated its products healing effects. According to state investigators, Mannatechs independent sales associates employed misleading before and after photos in seminar booths, brochures, videos, sales associates personal Web sites and training materials.
Consumers eligible for restitution can visit Mannatech's settlement Web site at www.mannatechtexasag.com or call Mannatech's customer service toll-free at (877)877-8170.
The documents listed below are Civil Investigative Demands and letters issued by the Office of the Attorney General in connection with the NorVergence bankruptcy.
The company, headquartered in Birmingham, Ala., sold policies that were intended to cover vehicle payments in the event the borrower died or became disabled. The company's customers bought single-premium policies which were paid in a lump sum, typically when the customers purchased their vehicles. The full cost of the credit insurance policy was bundled into the buyer's vehicle loan. The coverage period lasted through the term of the vehicle loan, in some cases as long as six years.
Under the Texas Insurance Code, Protective Life was obligated to refund the unearned portion of the insurance premiums to those customers who paid off their loans ahead of schedule. The company, however, retained the unearned premiums.
Under the terms of the agreement, Purdue Pharma is prohibited from promoting OxyContin through 'off label' marketing, which is the unlawful promotion of pharmaceutical products by drug companies for uses not approved by the U.S. Food and Drug Administration. Purdue is also barred from making false or exaggerated claims about OxyContin's treatment properties. The agreement also requires that Purdue employees undergo training to educate physicians and the public about its proper uses.
The purpose of this page is to provide information for consumers affected by the settlement reached in the RadioShack bankruptcy case: In re RS Legacy Corporation, Chapter 11, United States Bankruptcy Court for the District of Delaware. A federal bankruptcy judge authorized this settlement and established the RSH Liquidating Trust (the Trust) and authorized it to review and approve all filed claim in accordance with the Gift Card Settlement Order.
According to the Attorney General's filing, the company's claims that users can get high and feel euphoric make the product a drug, yet the FDA has not approved it for use as a drug. Without scientific proof as required by the FDA, the company also makes health claims that Cocaine lowers cholesterol, prevents hardening of the arteries, protects nerve fibers from glucose damage, and may be used in the treatment of depression or anxiety.
The companies named in the suit are:
Press Release from March 13, 2007
Lawsuit (American Heritage Life)
Lawsuit (Protective Life)
Lawsuit (Old United Life)
Lawsuit (Resource Life)
RNB Enterprises, Inc., which owns the Homer Norton Motel in Rosenberg, entered into an agreed final judgment and permanent injunction, concluding a lengthy dispute with the Attorney General. An investigation by the Office of the Attorney General revealed that motel owner Nizar Ali Bhalesha charged consumers fleeing the hurricane up to three times his standard rate for a room.
Under yesterday's judgment, the defendant agreed to provide a refund to overcharged consumers and pay the state $20,000 in attorneys' fees and $40,000 in civil penalties. Within 30 days of the judgment, RNB Enterprises, Inc. must notify overcharged consumers about the restitution plan.
In August 2004, the OAG sued Second Chance Body Armor Inc., a maker of bulletproof vests. Second Chance claimed its vests, made with Zylon, were lighter and more effective than vests made with Kevlar. The lawsuit alleged that the company failed to reveal potentially fatal flaws in the Zylon. Over 5,000 Second Chance vests have been sold in Texas since 1998.
UPDATE: A settlement has been reached in a private class action lawsuit with Toyobo Company, Ltd. and Toyobo America, Inc., maker of the fiber used in the vests. To qualify for relief under the settlement, you must register your contact information no later than September 9, 2005.
Second Chance filed for bankruptcy in October 2004. The OAG will continue to pursue its claims against the company as the bankruptcy proceeds.
Investigators with the Office of the Attorney General discovered that Select Physical Therapy Texas Limited Partnership, formerly known as HealthSouth Rehabilitation Center, exposed more than 4,000 pieces of its customers' sensitive information, including Social Security numbers. The state's investigation was launched after reports from the Levelland Police Department indicated that bulk customer records were dumped in garbage containers behind a local building. Select Physical Therapy Texas Limited Partnership occupied the building until closing its office in October 2007.
According to the Texas Insurance Code, Service Life and Old United were obligated to refund the unearned portion of the insurance premiums to those customers who paid off their loans ahead of schedule. The companies, however, retained the unearned premiums.
Under the two settlements announced today, more than 46,000 Texas vehicle owners who purchased credit insurance from Service Life and Casualty Insurance Co. can expect premium refunds totaling $14.4 million. Another 6,500 policyholders can expect $1.3 million in refunds from Old United Life Insurance Companies. The premium refunds apply to vehicle owners whose loans terminated between 2002 and 2006.
SONY BMG originally claimed on its Web site that the XCP technology merely prevented unlimited copying, was otherwise passive and did not gather personal information about a computer user. However, the Attorney General's investigation into this technology revealed that it remained hidden and active at all times after installation, even when SONY's media player was inactive, prompting concerns about its true purpose.
The Attorney General's November 21, 2005, lawsuit also alleged that a phantom file was installed to conceal the XCP files from the user, thus making it difficult for the user to remove the files from his or her computer. Because of alleged violations of the Consumer Protection Against Computer Spyware Act of 2005, the Attorney General isought civil penalties of $100,000 for each violation of the law, attorneys' fees and investigative costs.
In December 2006 the Attorney General's Office concluded a year-long investigation and legal action against Sony BMG Music Entertainment by obtaining an Agreed Final Judgment that provided restitution to consumers and brought sweeping reforms that will protect consumers nationwide.
Texas was the first state in the nation to take legal action against the music giant after determining that Sony BMG released millions of compact discs containing harmful software that was not disclosed to consumers. This precedent-setting action prohibits Sony BMG from selling CDs containing XCP, MediaMax or any other content-protection software that hides or cloaks its software files. Sony BMG must also destroy any existing CDs embedded with XCP or MediaMax technology, continue working to withdraw those CDs from the marketplace, and submit to independent, third-party monitoring of any software-enhanced music CDs for the next five years.
State Farm failed to obtain salvage titles for certain vehicles which it took possession of after declaring them total loss vehicles. Salvage vehicles are those that are damaged by collision or flooding, or which are stolen or unrecovered theft vehicles.
State Farm Insurance has agreed to compensate consumers who own vehicles that should have been titled as salvage but were not.
The Office of the Attorney General of Texas filed a lawsuit against Parkview Home School (also known as Parkview Baptist School) in April 2015 for violations of the Texas Deceptive Trade Practices Act in connection with selling high school diplomas and transcripts. This case is still ongoing. In May 2015, the Court entered a temporary injunction order, to which the parties agreed. On August 18, 2015, the Court entered an order on the extension of the temporary injunction.
In June, 2006 A civil jury returned a landmark $64 million verdict as Texas Attorney General Greg Abbotts litigators won a major case against Sun Country Travel.
The jury also found Sun Country Travel and its principals liable for a number of deceptive sales and advertising practices that misled the traveling public, while allowing it to pocket huge profits.
The jurys decision marked the first court verdict rendered against a Do-Not Call violator. The companys telemarketers repeatedly called consumers who chose to be listed on the state and federal Do-Not Call lists, which prohibit telemarketers from calling these numbers. Overall, the defendants must pay civil penalties of $15.2 million and restitution of $49 million, according to the jurys verdict.
According to a petition filed in Travis County District Court, Will Boroski of Round Rock operated The Actor's Place and its affiliated Web site without obtaining a certificate from the Texas Workforce Commission (TWC) and without legally mandated security bonds. Court documents charge Boroski and The Actor's Place with unlawfully operating an unlicensed acting career school. The Attorney General also seeks a halt to the fraudulent Boroski-backed 'pilot season retreat' known as L.A. Summit Talent in Hollywood.
Under today's agreement, Wyndham will pay $190,000 in consumer restitution and state costs for investigating the case. Additionally, in the future, Wyndham's room rate may not exceed its standard room rate by more than 10 percent during a declared disaster. Wyndham is also barred from collecting hotel occupancy taxes from evacuees who are fleeing a disaster.
