Consumer Protection

SAN FRANCISCO – Attorney General Kamala D. Harris today issued a consumer alert to Californians regarding home improvement scams.  As summer approaches, many consumers may consider home remodeling, repair, and maintenance projects.  Unfortunately, not all contractors are legitimate and the unwary may fall victim to home improvement scams, which peak during the summer.  Consumers should be aware of their rights under California laws governing home improvement contracts.  This consumer alert provides some helpful tips for selecting reputable contractors, and provides an overview of homeowners’ rights in the event they encounter a home improvement scam.
                

WHAT TO LOOK OUT FOR

The Attorney General offers California consumers the following tips to help them select reputable contractors, and to understand their legal rights:

When selecting a contractor, be wary of unsolicited visits by contractors who claim to just “happen to be in the neighborhood” working on a nearby property or who promise large discounts because they have extra materials left over from other jobs.  Often, these contractors are not licensed, take large amounts of money upfront, and then fail to finish a job or do any work at all.

• Instead, seek out contractors recommended by trusted friends or family members.  It is wise to shop around, get at least three written quotes, and call all references.

• Once you have selected a contractor, check to make sure they are licensed.  You can find this information on the Contractors State License Board’s (CSLB) website or www.CheckTheLicenseFirst.com.   You can also check the Better Business Bureau’s (BBB) websitefor any complaints about the contractor.  A contractor’s license is required for all jobs except minor work totaling less than $500; this minor work cannot be part of a larger project.  (Bus. & Prof. Code section 7048.)

• If you feel pressured into signing a home improvement contract, California’s Home Solicitation Sales Act (Bus. & Prof. Code sections 1688 to 1693) allows you to cancel the contract within three days.  However, be aware that this law does not apply to contracts for emergency repairs or to contracts signed in the contractor’s place of business.

• Always insist on a written contract.  Under California law, all home improvement contracts over $500 must be in writing.  California also requires contract terms to be legible, easy to understand, and to inform you of the right to cancel the contract.  The contract must also require any change orders to be in writing and must include a warning regarding mechanic’s liens.  (Bus. & Prof. Code section 7159.)

• Make sure that the contractor carries the appropriate insurance.  Contractors should have personal liability, worker’s compensation (if they have employees), and property insurance.  Confirm that insurance is addressed in the contract and ask for copies of insurance certificates if you have any concerns.

• Make sure that the contract clearly states that the contractor is responsible for obtaining all necessary permits for the work and that the contractor will comply with all local permitting, building, and zoning laws.

• Never pay large amounts of money upfront.  In fact, California law generally prohibits contractors from requiring down payments of more than $1,000 or 10% of the total contract price, whichever is less.  (Bus. & Prof. Code section 7159.)  Don’t pay the full contract price until the job is complete and you are satisfied with the work.

• In the event that you have a dispute with your contractor, you have four years to file a complaint with the CSLB.  The CSLB administers two arbitration programs for claims against licensed contractors: a mandatory program for claims of $12,5000 or less, and a voluntary program for claims between $12,500 and $50,000.  More information about the complaint process can be found on CSLB’s website. 

HELPFUL RESOURCES

To learn more about home improvement scams in general, visit the Federal Trade Commission’s webpage on home improvement scams.

The BBB has also published an article with other helpful tips, “Scam Alert – This Home Improvement Deal is Really a Scam: Summer Contracting Scam Tricks Homeowners.”

WHAT TO DO IF YOU HAVE A PROBLEM WITH A HOME IMPROVEMENT CONTRACTOR
 

If you are unable to resolve a dispute with a home improvement contractor, CSLB provides information on how to file a consumer complaint and its arbitration program:

The Better Business Bureau (BBB) also provides information on how to file consumer complaints about a particular company..

Finally, the California Department of Justice protects the rights of consumers and collects complaints on scams in order to identify patterns of wrongful activity.  To submit a complaint to the California Department of Justice regarding a home improvement scam, please use one of the following complaint forms:

English: Consumer Complaint Against a Business or Company (English).  

En Español: Consumer Complaint Against a Business or Company (Spanish)

中文: Consumer Complaint Against a Business or Company (Chinese) 

Tiếng Việt: Consumer Complaint Against a Business or Company (Vietnamese)

Six Defendants Indicted on 135 Felony Counts For Scam That Cost Vulnerable Homeowners $4 Million

SAN DIEGO – Attorney General Kamala D. Harris announced that six individuals were indicted and arrested on 135 felony charges for operating a mortgage fraud scheme throughout Southern California and the Inland Empire, preying on homeowners facing foreclosure.  The case is being prosecuted by attorneys in the Attorney General’s Mortgage Fraud Strike Force, created by Harris in 2011 to prosecute mortgage fraud at every step of the process.

Jacob Orona, Aide Orona, John Contreras, Prakashumar ("Kash") Bhakta, Marcus Robinson, and David Boyd were indicted by a grand jury on 135 felony charges, including conspiracy, grand theft, filing false or forged documents, and identity theft.  All six defendants were arrested last week and one defendant, Marcus Robinson, was arraigned yesterday, Monday, July 11, in San Diego Superior Court.

"I created the Mortgage Fraud Task Force in 2011 to ensure that we tirelessly protect Californians struggling to stay in their homes from those who would prey upon them for profit.  This indictment is result of a joint effort to remain vigilant in the investigation and prosecution of those who attempt to defraud homeowners through the mortgage process," said Attorney General Harris. "I thank our Mortgage Fraud Strike Force and California Department of Justice Special Agents, as well as our local, state, and federal law enforcement partners, for their efforts on this case."

The scam artists promised homeowners who were underwater on their mortgages that they could provide legal remedies to avoid foreclosure, convincing homeowners to stop making mortgage payments and instead pay them $3,500 to start with an “administrative process,” plus $1,000 every month and separate amounts to allegedly file legal documents.  The defendants filed bogus petitions and court pleadings and recorded false deeds in county recorders’ offices, causing over $4 million in loses while failing to halt any foreclosures.  The fraud stretched through San Diego, Riverside, San Bernardino, and Los Angeles counties.

The indictment was delivered following a two-week special statewide grand jury convened in San Diego County.  If convicted, Jacob and Aide Orona face over 90 years in prison; Contreras and Prakashkumar face over 70 years in prison; Robinson faces over 28 years in prison, and Boyd faces over 18 years in prison.

The arrests and arraignments are the culmination of a joint investigation by the Federal Housing Finance Agency Office of the Inspector General (FHFAOIG), the Attorney General’s Financial Fraud and Special Prosecutions Section (FFSPS), the California Department of Justice Bureau of Investigation, and the Stanislaus County District Attorney’s Office, Real Estate Fraud Unit.

Attorney General Harris created the Mortgage Fraud Strike Force within the California Department of Justice in May 2011.  Composed of both civil and criminal enforcement teams, the Mortgage Fraud Strike Force monitors and prosecutes violations at every step of the mortgage process, from the origination of mortgage loans to the marketing of mortgage-backed securities to the investing public. 

Attorney General Harris has long been dedicated to prosecuting mortgage fraud.  She secured approximately $20 billion for California in the National Mortgage Settlement and sponsored the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.  In 2009, as District Attorney of San Francisco, she launched the first stand-alone district attorney’s mortgage fraud unit in California.

Civil Penalties and Significant Injunctive Terms Follow the $1.18 Billion Secured for California in Initial Landmark Settlement with Volkswagen

SAN FRANCISCO - Attorney General Kamala D. Harris today announced that, in addition to the historic $14.7 billion settlement with Volkswagen announced last week, the company will also pay California an additional $86 million in civil penalties as part of a second partial settlement over the company’s use of “defeat devices” to evade emissions testing in its diesel vehicles. 

The agreement, which is subject to court approval, represents the largest amount of money recovered by the state of California from an automaker and resolves certain aspects of the California Attorney General’s claims against Volkswagen under California’s Unfair Competition Law as well as the Dodd-Frank Consumer Financial Protection Act of 2010.  Volkswagen will also agree to significant injunctive terms to deter future misconduct, including a new requirement that Volkswagen contractors and employees report to the California Attorney General’s office any request for or use of “defeat devices.”  

Of the $86 million in penalties, the Attorney General will direct $10 million in grants to local government agencies or academic institutions to research and develop technology to detect “defeat devices” and better assess on-road emissions, as well as to monitor, model, and mitigate the environmental and public health impacts of vehicle emissions, especially on children and other vulnerable populations.

“We must conserve and protect our environment for future generations and deliver swift and certain consequences to those who break the law and pollute our air.  Volkswagen tricked consumers seeking to purchase an eco-friendly car by misleading the public about the level of harmful pollutants their so-called ‘clean diesel’ vehicles were emitting,” said Attorney General Harris.  “This additional settlement sends an unequivocal message to Volkswagen and any other automaker that California will aggressively enforce our robust consumer and environmental protection laws.” 

Today’s announcement follows last Tuesday’s joint announcement by California Attorney General Kamala Harris and California Air Resources Board Chair Mary Nichols that California, alongside the U.S. Environmental Protection Agency and U.S. Department of Justice, had negotiated a landmark $14.7 billion settlement with Volkswagen over the software it installed in its diesel cars to trick emissions testing while actually emitting up to 40 times the level of harmful nitrogen oxides allowed under state and federal law. 

As part of that $14.7 billion agreement, Volkswagen agreed to spend an estimated $10 billion to compensate consumers and buy back or modify hundreds of thousands of its polluting cars, pay $2.7 billion into a trust fund for environmental mitigation projects, and spend $2 billion over 10 years on zero-emission technology.  Of the $4.7 billion in mitigation funding and investments, $1.18 billion will come to California ($800 million in zero-emissions technology investments and $380 million for environmental mitigation projects in the state).

The partial settlement announced today relates to Volkswagen’s 2.0 and 3.0 liter vehicles that deployed “defeat devices” to deceive regulators and consumers about levels of harmful emissions.  An estimated 86,000 2.0 and 3.0 liter vehicles were sold or leased in California between 2009 and 2015.  Today’s settlement preserves California’s potential criminal claims and claims for additional civil penalties and injunctive relief under state environmental laws, as well as the Attorney General’s claims for consumer relief and environmental mitigation related to the 3.0 liter vehicles.

In addition to the $86 million in civil penalties, Volkswagen agrees to strict injunctive terms as part of the settlement, including:

• Prohibitions on false and deceptive advertising
• Affirmatively disclosing defeat devices in certification applications and other submissions to the California Air Resources Board (CARB)
• Notifying the California Attorney General’s office and CARB of whistleblower and other complaints
• Requiring Volkswagen contractors and employees who are designing engine control units or engine control software to report to the California Attorney General’s office and to CARB any request for or use of defeat devices, and to keep accurate records of software features and changes that could be used as defeat devices
• Provide the California Attorney General’s office with reports of any violations, along with periodic reports regarding its efforts to implement the injunction and effectiveness of those efforts

The consent decree was filed today in U.S. District Court, Northern District of California and is attached to the online version of this news release at www.oag.ca.gov/news.

LOS ANGELES – Attorney General Kamala D. Harris today issued a consumer alert urging Californians to make informed decisions and protect themselves from rental and moving scams.  Summer is a popular time for traveling, vacations, and moves to new houses and apartments. Unfortunately, scammers are also aware of these summertime transitions and scams peak during this time of year as families move to new homes and students move in and out of new housing arrangements.

The Attorney General encourages consumers to be vigilant and ensure that rental listings are legitimate before leasing a rental property.  Scam artists often advertise properties at incredibly low prices to lure unsuspecting renters.  Once hooked, the consumer may learn that the rental property address is fictitious, the property is unavailable because it is owned by other people, or that the property is for sale or in foreclosure proceedings.  Consumers should be wary of high-pressure tactics, especially when scammers urge them to wire money without viewing the property, reviewing the rental agreement, or meeting the prospective landlord.  The Attorney General encourages consumers to fully research rental listings by visiting the premises and reviewing all the terms in a lease agreement before exchanging money to reserve a rental property.          

WHAT TO LOOK OUT FOR

The Attorney General offers California consumers the following tips when renting properties and using moving companies:

• Be wary of circumstances in which a potential landlord requests an immediate wire transfer to reserve a rental property.  Wiring money is like sending cash and once money is wired it likely cannot be recovered.  When making a payment for a rental property, use a credit card or check.  These forms of payment may provide some protections for victims of a rental scam   and may enable the authorities to track down the scam artist.

• Allow plenty of time to research and make an informed decision to rent a property.  Be wary of sending a rushed payment to a listing agent or individual in order to secure a home or rental that has not yet been viewed.

• Ensure that the advertised rental property is actually for rent and (if at all possible) visit the property to confirm that the information in the rental advertisement is accurate before sending any money.   

• Obtain and review the rental agreement before sending money to a landlord or property manager.  Make sure to fully understand how rent should be paid and how repairs should be handled.

• Be cautious of moving companies that provide a low initial price quote.  Sometimes companies that give a low initial quote will refuse to complete delivery of all items until a larger sum of money is paid. 

• If a moving company will be used, check the company’s references and ask for referrals.  Be sure that the moving company has been registered with the Federal Motor Carrier Safety Administration (“FMCSA”) for interstate moves or with the California Public Utilities Commission (“CPUC”) for intrastate moves.  Also make sure that the company has appropriate insurance.  Inquire about the moving company’s liability for any damage that may occur to your property during the course of the move.

• Be wary of moving companies that require an agreement to an estimate of costs without or before an onsite inspection of the items to be moved.  Also be cautious of moving companies that do not provide written estimates.  Additionally, do not pay a moving company before it finishes delivering all belongings.

• For interstate moves, federal regulations require moving companies to provide customers with the booklet, Your Rights and Responsibilities When You Move, as well as the FMCSA’s Ready to Move? brochure.  Meanwhile, for intrastate moves, the CPUC requires that the booklet entitled Important Information For Persons Moving Household Goods (within California) be provided to consumers.

• If a moving company demands a sum of money that exceeds the agreed upon amount that is due before completing delivery of belongings, take the following steps: 1) send a written complaint to the moving company in order to document the situation; 2) contact your local law enforcement authority; and 3) contact and file a complaint with the FMCSA (for interstate moves) or the CPUC (for intrastate moves).          

HELPFUL RESOURCES

The Department of Consumer Affairs has provided a useful guide for renters entitled California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities.

The California Bureau of Real Estate provides information to consumers regarding renting properties.

The CPUC regulates moving companies that move goods within California and provides information about licensed moving companies.  The CPUC also offers information about hiring a moving company.

The CPUC’s booklet provides guidelines on the use of moving companies. 

The U.S. Department of Transportation provides information on the rights and responsibilities of both consumers and movers in a booklet entitled Your Rights and Responsibilities When You Move.

FMCSA’s regulations are designed to protect the interests of consumers.  FMCSA’s website has information (including links to applicable federal regulations) regarding the use of moving companies.  Additionally, the FMCSA’s Ready to Move? brochure also has helpful information.   

WHAT TO DO IF YOU ARE THE VICTIM OF A RENTAL OR MOVING SCAM

The FMCSA investigates moving complaints and may provide recourse for consumers who have been victimized.  If you are the victim of a moving scam, please contact the FMCSA.

The California Public Utilities Commission also regulates privately owned transportation companies and handles consumer complaints regarding moving scams.

California district attorneys are available to assist with circumstances in which consumers are victimized by moving companies that are engaged in criminal conduct.  If you are taken advantage of by such a moving company, you may locate and contact your local district attorney.

The California Department of Justice protects the rights of consumers and collects complaints on rental and moving scams to identify patterns of wrongful activity.  To submit a complaint to the California Department of Justice regarding a rental or moving scam, please use one of the following complaint forms:

English: https://oag.ca.gov/contact/consumer-complaint-against-business-or-company.  

En Español: http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_sp.pdf

中文: http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_chin.pdf

Tiếng Việt: http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_viet.pdf

SAN FRANCISCO - Attorney General Kamala D. Harris and the California Air Resources Board (CARB) today announced a landmark $14.7 billion national settlement with Volkswagen over allegations that the company violated environmental and consumer protection laws by installing “defeat device” software to bypass emissions controls in its 2.0 liter diesel vehicles.

As part of the national agreement, which is subject to approval by the court, Volkswagen will spend approximately $10 billion to buy back or modify these vehicles, as well as pay $2.7 billion into a trust to support environmental programs and reduce emissions and an additional $2 billion on investments and promotion of zero emissions vehicles.  The agreement preserves the Attorney General’s and CARB’s claims for civil penalties and prospective injunctive relief, as well as their claims related to 3.0 liter diesel vehicles.

In addition to providing consumer relief funding, California will receive $1.18 billion, representing more than one-quarter of the funding VW must provide for environmental projects in states injured by the company's conduct and investments it must make in zero emission technology.

“Our state and national environmental protection laws exist to protect public health and to preserve our planet for future generations.  Volkswagen undermined these objectives by deceiving California consumers and flagrantly violating California environmental and consumer protection laws by manipulating its diesel vehicles to produce false results when undergoing emissions testing,” said Attorney General Kamala Harris. “This landmark agreement not only ensures that consumers who were deceived are fairly compensated, but also requires Volkswagen to make unprecedented investments in protecting our environment and advancing zero emission technology.”

As part of the agreement, VW will offer compensation to those who own or lease a VW or Audi 2.0 liter vehicle as of September 18, 2015.  Owners have the option of having Volkswagen buy back their vehicle or, if approved by CARB and EPA, having VW modify their vehicle to reduce its emissions.  Owners who opt for a buyback or modification will also receive an additional cash payment of at least $5,100.  Some owners may receive as much as $10,000.

In addition to consumer relief and getting polluting cars off the road via the buyback and modification program, which is anticipated to cost Volkswagen over $10 billion, Volkswagen is also required to pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions. CARB will receive and direct 14.12%, $380 million, of these trust funds to fund environmental mitigation projects in California.  Volkswagen is also required to buy back, modify, or scrap at least 85% of the subject vehicles nationally and in California, and it is required to pay for additional mitigation projects if it falls short of that requirement.   

Volkswagen must also spend $2 billion over a 10-year period to promote zero emissions vehicles through educational information, research and development, and infrastructure development (such as building charging stations), to further mitigate emissions and help right the market that was manipulated by the false emissions results in Volkswagen diesel vehicles.  Forty percent, or $800 million, of these investments will be made in California, pursuant to investment plans that will be subject to approval by CARB.

“This is a good deal for California’s environment and for California consumers. It will bring over a billion dollars of projects to California to supercharge our expanding zero-emission vehicle market, and fully mitigate the environmental harm to our air as a result of VW’s cheating,” said CARB Chair Mary D. Nichols. “The Consent Decree also recognizes the crucial contribution the dogged engineers in CARB’s testing lab played in exposing the illegal device in the first place – and the exceptionally costly and difficult challenges we face in our fight for cleaner air in a state where tens of millions breathe the most heavily polluted air in the nation.”

Volkswagen programmed software in its diesel cars to achieve lower emissions while undergoing testing, but in normal driving conditions, their cars were emitting up to 40 times more harmful nitrogen oxides than allowed by state and federal law. 

The parties settling claims against Volkswagen in this major agreement include the California Attorney General’s Office, CARB, the U.S. Department of Justice, and the U.S. Environmental Protection Agency (EPA).

California is uniquely affected, not only because of our robust environmental protection laws and CARB’s unique enforcement and regulatory role, but also because our state has the largest number of affected consumers.

In conjunction with the consent decree, the California Attorney General’s office filed a joint complaint with CARB in the Northern District of California this morning.  The complaint is attached to the online version of this news release at www.oag.ca.gov/news.

The agreement is subject to approval by the court following a public comment period.

The agreement is specific to 2.0 liter vehicles and does not include Volkswagen and Audi 3.0 liter vehicles that are alleged to have similar defeat devices installed.  It also preserves the ability of the Attorney General, CARB, and the EPA to seek civil penalties and further injunctive relief.

LOS ANGELES – Attorney General Kamala D. Harris today sent a letter to the United States Department of Education, urging the Department to revoke federal recognition of the Accrediting Council for Independent Colleges and Schools’ (ACICS).  ACICS is a major accreditor of for-profit schools and was the accreditor for the now defunct Corinthian Colleges, Inc. (“Corinthian”).  While accredited by ACICS, Corinthian intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs.

“The predatory scheme devised by executives at Corinthian Colleges, Inc. was unconscionable. And despite enforcement actions by the California Department of Justice and the federal government against Corinthian, ACICS continued to accredit Corinthian, hurting thousands of students in the process,” said Attorney General Harris. “Students relied on Corinthian’s accreditation status, believing they were obtaining a high quality-education with real job prospects. The Department of Education should not renew ACICS’ federal recognition and protect students from harm by predatory, for-profit colleges.”

In issuing this letter, Attorney General Harris supports the 13 other state Attorneys General who voiced their concerns over the renewal of ACICS as an accreditation agency.  These Attorneys General noted their opposition in a letter that included a discussion of ACICS-related issues and concerns in their respective states, also noting the failure of ACICS to take appropriate action in response to public enforcement actions by states and federal agencies.

Today’s letter is Attorney General Harris’ latest effort to protect vulnerable students from fraud and predatory practices by dishonest institutions.  Yesterday, Attorney General Harris, 10 other Attorneys General, and the State of Hawaii, Office of Consumer Protection sent a letter to the Senate Armed Services Committee opposing an amendment that would weaken existing protections and would instead allow any college approved for military tuition benefits to have unrestricted access to recruit on military bases.  In March 2016, Attorney General Harris obtained a $1.1 billion judgment against Corinthian as a result of their predatory and unlawful practices that left tens of thousands of students with large amounts of debt and useless degrees. 

In February 2016, Attorney General Harris and 7 other Attorneys General sent a letter to the Secretary of Veterans Affairs urging greater protections for veterans affected by predatory school practices.  Also in February 2016, Attorney General released a statement and in March 2016 joined 8 other Attorneys General in a letter urging the Department of Education to adopt stronger regulations, including in “borrower defense to repayment,” to protect students misled by Corinthian and other predatory for-profit colleges.  In April 2015, Attorney General Harris and 8 other state Attorneys General sent a letter to the U.S. Department of Education urging immediate debt relief for the students who attended Heald College and other Corinthian Colleges, Inc. campuses.

In October 2013, Attorney General Kamala D. Harris led the charge against Corinthian Colleges, Inc. and its schools in California (Everest, Heald, and Wyotech colleges), seeking to put an end to abusive practices that left tens of thousands of students with useless degrees and tens of thousands of dollars in debt.

Attorney General Harris remains committed to protecting vulnerable students.  A copy of the letter is attached to the electronic version of this release at www.oag.ca.gov/news.

LOS ANGELES - Attorney General Kamala D. Harris and the Attorneys General of Connecticut, District of Columbia, Hawaii, Iowa, Maine, Maryland, Massachusetts, Minnesota, New York, Pennsylvania, and the State of Hawaii, Office of Consumer Protection yesterday sent a letter to the Senate Armed Services Committee expressing opposition to an amendment to the National Defense Authorization Act (NDAA) proposed by Senator Joe Manchin (D-WV) that would allow any college approved for military tuition benefits to have unrestricted access to recruit on military bases. 

“Predatory schemes targeting veterans are unconscionable,” said Attorney General Harris.  “The proposed amendment would weaken current rules intended to protect our servicemembers, and harm veterans by making them vulnerable to fraud and exploitation.  We must protect our nation’s veterans and servicemembers from predators who would exploit them for their educational benefits.”

Under existing standards, educational institutions already have sufficient access to military installations, especially for counseling purposes.  This amendment would weaken the existing protections and leave veterans and servicemembers more susceptible to aggressive and deceptive recruiters on military properties.

Attorney General Harris and the other state attorneys general also point out that current protections are indeed insufficient and should be strengthened to ensure that servicemembers are able to perform their duties free from harassment by unscrupulous recruiters.

In issuing this letter, the attorneys general join a number of military and veterans service organizations as well as other advocacy organizations in voicing concerns over the amendment. These organizations have noted their opposition in the following letters: http://veteranseducationsuccess.org/s/Letter-to-Manchin-re-NDAA-43d5.pdf

http://veteranseducationsuccess.org/s/Letter-to-McCain-Reed-re-NDAA-Manchin-Provision-arm9.pdf

This letter is Attorney General Harris’ latest effort to protect veterans from targeted scams and predatory practices.  In March of this year, Attorney General Harris obtained a $1.1 billion default judgment against Corinthian Colleges, which targeted servicemembers and veterans and illegally used the seals of the military services in its marketing materials.  Attorney General Harris and seven states also sent a letter to the Department of Veterans Affairs urging VA Secretary Robert McDonald to take steps to ensure that veterans are given accurate information about the risks associated with using their benefits at predatory schools like the now-defunct Corinthian Colleges, Inc.  

Last year, Attorney General Harris issued a consumer alert warning veterans and their survivors to be on alert following a rise in reported pension poaching scams, and last Friday, in honor of Memorial Day, issued consumer tips to help California servicemembers and veterans protect themselves from common scams. In November 2015, Attorney General Harris announced a stipulated judgment against JPMorgan Chase over allegations of credit card debt-collection abuses that violated the Servicemembers Civil Relief Act and the California Military Veterans Code and required the payment of restitution to servicemember-victims nationwide.  The Attorney General’s office has also provided training and support to military legal assistance attorneys on consumer protection issues.

The letter to Senator Manchin opposing the amendment is attached to the online version of this news release at www.oag.ca.gov/news.

LOS ANGELES —Attorney General Kamala D. Harris today issued the following tips to help California servicemembers and veterans protect themselves from scams.  Scammers target those serving our country, attempting to prey on their steady and hard-earned incomes.  The youngest men and women in uniform are particularly vulnerable as they are often living away from home for the first time and are only beginning to manage their finances independently.

“On Memorial Day, we honor the military veterans who made the ultimate sacrifice in service of our nation,” said Attorney General Harris. “While we remember the bravery, courage and sacrifice of our veterans, we are also reminded that too many men and women who serve our nation are targeted by scam artists and predators.  My office remains vigilant in support of all veterans, will protect servicemembers from fraud, and will hold accountable those who prey upon members of our military.”

WHAT TO LOOK OUT FOR

There are many different scams targeting servicemembers and veterans, but scammers tend to follow similar patterns.  Here are some of the most common scams of which to be aware:

• Predatory auto sales and financing.  Car dealers located near military bases may try to lure servicemembers with false promises of special deals for military personnel.  Often, these so-called deals conceal the terms of purchase for the vehicle and result in the servicemember drastically overpaying for both the vehicle and cost of financing.  For example, dealers may insist that military personnel will not qualify for financing unless they purchase overpriced add-ons they do not need.  Other times, the dealer may contact a servicemember who previously completed a transaction and drove a car off the lot to inform him that the initial financing fell through and insist on renegotiating for far worse terms.  Servicemembers should not rely on oral promises nor feel pressured to enter into any purchase without first reading and understanding the contract. 

• Storage units.  Servicemembers may spend months or years away from their belongings and often must rely on storage services while they are gone.  During deployment, stored possessions benefit from additional legal protections to prevent them from being sold at auction as a result of a default in rental payments.  Unscrupulous storage complexes may claim ignorance of military status or induce servicemembers to sign away their rights in order to auction their property while they are away.  Military personnel should notify storage companies of their military affiliation and should not agree to waive the rights designed to protect them. 

• Rental scams.  Because they may relocate frequently to unfamiliar places, servicemembers should be particularly vigilant about online scammers who use websites like Craigslist to lure would-be renters into paying deposits for non-existent rental properties.  The online advertisements may appear legitimate on the surface, but rentals listed at abnormally low rates or landlords requiring a deposit prior to showing the property usually signal a scam.  Particularly with peak Permanent Change of Station (PCS) season fast approaching, military renters should watch out for insistent demands that instill a false sense of urgency and should avoid wiring money to reserve apartments sight unseen.  Using installation housing services offices or established property management companies to locate potential housing is advisable.

• Education rip-offs.  Veterans Administration education benefits provide a unique and valuable opportunity for military personnel to pursue higher education.  Too often, however, recipients become the targets of disreputable for-profit colleges that are happy to pocket hard-earned benefits but provide little education in return.  Servicemembers and veterans should take great care to ensure that they use their benefits wisely by thoroughly researching educational opportunities before using their benefits.  The G.I. Bill Comparison Tool may be helpful in determining how to best utilize these benefits.   

• Pension scams.  Organizations professing a sincere concern for veterans may approach a veteran or his/her family about helping them qualify for VA pension benefits under the Aid and Attendance Program.  These organizations purport to employ financial wizardry to help veterans meet the program’s income and asset limitations.  But the organizations often charge high fees and receive lucrative undisclosed commissions for the financial products they sell to unsuspecting veterans.  Applicants who utilize this assistance may later discover that they no longer have access to their assets or that they are disqualified from other government programs, such as Medicaid.  For additional information, see Attorney General Harris’ Consumer Alert on Veteran “Pension Poaching” Scams.

HOW TO PROTECT YOURSELF AND YOUR FAMILY

• Be vigilant in any consumer transaction in which your military affiliation is involved.  While there are certainly many respectable businesses that offer special deals to servicemembers and veterans, there are also plenty of dishonest merchants who will try to use that information to take advantage of you.

• Be very careful when you encounter testimonials from your fellow servicemembers or from veterans working for merchants.  Many scammers set up their businesses near military bases and hire veterans as salespeople, in an attempt to prey on the trust between military personnel.  Sometimes they also offer special deals or discounts to servicemembers in exchange for promoting their goods and services to other members of the military.  You should be aware of these practices and careful about relying on claims that seem too good to be true.

• Know all the terms of any installment purchase you make and look out for attempts to hide any terms from you.  Salespeople will often focus a servicemember’s attention on the monthly payment for a particular purchase, which can distract attention from a sales price inflated well beyond what a buyer would ordinarily pay.  Beware of bait and switch tactics and never sign incomplete documents or contracts you have not reviewed in detail.

• If you are a victim of consumer fraud, law enforcement is here to help.  Contact your local district attorney, consumer affairs department, or the California Attorney General’s Office.

HELPFUL RESOURCES

• The Federal Trade Commission maintains a website full of resources for military consumers.
• Servicemembers in need of legal assistance should start by contacting their local JAG legal assistance office or the California National Guard legal assistance program.
• Veterans in need of legal assistance may want to start with LawHelpCa, a website with veteran-specific resources and links to legal aid organizations that offer FREE legal help. 
• Consumers can report predatory consumer activity targeting servicemembers, veterans, or anyone else, to the Office of the Attorney General.  To submit a complaint, please use one of the following forms:

English: https://oag.ca.gov/contact/consumer-complaint-against-business-or-company.

En Español: http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_sp.pdf?

中文: http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_chin.pdf?

Tiếng Việt: http://oag.ca.gov/sites/all/files/agweb/pdfs/contact/business_corpform_viet.pdf?

LOS ANGELES – Attorney General Kamala D. Harris today filed a lawsuit against Johnson & Johnson (J&J) for false advertising and deceptive marketing of its surgical mesh products for women.  The complaint alleges that J&J neglected to inform both patients and doctors of possible severe complications and misrepresented the frequency and severity of risks.

California co-led a multistate investigation, including 46 states and the District of Columbia, into J&J’s surgical mesh products for women, and is seeking injunctive relief and monetary penalties to ensure that J&J stops its deceptive practices.

“Johnson & Johnson put millions of women at risk of severe health problems by failing to provide critical information to doctors and patients about its surgical mesh products,” said Attorney General Harris. “Johnson & Johnson’s deception denied women the ability to make informed decisions about their health and well-being.  My office will continue to hold companies accountable for misleading consumers and patients for financial gain.”

The surgical mesh device is designed to treat common health conditions in women such as stress urinary incontinence and pelvic organ prolapse. The lawsuit alleges that J&J misrepresented the safety of these devices by concealing the possibility of serious and irreversible complications caused by mesh, including permanent pain with intercourse and/or loss of sexual function, chronic pain, permanent urinary or defecatory dysfunction, and potentially devastating impact on overall quality of life.  

J&J also misrepresented the severity and frequency of common complications, and failed to disclose that its surgical mesh devices presented risks not present in alternative treatment options.

The suit further claims that J&J knew about potential risks and side effects prior to the launch of their mesh products, yet omitted that information from educational and marketing materials provided to doctors and patients.  

J&J sold 787,232 devices nationally from 2008 to 2014, including more than 42,000 in California for that same time period.  Worldwide, more than 2 million women had been implanted with these mesh products. 

In addition to the lawsuit filed today, J&J faces over 35,000 personal injury lawsuits in state and federal court related to its surgical mesh products. 

A copy of the complaint is attached to the online version of this news release at www.oag.ca.gov/news.

SANTA BARBARA - Attorney General Kamala D. Harris and Santa Barbara County District Attorney Joyce E. Dudley today announced that Plains All-American Pipeline has been indicted by a grand jury on 46 criminal charges related to the May 2015 oil spill in Santa Barbara County.  A Plains All-American Pipeline employee was also indicted on 3 criminal charges.

On May 19, 2015, a pipeline operated by Plains All-American Pipeline ruptured, releasing into the environment approximately 140,000 gallons of heavy crude oil onto land, beaches, and the Pacific Ocean near Refugio State Beach.  Federal, state and local governments have spent millions of dollars to clean up the spill, which resulted in substantial damage to natural habitats and wildlife over a large area. 

Attorney General Harris partnered with local and state law enforcement agencies to conduct a criminal investigation and jointly prosecute the criminal case with Santa Barbara County District Attorney Dudley. 

“Crimes against our environment must be met with swift action and accountability,” said Attorney General Harris. “The carelessness of Plains All-American harmed hundreds of species and marine life off Refugio Beach. This conduct is criminal and today’s charges serve as a powerful reminder of the consequences that flow from jeopardizing the well-being of our ecosystems and public health.”

On May 16, 2016, a grand jury indicted Plains All-American Pipeline on 46 charges, including 4 felony charges and 42 misdemeanor charges. The company was charged with felony violations of state laws regarding the spilling of oil and hazardous substances into state water.  Both the company and James Buchanan, an employee, were charged with misdemeanor violations for failing to provide timely notice of the oil spill to the Office of Emergency Services.  In addition, the company was indicted on three dozen misdemeanor charges linked to the spill’s impact on birds and mammals.

“This indictment came as a result of many local and state agencies working together to present both inculpatory and exculpatory evidence to a hard-working Santa Barbara Grand Jury,” said District Attorney Dudley.  “The indictment is a response to the evidence presented and speaks to the alleged criminal culpability of both the corporation and an individual who are alleged to have caused harm to Santa Barbara County’s magnificent natural surroundings and death to some of it’s majestic wildlife.”

Plains All-American Pipeline faces up to $2.8 million in fines plus additional costs and penalties.

Attorney General Harris and District Attorney Dudley launched a joint criminal investigation 72 hours after the spill was discovered and in June, Attorney General Harris traveled to the site of the spill and met with command staff leading the cleanup and investigation.  More information is available here: https://oag.ca.gov/news/press-releases/photo-release-attorney-general-kamala-d-harris-tours-oil-spill-clean-refugio.

In 2011, Attorney General Kamala D. Harris joined federal, state, and local officials in securing a comprehensive settlement with the owners and operators of the M/V Cosco Busan over the major 2007 oil spill in the San Francisco Bay.