Lawsuits & Settlements

SAN FRANCISCO – Attorney General Kamala D. Harris today announced that Capital Sweepstakes Systems, Inc. (Capital Sweepstakes), a major sweepstakes gambling software provider, will pay $700,000 in civil penalties and costs and admit that it violated state gambling laws, in a case brought by the joint state and local Sweepstakes Gambling Task Force.

This settlement resolves allegations that Capital Sweepstakes violated state laws governing illegal gambling and unfair competition.  In addition to the $700,000 it will pay, Capital Sweepstakes is barred from conducting any kind of sweepstakes operations in the state for 10 years.

“Capital Sweepstakes profited by targeting low-income communities, misrepresenting their slot-machine style operations as legal enterprises and creating magnets for crime,” said Attorney General Harris. “My office is dedicated to combatting and dismantling illegal and unregulated gambling operations statewide. I thank our Gambling Task Force and the Bureau of Gambling Control for their tireless investigative work.”

This case stems from a joint investigation conducted by the Federal Bureau of Investigation (FBI) and the California Department of Justice, Bureau of Gambling Control that included extensive undercover work and multiple search warrants being served on Capital Sweepstakes’ California operations.  Additionally, cash and accounts totaling more than $3,000,000 were seized in the investigation. 

As a result of the joint investigation, Capital Sweepstakes and co-defendant Kevin Freels pled guilty to federal felony gambling charges and agreed to forfeit $1.6 million to the federal government, in addition to the $700,000 in civil penalties and costs paid to resolve the state’s suit, for a total of $2.3 million. 

Software developers like Capital Sweepstakes design software systems that create interactive gambling-themed games that they represent as lawful promotional sweepstakes for play at sweepstakes cafés, but they constitute illegal gambling under state law.  These illegal operations often are magnets for other crime at the local level and generally target a vulnerable low-income clientele. 

Sweepstakes gambling enterprises are a nationwide problem and are estimated to earn over $10 billion a year.  Attorney General Harris recently filed an amicus brief in the California Supreme Court in support of several cases that the Kern County District Attorney’s Office brought against sweepstakes gambling operations.  The Supreme Court ruled unanimously that these sweepstakes gambling operations are illegal.  

Attorney General Harris continues to take the lead in the battle against these illegal gambling operations, having been involved in seizures of illegal sweepstakes gambling equipment and funds across the state and pioneering the use of the Unfair Competition Law to provide stronger monetary remedies against them. 

The Sweepstakes Gambling Task Force was formed to bring an end to illegal sweepstakes gambling operations in California and includes the California Attorney General’s Office, Contra Costa County District Attorney Mark A. Peterson, Fresno County District Attorney Lisa A. Smittcamp, Kern County District Attorney Lisa S. Green, Merced County District Attorney Larry Morse II, Riverside County District Attorney Michael A. Hestrin, San Diego County District Attorney Bonnie M. Dumanis, Sonoma County District Attorney Jill R. Ravitch, Tulare County District Attorney Timothy Ward, and Los Angeles City Attorney Michael N. Feuer.

LOS ANGELES –  California Attorney General Kamala D. Harris released the following statement in response to today’s ruling from the U.S. Court of Appeals for the Fifth Circuit, denying the U.S. Department of Justice’s request for an emergency stay in Texas, et al. v. United States, et al., the lawsuit against President Obama’s immigration executive actions. Attorney General Harris and 14 other Attorneys General had echoed the federal government’s call for an emergency stay, allowing the executive actions to move forward, in a friend-of-the-court brief.

“President Obama proposed commonsense actions to help address our broken immigration system and provide a path out of the shadows for over one million hard-working undocumented Californians eligible for deferred action,” said Attorney General Harris. “I am disappointed that the Fifth Circuit Court of Appeals denied our request for a stay to allow these lawful actions to immediately move forward. California will continue to lead the way in defending the President’s actions so that we can enjoy a safer, more prosperous California.”

LOS ANGELES – Attorney General Kamala D. Harris today announced that the California Department of Justice—along with the Attorneys General of the other 49 States and the District of Columbia, the Consumer Financial Protection Bureau, and the Federal Communications Commission—reached settlements with Sprint Corporation (Sprint) and Cellco Partnership d/b/a Verizon Wireless (Verizon) to resolve allegations that Sprint and Verizon placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumers, a practice known as “mobile cramming.”

The state of California will receive $549,731.29 in the Sprint settlement, and $733,298.41 in the Verizon settlement. 

“To boost their profits, Sprint and Verizon deceived consumers and added unauthorized charges to their monthly bills,” Attorney General Harris said. “This settlement holds Sprint and Verizon accountable for their actions, ends these bad business practices and refunds consumers. I encourage Californians who were victims of Sprint and Verizon’s cramming practices to file a claim immediately.”

Under the terms of the settlements, Sprint will pay $68 million and Verizon will pay $90 million. Of this amount, Sprint and Verizon are required to provide $50 million and $70 million, respectively, to consumers who were victims of cramming.  Sprint and Verizon will each distribute refunds to harmed consumers through redress programs that will be under the supervision of the Consumer Financial Protection Bureau. 

Consumers who have been “crammed” often have charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores that the consumers have never heard of or requested. 

Sprint and Verizon are the third and fourth mobile telephone providers to enter into a nationwide settlement to resolve allegations regarding cramming. In December 2014, Attorney General Harris reached a $90 million settlement with T-Mobile and a $105 million settlement with AT&T in October of 2014. All four mobile carriers announced they would cease billing customers for commercial PSMS in the fall of 2013.

Consumers can submit claims under the redress programs by visiting www.SprintRefundPSMS.com and/or www.CFPBSettlementVerizon.com.  On those websites, consumers can submit claims, find information about refund eligibility and how to obtain a refund, and can request a free account summary that details PSMS purchases on their accounts.   Consumers who have questions about the redress programs can visit the program websites or call (877) 389-8787 (Sprint), and/or (888) 726-7063 (Verizon).

The settlements, like the settlements entered into by AT&T and T-Mobile in late 2014, require Sprint and Verizon to stay out of the commercial PSMS business—the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem.  Under each of the four settlements, the carriers, including Sprint and Verizon, must also take a number of steps designed to ensure that they only bill consumers for third-party charges that have been authorized, including the following:

• The carriers must obtain consumers’ express consent before billing consumers for third-party charges, and must ensure that consumers are only charged for services if the consumers have been informed of all material terms and conditions of their payment;
• The carriers must give consumers an opportunity to obtain a full refund or credit when they are billed for unauthorized third-party charges;
• The carriers must inform their customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers of how those third-party charges can be blocked if the consumers do not want to use their phone to pay for third-party products; and
• The carriers must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from the carrier’s own charges, and must include in that same section information about the consumers’ ability to block third-party charges.

SAN FRANCISCO — Attorney General Kamala D. Harris today announced an $11.5 million settlement with Phillips 66 and ConocoPhillips. The settlement resolves law enforcement allegations that the companies violated state laws governing the proper operation and maintenance of underground storage tanks used to store gasoline for retail sale. The companies failed to comply with hazardous materials and hazardous waste laws at over 560 gasoline stations owned or operated by the companies in the state of California.

“Phillips 66 and ConocoPhillips failed to adequately monitor hazardous materials in large gasoline holding tanks, which endangered nearby water supplies," said Attorney General Harris. "This settlement holds Phillips 66 and ConocoPhillips accountable for this dangerous negligence and will ensure future compliance with environmental laws.”

The Attorney General’s office was joined in this enforcement action by Alameda County District Attorney Nancy E. O’Malley, El Dorado County District Attorney Vern Pierson, Merced County District Attorney Larry D. Morse II, Nevada County District Attorney Clifford Newell, Placer County District Attorney R. Scott Owens, San Bernardino County District Attorney Michael A. Ramos, and Stanislaus County District Attorney Birgit Fladager.

“My office is committed to protecting the environment and the public from potential exposure to hazardous materials,” says District Attorney O’Malley. “When corporations place our valuable water resources in jeopardy by failing to comply with environmental laws and regulations, they must be held accountable.  The settlement today achieves this important goal.”

The complaint, filed in January of 2013, alleges that – since 2006 – Phillips 66 and ConocoPhillips have violated anti-pollution laws with respect to underground storage tanks by failing to properly maintain leak detection devices, test secondary containment systems, conduct monthly inspections, train employees in proper protocol, and maintain operational alarm systems, among other violations.

A statewide investigation found violations of hazardous materials and hazardous waste laws and regulations at gas stations in 34 counties across the state. The companies have sold nearly all of their interests in the underground storage tank sites in California. The parties have agreed to resolve the matter, and the Alameda County Superior Court approved the final judgment.

Deputy Attorneys General Brett J. Morris and Jason P. Garelick handled the case for Attorney General Harris’ Environment Section.

A copy of the settlement agreement is attached to the online version of this release at oag.ca.gov.

SAN FRANCISCO – Attorney General Kamala D. Harris and the Regional Water Quality Control Board, San Francisco Bay Region, along with the U.S. Environmental Protection Agency and the U.S. Department of Justice, today announced a $7.5 million settlement with Lehigh Cement to resolve allegations of environmental violations. The settlement requires that the Lehigh cement plant near Cupertino reduce toxic discharges to Permanente Creek, a tributary to San Francisco Bay, and pay $2.55 million in civil penalties.

"Lehigh Cement discharged millions of gallons of industrial wastewater that flowed into the San Francisco Bay," said Attorney General Kamala D. Harris.  "This settlement holds Lehigh Cement accountable for its actions and will prevent future toxic discharges.  I thank our state and federal partners for their work to protect this precious resource and consumers from the serious environmental and health damage caused by water pollution.”

“Today’s Clean Water Act settlement, done jointly with the state of California, will remove selenium and other toxic substances from Permanente Creek and help protect the fragile and life-sustaining ecosystem of San Francisco Bay,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “By bringing this older facility up to contemporary standards, and by pushing it to introduce cutting-edge treatment technology, the Department of Justice and our partners are helping create a level playing field, where all industry members are held to the same standards and no company can gain an economic advantage over its competitors by shortchanging environmental compliance.”

“EPA and California are working together to enforce the Clean Water Act and help restore San Francisco Bay,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest. “Every action we take to remove selenium and other toxic metals improves water quality and leads to a healthier and more resilient Bay.”

“This settlement will result in important reductions in pollutant discharges, in facility upgrades, and in improvements to help protect and restore water quality in Permanente Creek and San Francisco Bay,” said Bruce Wolfe, San Francisco Bay Regional Water Board Executive Officer. “We will continue our multiagency efforts to regulate all water quality aspects of this facility, including installation of the full-scale wastewater treatment system, restoration of stream habitat, and control of stormwater runoff.” 

As part of the settlement, the cement plant, owned by Hanson Permanente Cement Inc. and operated by Lehigh Southwest Cement Co., will spend more than $5 million to install wastewater treatment to significantly reduce its selenium discharges. In addition, Lehigh and Hanson will be required to make other facility improvements to prevent future violations.

Over a five-year period, Lehigh’s limestone mine and cement plant discharged millions of gallons daily of quarry process water and stormwater polluted with thousands of pounds of sediment, and hundreds of pounds of selenium and other toxic metals, into Permanente Creek, in violation of the Clean Water Act.

The proposed Clean Water Act settlement, is subject to a 30-day public comment period and court approval. Details of the settlement are available at: http://www.justice.gov/enrd/Consent_Decrees.html

SAN FRANCISCO - On Thursday, May 1, 2014, Attorney General Kamala D. Harris announced a $3.75 million settlement with eBay over allegations the company violated state anticompetitive laws by making a “no-poach” agreement with Intuit between 2006 and 2009.

If you lived in California between January 1, 2005 and May 1, 2014 and were employed by eBay or Intuit during that time, you may be eligible for payment from a parens patriae settlement negotiated on your behalf by the Attorney General of California.  Eligible employees, current and former employees of eBay and Intuit, have until February 25, 2015 to submit a claim for restitution.  If you believe you are eligible but did not receive a notice, please visit the claims website for more information. Claims submitted after February 25, 2015 will not be processed, so eligible individuals should submit claims through the claims website or by mail as soon as possible.

A portion of the settlement fund is being used to pay restitution to individuals employed in California by eBay or Intuit since 2005. Restitution payments will be made to three distinct pools of current and former employees. The first pool of approximately forty individuals who were employed by Intuit and considered for but not offered a position at eBay, will receive between $5,000 and $10,000 each.

The second pool of approximately 950 individuals who were employed by Intuit and applied for but were not offered a position at eBay, will receive between $1,000 and $1,500 each. The third pool includes current and former employees who fall within the terms of the settlement but are not included in the first or second pool. While these individuals did not apply for jobs at the other company, they may have been indirectly affected by the anticompetitive conduct and will receive a maximum payment of $150.

For more information, please visit the claims website at http://www.agtechemploymentsettlement.com/ where claims can be submitted either electronically or by downloading and printing a paper form.

This release is a follow-up to the initial settlement announcement available at http://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-reaches-4-million-settlement-ebay-over.

SAN FRANCISCO – Attorney General Kamala D. Harris, along with the U.S. Department of Justice and the attorneys general of eighteen states and the District of Columbia, today announced a settlement with Standard & Poor’s Financial Services LLC (S&P) and its parent company, McGraw-Hill Financial Inc., to resolve federal and state civil claims related to S&P’s conduct in inflating ratings of residential mortgage-backed securities and structured investment vehicle notes.  

Combined with a separate settlement also announced today resolving a lawsuit filed by the California Public Employees’ Retirement System (CalPERS), S&P will pay a total of $1.5 billion to federal and state government entities. The State of California, through Attorney General Harris’ office, will recover $210 million in damages, from which CalPERS and the California State Teachers’ Retirement System (CalSTRS) will receive allocations for their losses on investments of certain S&P-rated securities.  Separately, S&P will also pay CalPERS $125 million to settle CalPERS’ specific lawsuit.  The remainder of the total settlement proceeds will be distributed amongst the U.S. Department of Justice and the other nineteen attorneys general.   

 “S&P profited by misleading investors who trusted its ratings,” Attorney General Harris said. “California’s public pension funds suffered significant losses due to S&P’s failure to honestly and accurately disclose the risk of the very investments that caused an international economic recession.  This settlement holds S&P accountable for financial losses caused by these misrepresentations and compensates our pension funds.”

This settlement is the latest in several resolutions holding responsible the institutions that contributed to the financial crisis.  To date, Attorney General Harris has recovered over $900 million for California’s public pension funds.  In August 2014, Attorney General Harris announced a $300 million settlement with Bank of America over its misrepresentations in residential mortgage-backed securities sold to CalPERS and CalSTRS.  Similar settlements were reached in July 2014 with Citigroup Inc. for nearly $200 million and in November 2013 with J.P. Morgan Chase & Co. for $300 million.

An investigation conducted by Attorney General Harris showed that S&P systematically misrepresented to the public, and to CalPERS and CalSTRS, that its ratings of structured finance securities were based on an objective and reliable analysis and not influenced by S&P’s economic interests.  Investors relied on these ratings to invest in the structured finance securities, the collapse of which led to the financial crisis.  

As part of the settlement, S&P agreed to a statement of facts which indicate that, despite its claims of objectivity and independence, it overruled the recommendations of its ratings experts out of concern that S&P’s business would be harmed if the company did not rate its clients’ securities positively.  The settlement does not absolve S&P or its employees from any possible criminal charges.

The settlement with S&P arises from the investigation into mortgage-backed securities by Attorney General Harris’ Mortgage Fraud Strike Force, which was formed in May 2011 to comprehensively investigate misconduct in the mortgage industry.  The Attorney General's additional efforts to investigate the mortgage crisis include securing approximately $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.

For more information on the U.S. Department of Justice settlement, visit: http://www.justice.gov/

LOS ANGELES – Attorney General Kamala D. Harris today announced that the California Department of Justice—along with the Attorneys General of the other 49 States and the District of Columbia, the Federal Trade Commission, and the Federal Communications Commission—reached settlements with T-Mobile USA, Inc. to resolve allegations that T-Mobile placed charges for third-party services on consumers’ mobile telephone bills that were not authorized by the consumer, a practice known as “mobile cramming.” The state of California received $834,782 in the settlement.

“T-Mobile deceived its customers by adding unauthorized charges to their bills each month, in order to boost the company’s profits. This settlement puts an end to these bad business practices, refunds consumers and brings transparency to T-Mobile bills,” Attorney General Harris said.  “I encourage Californians who were victims of T-Mobile’s cramming practices to file a claim immediately.”

Under the settlement, T-Mobile must provide each victim of cramming who files a claim under its Premium SMS Refund Program an opportunity for a full refund.  The settlement terms require that T-Mobile pay at least $90 million; of this sum, at least $67.5 million must be paid to consumers—a portion of which may be paid by forgiving debts consumers may owe T-Mobile.  T-Mobile will also pay $18 million to the Attorneys General and $4.5 million to the Federal Communications Commission.

Consumers who have been “crammed” often complain about charges, typically $9.99 per month, for “premium” text message subscription services (also known as “PSMS” subscriptions) such as horoscopes, trivia, and sports scores, that the consumers have never heard of or requested.  The Attorneys General and federal regulators allege that cramming occurred when T-Mobile placed charges from third-parties on consumers’ mobile telephone bills without the consumer’s knowledge or consent. 

T-Mobile is the second mobile telephone provider to enter into a nationwide settlement to resolve allegations regarding cramming; Attorney General Harris announced a $105 million settlement with AT&T in October of this year. T-Mobile and AT&T were among the four major mobile carriers—in addition to Verizon and Sprint—that announced they would cease billing customers for commercial PSMS in the fall of 2013.

Consumers can submit claims under the Program by visiting http://www.t-mobilerefund.com.  On the website, consumers can submit a claim, find information about refund eligibility and how to obtain a refund, and can request a free account summary that details PSMS purchases on their accounts.   Consumers who have questions about the Program can visit the claims website or call the Refund Administrator at (855) 382-6403.

The settlement requires T-Mobile to stay out of the commercial PSMS business—the platform to which law enforcement agencies attribute the lion’s share of the mobile cramming problem.  T-Mobile must also take a number of steps designed to ensure that it only bills consumers for third-party charges that have been authorized, including the following:

• T-Mobile must obtain consumers’ express consent before billing consumers for third-party charges, and must ensure that consumers are only charged for services if the consumer has been informed of all material terms and conditions of their payment;
• T-Mobile must give consumers an opportunity to obtain a full refund or credit when they are billed for unauthorized third-party charges;
• T-Mobile must inform its customers when they sign up for services that their mobile phone can be used to pay for third-party charges, and must inform consumers of how those third-party charges can be blocked if the consumer doesn’t want to use their phone as a payment method for third-party products; and
• T-Mobile must present third-party charges in a dedicated section of consumers’ mobile phone bills, must clearly distinguish them from T-Mobile charges, and must include in that same section information about the consumers’ ability to block third-party charges.

SAN FRANCISCO – Attorney General Kamala D. Harris and Alameda County District Attorney Nancy E. O’Malley today announced a settlement with AT&T to resolve allegations that hundreds of AT&T’s California facilities unlawfully disposed of hazardous waste and material over a nine-year period. As part of the settlement, AT&T will pay $23.8 million. In addition, AT&T will spend an estimated $28 million over the next five years to implement the enhanced environmental compliance measures required by the settlement.  The settlement and proposed judgment, filed in Alameda County Superior Court, requires approval from the court before becoming final.

“This settlement holds AT&T accountable for unlawfully dumping electronic waste,” Attorney General Harris said.  “The illegal disposal of hazardous waste can lead to serious environmental and health risks for California communities. AT&T will be required to implement strict compliance measures at its facilities that set an example for other companies to safeguard our communities against hazardous waste.” 

This is the first enforcement action in California against a telecommunications company for its management of electronic waste. 

“Today’s settlement marks a great victory for California’s ongoing efforts to ensure that hazardous waste is disposed of in a safe, legal and environmentally sustainable manner,” states Alameda County DA Nancy E. O’Malley. “Whether a small local business or a huge international company, my Office will pursue all necessary legal action against entities that pollute our environment.  This legal action should put others on notice that local and state agencies will continue to work together to investigate and prosecute violations against our environment.”

The civil enforcement action and proposed settlement against AT&T were filed today in Alameda County by Attorney General Harris and the District Attorney O’Malley, and is the product of a robust investigation by the two offices together with the Department of Toxic Substances Control.  The enforcement action claims that more than 235 AT&T warehouse and dispatch facilities throughout the state unlawfully handled and disposed of various hazardous wastes and materials over a nine-year period. Those hazardous wastes and materials primarily consisted of electronic equipment, batteries, aerosol cans, as well as certain gels, liquids and other items used by AT&T service technicians in delivering telephone, Internet and video services to residential and business customers in California.

In 2011, inspectors from the Alameda County District Attorney’s Office Environmental Protection Division and investigators from the California Department of Toxic Substances Control conducted a series of waste inspections of dumpsters belonging to AT&T warehouse and dispatch facilities. The inspections revealed that AT&T was routinely and systematically sending hazardous wastes to local landfills that were not permitted to receive those wastes.

Upon notice of the investigation, AT&T immediately agreed to cooperate and promptly implemented measures to halt the removal of regular trash until it could be inspected to remove any potentially hazardous wastes before they reached municipal landfills.   AT&T also has voluntarily dedicated additional resources toward environmental compliance and improving its hazardous and universal waste management compliance programs.  In addition to the $23.8 million settlement payment, AT&T expects to incur another $28 million over the next five years to implement enhanced environmental compliance measures required by the settlement.  For example, AT&T has implemented multiple layers of protection against electronic waste getting into its regular trash, including contractor inspections of “staging bins” before their contents are deposited in dumpsters, hundreds of unannounced dumpster inspections annually, and three independent audits over five years.

There are 13 AT&T facilities in Alameda County and all 13 facilities were found to be unlawfully disposing hazardous waste.

If approved by the court, under the final judgment, AT&T must pay $18.8 million in civil penalties and costs. An additional $3 million will fund supplemental environmental projects furthering consumer protection and environmental enforcement in California, and AT&T will pay a minimum of $2 million to enhance its environmental compliance. The telecom provider will be bound under the terms of a permanent injunction prohibiting similar future violations of law.

LOS ANGELES – Attorney General Kamala D. Harris today announced a $28.4 million settlement with Aaron’s, Inc., the second largest rent-to-own business in the nation, to resolve allegations that the company violated California consumer protection and privacy laws.

“Aaron’s concealed its illegal privacy and business practices from customers in a deceptive attempt to avoid California’s robust consumer protection laws and increase its profits,” Attorney General Harris said. “This settlement provides millions of dollars in restitution to consumers and requires Aaron’s to make significant changes to its business practices.”

The settlement requires Aaron’s to refund $25 million to California customers who signed lease agreements between April 1, 2010 and March 31, 2014 and to pay $3.4 million in civil penalties and fees.

Approximately 100,000 California customers will be eligible for restitution.

The complaint alleges that Aaron’s violated California’s Karnette Rental-Purchase Act, which is the strongest rent-to-own law in the country, by charging improper late fees, overcharging customers who paid off contracts early, and omitting important contract disclosures.

In addition, the complaint alleges that Aaron’s violated California state privacy laws by permitting its franchised stores to install spyware on laptop computers rented to its customers. A feature in the spyware program called ‘Detective Mode’, which was installed without consumers’ consent or knowledge, allowed the Aaron’s franchisees to remotely monitor keystrokes, capture screenshots, track the physical location of consumers and even activate the rented computer’s webcam. The installation of this software without customer consent violated California law.

Aaron’s, which is headquartered in Atlanta, GA, rents household merchandise, including furniture, appliances and electronics for a monthly or semi-monthly fee. The company operates approximately 75 stores across California (http://www.aarons.com/storelocator.aspx).

According to a Federal Trade Commission report on the rent-to-own industry, nearly all rent-to-own customers have a household income below $50,000 and the vast majority have attained a high school education or less.

Customers who are eligible for restitution will receive notice at their last known mailing address. Customers who believe they are eligible for restitution can also proactively submit a claim by visiting www.rent-to-own-settlement.com or calling 877-449-8548.

It is expected that restitution notices and payments will be mailed in early 2015 and individual restitution payments will vary based on each consumer’s contract.

As part of a stipulated judgment filed this week in Los Angeles County Superior Court, Aaron’s has agreed to full compliance with the Karnette Act in all respects and is prohibited from using or installing spyware on rented computers.

The Los Angeles County Department of Consumer Affairs provided assistance with the investigation.

Tips for consumers regarding rent-to-own businesses:

• Know your rights. Under California law, you have many important protections if you enter into a rent-to-own agreement.  For example, you may be entitled to a reduction in the amount of your lease payment if you suffer a hardship like losing your job. For more information: http://www.dca.ca.gov/publications/legal_guides/s-10.shtml.

• Read your contract carefully before signing. Make sure you understand your obligations under the agreement, including the length of time specified in the contract, and not just the cost of your monthly lease payment.

Copies of the complaint and stipulated judgment are attached to the online version of this release at www.oag.ca.gov/news.