Dec 18, 2020

To embed, copy and paste the code into your website or blog: <iframe frameborder="1" height="620" scrolling="auto" src="//www.jdsupra.com/post/contentViewerEmbed.aspx?fid=c091de4a-305f-4179-bb72-a4a32b329967" style="border: 2px solid #ccc; overflow-x:hidden !important; overflow:hidden;" width="100%"></iframe> COVID-19 Defunct Travel Agency To Refund Travelers Who Paid Twice for Their Lodgings Massachusetts AG Maura Healey reached a settlement with online travel agency BookIt Operating LLC d/b/a BookIt.com and its CEO (collectively “BookIt”) to resolve allegations that it knowingly collected money from consumers for travel made impossible by COVID-19 in violation of the Massachusetts Consumer Protection Act. As previously reported , the complaint alleged that BookIt suspended its business in March 2020 and stopped paying hotels and resorts for paid-for reservations, including for trips already in progress, which resulted in consumers having to pay twice for the same stay. BookIt also refused to issue refunds to customers. Under the terms of the proposed consent judgment , BookIt will pay over $550,000 in refunds to make whole hundreds of affected customers. Consumer Financial Protection Bureau Alleged Use of Consumers’ Credit Score Without Proper Notice Results in $600,000 Settlement The Consumer Financial Protection Bureau (“CFPB”) and Arkansas AG Leslie Rutledge reached a settlement with home-security company Alder Holdings, LLC (“Alder”) to resolve allegations that it used consumers’ credit scores to price their offerings without providing proper notice in violation of the Fair Credit Reporting Act and its implementing regulation, Regulation V, and the Dodd–Frank Wall Street Reform and Consumer Protection Act. The complaint alleged that Alder charged different amounts for the activation fee of its security system equipment on the basis of consumers’ credit scores, with the fee amount being generally inversely correlated with the credit score. Alder allegedly did not provide notice of its risk-based pricing to consumers and did not notify them that their credit scores may impact whether they will be charged an activation fee and the amount of the fee. Under the terms of the proposed stipulated judgment , Alder will pay a $600,000 civil money penalty to the CFPB, of which $100,000 will be remitted if Alder pays that amount to Arkansas to settle a related lawsuit filed by AG Rutledge and pending in state court. Alder also agreed to provide proper notices to consumers and to submit for review a comprehensive compliance plan to the CFPB. Data Privacy & Security Your Vendor’s Keeper: FTC Holds Company Responsible for Its Vendor’s Data Security Lapses The FTC reached a settlement with data analytics company Ascension Data & Analytics, LLC (“Ascension”) to resolve allegations that it failed to properly oversee a vendor’s handling of sensitive consumer information in violation of the Gramm-Leach Bliley Act’s implementing rule, the Standards for Safeguarding Customer Information Rule. According to the complaint , an Ascension-hired vendor performed text recognition scanning on tens of thousands of mortgage documents that contained sensitive personal data, including social security numbers, birth dates, and credit files, and then stored the scans on a cloud server in plain text and without any security measures to prevent unauthorized access. The complaint also alleges that the server with this data was accessed multiple times, including by computers with IP addresses associated with Russia and China. Under the terms of the proposed consent order , among other things, Ascension agreed to implement a comprehensive data security program, including requiring each vendor to provide information on its data security programs and taking measures to assess the cybersecurity risk to sensitive information shared by Ascension with each vendor. Ascension is also required to undergo independent third-party assessments of its data security program and to designate an employee to oversee and be responsible for the data security program. Financial Industry Private Equity Firm Settles Allegations of Turning Blind Eye to Landlord’s Wrongdoing New York AG Letitia James reached a settlement with private equity firm Madison Realty Capital Advisors, LLC (“Madison Realty Capital”) to resolve allegations that its financing helped a now-bankrupt New York City landlord to engage in fraudulent activity and tenant harassment in violation of New York’s consumer protection laws. According to the assurance of discontinuance , Madison Realty Capital provided financing to Raphael Toledano and associated entities for the acquisition of a portfolio of rent-stabilized apartments, which Toledano then attempted to convert to market-rate apartments through forced apartment-vacating practices like tenant harassment and failure to provide necessary repairs, and through renovations that did not comply with New York’s building code. The assurance of discontinuance further alleges that Madison Realty Capital knew or should have known about Toledano’s history as a landlord and that his proposed conversion scheme was illegal. Under the terms of the assurance of discontinuance, among other things, Madison Realty Capital and Toledano will pay $150,000 to the AG’s office to be used for restitution. Madison Realty Capital will also take ownership of Toledano’s portfolio of buildings, subject to $1.05 million in rent credits, which will be shared among the tenants who still remain in the portfolio apartments, and ensuring placement of 10 formerly-homeless families in its buildings. In addition, Madison Realty Capital will register more than 70 percent of the portfolio apartments as affordable housing, with rent at or below $2,000 per month. Labor & Employment Supreme Court Sides with States’ Right to Regulate Pharmacy Benefit Managers Reimbursement Rates Arkansas AG Leslie Rutledge , obtained a ruling from the U.S. Supreme Court in Rutledge v. Pharmaceutical Care Management Association, 18-540, upholding Arkansas’s right to regulate the prices at which pharmacy benefit managers (“PMBs”) reimburse pharmacies for drugs covered by prescription-drug plans. A PBM challenged the Arkansas law that regulated PBM reimbursement rates (“Act 900”), arguing that it was preempted by the Employee Retirement Income Security Act (“ERISA”), and the U.S. Court of Appeals for the Eighth Circuit agreed. AG Rutledge appealed. The Court’s decision held that ERISA did not preempt Act 900 because it did not relate to or have an impermissible connection with an ERISA plan. Rather, Act 900 was just a form of cost regulation that applied to PBMs regardless of whether they managed an ERISA plan or not, and therefore it did not govern a central matter of plan administration or interfere with nationally uniform plan administration as is required for ERISA preemption to be applicable. As previously reported , AG Rutledge’s position was supported by a bipartisan group of 46 AGs who filed an amicus brief in the case, arguing that a more expansive interpretation of ERISA’s preemption clause would interfere with states’ traditional authority to regulate businesses for the purpose of protecting the health and welfare of their residents. Pharmaceuticals Bipartisan Group of Attorneys General Urge Federal Government to Enforce Mandated Drug Discounts A bipartisan group of 29 AGs, led by California AG Xavier Becerra , Connecticut AG William Tong , Kansas AG Derek Schmidt, and Nebraska AG Doug Peterson , sent a letter to the U.S. Department of Health & Human Services (“HHS”) Secretary Alex Azar regarding enforcement of the 340B Drug Pricing Program, which requires pharmaceutical companies, as a condition of coverage by Medicaid and Medicare Part B, to enter into Pharmaceutical Pricing Agreements (“PPAs”) with HHS that obligate them to offer each covered medication below an applicable ceiling price to healthcare providers serving uninsured and low-income patients. The letter urges HHS to hold accountable drug manufacturers refusing to provide discounts to federally qualified health care providers as required under the 340B Drug Pricing Program, including by requiring such companies to reimburse eligible healthcare providers or terminating the companies’ PPAs, which will terminate their eligibility for Medicaid and Medicare Part B coverage. As previously reported , AG Becerra has been nominated to serve as HHS Secretary in the incoming Biden Administration.