Debt Adjustment Services

State ex rel Cordray v. Van Putten, Cuyahoga Cty. Case No. 08 679588, PIF 2784

The Court found that the Defendant violated the TSSA and the CSPA by: 1) engaging in telephone solicitations while failing to obtain a certificate of registration as a telephone solicitor, 2) making false or misleading statements to induce a purchaser to pay for goods or services including, but not limited to, promises to help people save their homes, delay foreclosure, and modify loan obligations, 3) failing to obtain the original, signed copy of the confirmation of sale from consumers.  Defendant violated the CSPA by: 1) accepting money from consumers for goods and services and failing to make full delivery or a refund, 2) advertising foreclosure assistance services via direct mail solicitations and failing to clearly and conspicuously disclose, in close proximity to the offer, all material terms and conditions, including but not limited to the fact that Defendant only agrees to provide services to the consumer until 6 months after a foreclosure complaint is filed, not until the consumer's home is saved, 3) securing the first contact with consumers through deception, 4) failing to register all fictitious business names with the Ohio Secretary of State, 5) failing to honor the written refund policy.  Defendant violated the DAA and the CSPA by engaging in debt adjusting activities without complying with the regulations under the Debt Adjuster Act.  Defendant ordered to pay $8,880 in consumer restitution and $150,000 in civil penalties.

Home Improvements

Warren v. Denes Concrete, Inc. (Lorain Cty.), 2009-Ohio-2784, PIF 2785

The parties entered into an agreement that Denes Construction would install a new driveway and replace the concrete slab under Warren's front steps.  Warren refused to follow Denes's advice that he have a footer installed under the slab and a French drain at the end of the driveway.  Denes's advice and Warren's rejection of same was not included in the contract.  Warren later developed a problem with water pooling at the end of the driveway and filed suit.  The Court of Appeals reversed the trial court, holding that it was not a violation of the CSPA to fail to include the fact that Denes had recommended the installation of the footer and French drain and that Warren had refused to do so.  The Court also found that the trial court erred in finding that Denes had breached the warranty included in the contract, stating that there was no law requiring a seller to have a consumer "sign off" on the seller's recommendations in order to avoid liability for a breach of warranty.  The trial court erred in finding that Denes' performance under the contract violated the CSPA and awarding Warren treble damages.  The trial court was correct in finding that Denes had violated the CSPA by failing to give Warren a receipt for his payment, even though the payment was not for the full amount of the contract.  It was not error for the trial court to have balanced the equities between the parties in refusing to issue an injunction or to have failed to award Warren attorney fees for the CSPA violations.  The case was reversed and remanded.

In re Leidheiser, ND OH BK Case No. 08-30646, PIF 2794

Debtor had contracted with consumer to perform home improvements.  Debtor failed to complete the home improvements in a workmanlike manner, failed to comply with applicable building codes and standards, and failed to honor his warranty.  Consumer filed suit in state court, and Debtor filed for bankruptcy shortly before the scheduled trial date, staying the action.  The consumer filed a proof of claim for her damages under the CSPA violations alleged in her state court action.  Liability for the violation was not contested, so the Court addressed the issue of the amount of the consumer's claim.  The consumer had agreed to pay a total of $180,952.03 for the home improvements, and had already paid the Debtor $134,301.78, leaving a balance of $46,650.25.  The consumer had received an estimate of $104,586.00 to complete the work.  The Court calculated the consumer's claim as $57,935.75 and then trebled that amount to $173,807.25 as there were cases in the Public Inspection File prior to the date of the home improvement contract that held Debtor's actions were violations of the CSPA.

Motor Vehicles

In re Dave Dennis, Inc., AVC No. 351372, PIF 2783

Supplier agrees to refrain from using unfair, deceptive, and/or misleading advertisements and from representing that the subject of a consumer transaction is of a particular standard, quality, grade, style, prescription, or model, if it is not.  Additionally, supplier agrees to refrain from using any statement, layout, or illustration in any advertisement or sales presentation which could create in the mind of a reasonable consumer a false impression as to any material aspect of said advertised or offered vehicle, or to convey or permit an erroneous impression as to which vehicles are offered for sale at which prices in violation of OAC 109:4-3-16(B)(3).  Supplier to pay $10,000 for attorney fees and investigative costs.

In re Golden Rod Auto Wholesale, Inc., AVC No. 353092, PIF 2790

Supplier is licensed as a used motor vehicle dealer by the Ohio Bureau of Motor Vehicles, but is not a member of the Title Defect Recision Fund.  Supplier has sold used motor vehicles without having title to the vehicle in the supplier's name.  Supplier agrees to join the TDR Fund, agrees not to sell any motor vehicle to which it does not have title, and agrees to register its fictitious name with the Ohio Secretary of State.  Supplier to pay $250.00 for investigative and administrative costs.

In re Golden Rod Auto, Inc., AVC 353092, PIF 2791, PIF 2791

Supplier agrees to:  1) complete repairs within eight weeks of accepting money from a consumer for goods or services, 2) provide consumers with a form indicating the date, identity of the supplier, the consumer's name and telephone number, the reasonably anticipated completion date, the anticipated cost of the repair or service, and a disclosure that the consumer has the right to a written estimate, oral estimate or no estimate, 3) conspicuously display a sign stating the consumers' right to a written estimate, oral estimate, or no estimate, 4) obtain oral or written authorization for consumers for the anticipated cost of any additional, unforeseen, but necessary repairs or services when the cost of those repairs or services is 10% or more of the original estimate, 5) not charge for any repair or service which has not been authorized by the consumer, 6) register its fictitious name with the Ohio Secretary of State.  Supplier to pay $250.00 for investigative and administrative costs.

Prescription Medication

In re Schering-Plough Corp.; Merck & Co.; MSP Singapore Co., AVC, PIF 2795

Suppliers agree to be bound by the provisions set forth in the Agreed Entry and Final Judgment Order in State ex rel. Winters v. Merck & Co., Franklin County Case No. 08-CVH-05-7357, May 28, 2008 (PIF 2669).  Suppliers agree to: 1) register clinical trials and submit results to the registry and results data bank, 2) not make any written or oral claim that is false, misleading or deceptive regarding any FDA-approved product, 3) not make any written or oral promotional claims of safety or effectiveness of any FDA-approved product in a manner that violates the FDCA, 4) submit all new direct-to-consumer television advertising campaigns to the FDA for pre-review, wait for a response from the FDA before running the campaign, and to modify the campaign consistent with any written comments from the FDA, 5) not use any information from any clinical study that is inadequate in design, scope or conduct or that implies that the study reflects larger or more general experience with the drug than it actually does, 6) comply with the ACCME Standards for Commercial Support, 7) comply with the prohibitions on stock ownership set forth in paragraph 21, 8) enhance the process for reviewing potential conflicts of interest for members of Data Safety Monitoring Boards, 9) require that all individuals named as authors  on any sponsored manuscript have made substantial contribution to the conception and design or acquisition of data, or analysis and interpretation, have been involved in drafting the article or revising it critically and have final approval rights for the final published version.  Suppliers to pay the states $5,400,000.00.

Privacy

In re The TJX Companies, Inc., AVC, PIF 2786

Following a breach of security where intruders gained unauthorized access to consumers' personal information obtained through credit or debit card transactions, supplier entered into an AVC where it agreed to: 1) implement and maintain a comprehensive Information Security Program designed to protect the security, confidentiality, and integrity of consumers' personal information, 2) make specific upgrades of security to ensure the safety of the personal information, 3) provide Compliance Certifications to show compliance with the provisions of the AVC, 4) notify the various Attorneys General of any subsequent security breaches, 5) participate in various pilot programs to test new security-related payment card technology, 6) obtain an assessment and report from a third party professional regarding the effectiveness of the supplier's security program and provide same to the Attorneys General.  Supplier to pay the states $9.75 million to be distributed among the participating states.

Residential Mortgage

Wilborn v. Bank One Corporation, 121 Ohio St. 3d 546, 2009-Ohio-306, PIF 2787

The Court found that a provision in a residential mortgage contract that requires a defaulting borrower to pay the lender's reasonable attorney fees as a condition of terminating any pending foreclosure action and reinstating the loan is not contrary to Ohio law or against public policy.

State ex rel. Cordray v. Apex Mortgage Services LLC, Belmont Cty. Case No. 07 CV 261, PIF 2789

The Court found that the Defendant committed unconscionable acts in violation of 1345.031(B)(10) and OAC 109:4-3-24(B) and unfair and deceptive acts in violation of 1345.02 by communicating statements of anticipated or desired appraisal valuations of residential property and knowingly instructing and attempting to compensate, induce, or coerce a licensed appraiser, for the purpose of corrupting and influencing the independent judgment of the appraiser.  Defendant ordered to pay consumer restitution of $1,800.00 and civil penalties of $50,000.

Retail Installment Sales Act

Ford Motor Credit Company v. Jones (Cuyahoga Cty.), 2009-Ohio-3298, PIF 2792

Appellant co-signed a lease for a motor vehicle.  The primary lessor defaulted on the lease, the vehicle was repossessed and sold at auction leaving a deficiency balance of $7,997.52.  The trial court granted the summary judgment motions of Ford and Mullinax, finding that no violations of RISA or CSPA had occurred.  On appeal, the Appellate Court affirmed the trial court's decision.  The Court found that the attorney fee provision in the lease did not violate RISA because the language of the contract provided for recovery of attorney fees "where permitted by law."  As Ohio law prohibits attorney fee provisions in consumer contracts, that provision in the subject contract was void.  Since neither Ford nor Mullinax even sought to collect attorney fees, Appellant sustained no damages and summary judgment for Ford and Mullinax was appropriate.  The Court also found that Appellant's CSPA claims were made more than two years after the date of the transaction and were therefore time barred.  Additionally, Ford was an assignee of the lease by Mullinax, and the lease did not include the holder-in-due-course language; therefore, Ford had no derivative liability for any violations committed by Mullinax.  The trial court's decision was affirmed.

Telemarketing Sales Rule

Hamilton v. Voxeo Corporation, SD Ohio Case No. 07-CV-404, PIF 2793

The Court found that Plaintiff could not recover damages for United Health's refusal to send him a copy of its do-not-call policy.  Plaintiff could only recover damages for calls made at a time when the Defendant did not have such a policy in place, and the Court held that he had failed to prove that any of the calls he received were made at a time when Defendant did not have a do-not-call policy.

Telephone Consumer Protection Act

Charvat v. Dispatch Consumer Services, Inc., 95 Ohio St. 3d 505, 2002-Ohio-2838, PIF 2788

Plaintiff, a subscriber to the Sunday newspaper, received unsolicited phone calls to purchase a weekday subscription to the paper.  After Plaintiff requested to be placed on the company's internal do-not-call list, he received additional telemarketing calls.  The Supreme Court found that a request to be placed on a company's internal do-not-call list terminates the established business relationship set forth in 47 USC 227(a)(3)(B).  The Court found that the FCC had directly addressed this issue in its commentary on the rule defining an established business relationship, 47 CFR 64.1200(f)(4) when it said that "a customer's request to be placed on the company's do-not-call list terminates the business relationship between the company and that customer for the purpose of any future solicitation."  Appeals court decision was reversed and the case was remanded to the trial court.