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Annual Report
2010
Released December 28, 2010
December 28, 2010
Dear Colleagues,
Of all of the ways the Attorney General’s Office interacts with Ohioans, the work that
affects the most people directly is done through the Consumer Protection Section. Tens of
thousands of Ohioans file complaints each year with the section, which in turn helps them
recover their money or resolve an issue when they feel they have been mistreated.
In 2010, when stories surfaced about an untold number of foreclosure affidavits that were
signed en masse by major mortgage-servicing banks, we led the way nationally in the
controversy over “robo-signing” by suing GMAC Mortgage and its parent, Ally Financial
Inc., for filing fraudulent affidavits that misled courts in hundreds of Ohio foreclosures.
When similar reports surfaced regarding depositions taken by JPMorgan Chase and Bank
of America employees, we asked Chase and Bank of America to suspend judgments,
sales, evictions and property transfers involving any foreclosure case with affidavits
signed by those employees. We also sent letters to Wells Fargo and Citibank requesting
the banks meet with us to discuss their foreclosure affidavit procedures. Later, every
other state attorney general joined me in announcing a multistate investigation into robo-
signing. I serve on the investigation’s 12-member executive committee.
Through these actions and others described in this report, we sought in 2010 to use all of
the powers at our disposal to fight for Ohio consumers and their rights under the law.
Sincerely,
Richard Cordray
Ohio Attorney General
REPORT TO THE GOVERNOR AND GENERAL ASSEMBLY
ON THE OPERATIONS OF THE ATTORNEY GENERAL
UNDER CHAPTER 1345 OF THE OHIO REVISED CODE
A. SCOPE
Chapter 1345 of the Ohio Revised Code, the Consumer Sales Practices Act (CSPA),
gives the state Attorney General the duty and enforcement authority to prohibit a supplier
from committing an unfair, deceptive or unconscionable act or practice in connection
with a consumer transaction. It is the primary consumer protection statute in Ohio and
one of the most comprehensive consumer protection statutes in the nation. Since its
adoption in 1972, the CSPA has proven to be a fair and effective regulatory method,
providing protection for consumers and marketplace flexibility for businesses.
Consumer protection in Ohio has expanded throughout the years, giving the Attorney
General’s Consumer Protection Section the responsibility of enforcing 26 additional
consumer protection laws through civil legal proceedings. The section has concurrent
jurisdiction to enforce numerous federal consumer protection statutes. Although no
consumer protection statute gives the Attorney General original criminal prosecutorial
authority, if a local prosecutor declines a referral, the Attorney General is authorized to
prosecute violations of the Homebuyers’ Protection Act, Telephone Solicitations Sales
Act and Credit Services Organization.
To further protect Ohioans from predatory and illegal business practices, the section
educates consumers and businesses about Ohio consumer law and offers a complaint
resolution process to resolve disputes between consumers and businesses. In 2010, the
Consumer Protection Education Unit attended or coordinated approximately 450 events.
The Consumer Assistance Unit received more than 31,000 consumer complaints and
inquiries, assisting thousands of consumers statewide.
The CSPA requires the Attorney General to report annually to the Governor and the
General Assembly about operations related to Chapter 1345 of the Ohio Revised Code
and violations of this chapter. Here is a summary of the Consumer Protection Section’s
2010 activities as of mid-December, when this report went to print in order to meet the
Jan. 1 submission deadline.
B. ENFORCEMENT
The Attorney General is empowered to investigate CSPA violations and enforce the law.
To accomplish this, the Consumer Protection Section has several tools at its disposal.
The Attorney General may issue a cease-and-desist notice to address a supplier’s
behavior. The Attorney General has authority to enter into an Assurance of Voluntary
Compliance, a formal out-of-court agreement between the Attorney General and the
supplier in which the supplier agrees to stop violating the law, to reform business
practices, to make appropriate restitution and, when appropriate, to pay civil penalties.
Finally, the Attorney General can pursue litigation to address possible violations. Some
cases are handled as multi-state actions in cooperation with other state attorneys general.
The Legal and Investigation units work together to ensure compliance with Ohio
consumer laws. In 2010, the Consumer Protection Section opened 245 investigations,
which thus far have resulted in the initiation of 42 lawsuits for various unfair, deceptive
and unconscionable business practices. In the past year, the section also obtained 58
judgments and assurances of voluntary compliance totaling more than $7.6 million in
consumer restitution, civil penalties, costs and other relief.
Here are summaries of the lawsuits and settlements that occurred in 2010:
DIRECTV Inc.
Franklin County Court of Common Pleas, Case No. 10 CVH 12 18309
A multistate investigation of DIRECTV Inc. resulted from the heavy volume of consumer
complaints regarding the business practices of this satellite television provider. Ohio was
joined by 48 other states and the District of Columbia in the investigation. Consumers
most often complained about misrepresentations related to pricing, equipment, available
channels, free trial offers and cancellation policies. The investigation culminated with a
lawsuit filed by the Attorney General on Dec. 16, 2010. An Agreed Entry and Final
Judgment Order was presented to the court at the time the lawsuit was filed and was
entered on Dec. 17, 2010. The settlement included a broad consumer restitution
provision, covering consumer complaints from Jan 1, 2007, through 150 days after the
date of the settlement. It also included strong injunctive language and $13.25 million in
costs to the states. Ohio’s received $605,000 for its share of the costs.
Goodin (Charles Scott), dba Scott Goodin Heating and Air Conditioning
Clinton County Court of Common Pleas, Case No. CVH 20100340
This unincorporated business sold heating and cooling systems. Charles Scott Goodin
was the sole proprietor, working out of his home with no other employees. Consumers
were solicited by Mr. Goodin at their homes, and Mr. Goodin requested full or substantial
payments from consumers prior to doing any work. Consumers complained that the
projects were never completed and initial payments were not refunded. On April 22,
2010, the Attorney General filed a lawsuit against Mr. Goodin, who also was indicted in
Clermont and Brown Counties for criminal activity related to his home improvement
sales. The Attorney General lawsuit alleged violations of the Consumer Sales Practices
Act, Home Solicitation Sales Act and Magnuson-Moss Warranty Act. On Aug. 10, 2010,
the case concluded with a Final Order and Entry Granting Plaintiff’s Motion for
Summary Judgment. The entry included a permanent injunction, $19,136 in consumer
restitution and a $100,000 civil penalty.
Iamurri (Cosmo), dba Complete Paving & Concrete and Cosmo’s Paving &
Concrete
Mahoning County Court of Common Pleas, Case No. 10CV2425
Cosmo Iamurri operated two business enterprises, Complete Paving & Concrete and
Cosmo’s Paving & Concrete. Consumer complaints against the businesses alleged failure
to deliver services and not refunding monies paid, or providing substandard work. Mr.
Iamurri had a history of unpaid judgments related to previous consumer transactions and
had filed multiple bankruptcy actions. The Attorney General filed a lawsuit against Mr.
Iamurri on June 23, 2010. It alleged violations of the Consumer Sales Practices Act,
including failure to deliver, providing shoddy work and continuing to engage in
consumer transactions while having unsatisfied judgments from previous consumer-
related lawsuits. The lawsuit seeks declaratory and injunctive relief, consumer damages
and civil penalties. The case is pending.
Musgrove (John) /Three Wise Men Home Services/JBM Construction & Property
Management
Green County Court of Common Pleas, Case No. 2010CV0046
John Musgrove engaged in the home improvement business under the unregistered names
of Three Wise Men Home Services and JBM Construction & Property Management. An
investigation was opened in response to consumer complaints alleging failure to deliver
various home improvement services. The Attorney General filed a lawsuit on Jan. 14,
2010, for violations of the Consumer Sales Practices Act and Home Solicitation Sales
Act. It seeks declaratory and injunctive relief, consumer damages and civil penalties.
Musgrove also was criminally charged with theft by deception in Montgomery County.
The civil case concluded with a July 6, 2010, Order and Entry Granting Plaintiff’s
Motion for Default Judgment and Awarding Relief, Restitution, Civil Penalties and
Costs. It included declaratory and injunctive relief, consumer restitution of $33,869.25, a
$100,000 civil penalty and $6,505 in investigatory costs. The injunction included
language prohibiting Mr. Musgrove from engaging in consumer transactions until he has
paid the judgment.
Stephens Investment and Financial Services, dba Lifeline Financial Legal Solutions
Franklin County Court of Common Pleas, Case No. 10 CVH 09 13552
This Florida company solicited Ohio consumers with claims that it could help them
obtain home loan modifications. It promised to help borrowers obtain better payment
arrangements and falsely stated that the company had attorneys on staff to represent the
consumers in foreclosure fights. The company charged consumers between $1,200 and
$3,000 for the program, but did not provide the promised services and did not provide
refunds of the fees paid. The Attorney General filed a lawsuit on Sept. 10, 2010, for
violations of the Consumer Sales Practices Act and Debt Adjuster Act. Counts included
failure to deliver, various misrepresentations, failure to register with the Ohio Secretary
of State and charging excessive fees. The lawsuit seeks a declaratory judgment,
injunctive relief, consumer damages and civil penalties. The case is pending.
U.S. Fidelis Inc., formerly known as National Auto Warranty Services Inc., dba
Dealer Services/Darain E. Atkinson/Cory C. Atkinson
Franklin County Court of Common Pleas, Case No. 10 CVH 04 6535
This case involved a multi-state investigation into the business practices of U.S. Fidelis
Inc., soliciting consumers under the name Dealer Services. The investigation culminated
with Ohio and other states filing lawsuits on April 29, 2010. The owners of the business,
Darain E. Atkinson and Cory C. Atkinson, were named as individual defendants.
Consumers complained that the company deceptively marketed and sold extended service
contracts for automobiles. The consumers alleged that they were misled into purchasing
products that they did not need, that the contracts did not cover promised repairs and that
they were unable to cancel their contracts. The lawsuit alleged violations of the
Consumer Sales Practices Act, including failure to disclose all material terms and
conditions in advertisements, failure to substantiate advertising claims, misrepresentation
and failure to deliver. There were additional counts for violations of Ohio’s Do Not Call
Act and the Telephone Solicitation Sales Act. The lawsuit sought declaratory and
injunctive relief, consumer damages and civil penalties. On Nov. 8, 2010, Ohio joined 10
other states in settlements with the Atkinson brothers. The consent judgments bar the
Atkinsons from selling motor vehicle service contracts in Ohio and require them to turn
over millions in assets to the bankruptcy court. In addition, the Atkinsons will owe Ohio
$1.8 million in civil penalties and $300,000 for costs related to the investigation and
litigation. With the surrender of all their assets to the bankruptcy court, any recovery will
come from the U.S. Fidelis bankruptcy estate.
West (Andrea L. and George W.), dba Estate Planning Paralegal Services
Franklin County Court of Common Pleas, Case No. 10 CVH 08 12416
This business purported to offer “Medicaid specialists” who were to assist consumers
with the Medicaid eligibility process. Senior citizens were charged $2,000 to $5,000 in
fees, but did not receive the promised services. Some consumers gave the suppliers
important financial documents that have not been returned. On Aug. 23, 2010, the
Attorney General filed a lawsuit against the principals of the business, Andrea and
George West, alleging violations of the Consumer Sales Practices Act and Home
Solicitation Sales Act. Counts in the Complaint include failure to deliver,
misrepresentation of sponsorship or affiliation, failure to register with the Ohio Secretary
of State and failure to provide a notice of cancellation form. The lawsuit seeks
declaratory and injunctive relief, consumer damages and civil penalties. A default
judgment against George West was granted on Nov. 30, 2010. It included a declaratory
judgment and permanent injunction, with consumer damages and civil penalties to be
determined at a later date.
OTHER JUDGMENTS
Brotherton (Michael), dba Financial Emergency Inc. and Debt Mediation and
Financial Counseling
Greene County Court of Common Pleas, Case No. 2009 CV 0719
Michael Brotherton operated a foreclosure rescue scam under the names Financial
Emergency Inc. and Debt Mediation and Financial Counseling. The Attorney General
filed a lawsuit in Greene County on June 25, 2009, for violations of the Consumer Sales
Practices Act, its substantive rules and the Debt Adjuster Act. Mr. Brotherton solicited
consumers through direct mail solicitations and via the Internet for foreclosure assistance
and debt mediation services. Neither business name was registered with the Ohio
Secretary of State. Specific allegations included charging in excess of permitted amounts,
failure to file an audit with the Attorney General, failure to deliver and making false and
misleading representations. The case concluded on Jan. 20, 2010, when the court entered
a default judgment. It included a permanent injunction, $5,769 in consumer restitution, a
$75,000 civil penalty and $1,125 in investigative costs.
Brown (Bob), dba Brown and Brown Roofing and Bob Brown Roofing
Montgomery County Court of Common Pleas, Case No. 2009 CV 3685
The Attorney General filed a lawsuit against this home improvement business on May 5,
2009. Bob Brown owned and operated the unincorporated businesses. He offered to
provide roof repair and other home improvement services. Consumers were solicited
through advertisements in media such as the Dayton Daily News and the Yellow Pages.
The complaint alleged violations of the Consumer Sales Practices Act, including shoddy
workmanship, estimate choice violations, failure to register the business and false
warranty clams. A Final Order and Entry Granting Default Judgment was entered on
April 28, 2010. It included injunctive and declaratory relief, $14,685 in consumer
restitution and a $125,000 civil penalty.
CertifiChecks Inc.
Montgomery County Court of Common Pleas, Case No. 2009 CV 1887
The Attorney General filed a lawsuit on March 9, 2009, in Montgomery County after this
company went out of business. It had been selling gift certificates to consumers in Ohio
and throughout the nation. All gift certificates purchased from CertifiChecks could no
longer be used. The business filed a Chapter 7 bankruptcy action. The litigation
concluded with an Agreed Consent Judgment Entry and Order entered on Aug. 30, 2010.
It included a declaratory judgment, permanent injunction and a $50,000 civil penalty
suspended due to the bankruptcy. All consumer restitution became part of the bankruptcy
action and could not be addressed in the consent judgment.
Aftermath Inc.
Aftermath provided crime scene and tragedy clean-up services. The Attorney General
received several consumer complaints alleging overbilling in excess of initial estimates.
An investigation revealed that Aftermath was not in compliance with the Consumer Sales
Practices Act and Home Sale Solicitations Act, particularly the sections relating to the
three-day right to cancel and estimates for services. The matter was resolved through an
Assurance of Voluntary Compliance entered on Sept. 30, 2010. The Assurance requires
Aftermath to comply with the relevant provisions of Ohio consumer laws in any future
consumer transaction in this state. It also includes a $15,000 payment to the Attorney
General as reimbursement for costs, with $5,000 suspended on the condition of full
compliance with the terms of the Assurance. Consumer complaints were resolved prior to
the Assurance.
Start Wireless Group, dba Page Plus Inc., Page Plus Cellular, Page Plus
Communications Inc., Page Plus Perfect Fit Wireless, Page Plus Total Wireless, Cell
Tech Wireless LLC, CellTech LLC, Perfect Fit Wireless #1 Toledo, T Page Plus and
T-Page Plus Communications Inc.
Start Wireless, which operated under multiple names, was a mobile virtual network
operator that purchased phone plans from Verizon and sold them to consumers via pre-
paid phone cards. The Attorney General initiated an investigation after receiving a
significant number of consumer complaints, mainly related to transfers from “unlimited
usage plans” to “pay-as-you-go” plans. Start Wireless cooperated with the Attorney
General throughout the investigation and was willing to make changes to its business
model. The investigation concluded when the parties agreed to an Assurance of
Voluntary Compliance finalized on Nov. 2, 2010. The Assurance included a $200
payment to each of the 144 consumer complainants identified in an addendum, plus a
clause in which the supplier agreed to provide $200 to additional eligible consumers who
complained to the Attorney General within 30 days of the Assurance date. A “best
practices” section in the Assurance should prevent the problems from recurring. Start
Wireless also agreed to make a $20,000 payment to the Consumer Protection
Enforcement Fund to reimburse the Attorney General for the costs of the investigation.
The Consumer Assistance Unit employs 15 complaint specialists and two Title Defect
Rescission Fund (TDR) personnel. The staff serves consumers who file complaints
against various businesses. In 2010, the Consumer Assistance Unit received more than
31,000 consumer complaints and inquiries.
In 2010, the Consumer Assistance Unit continued to expand its services to small
businesses and nonprofits. The purpose of this effort was to help small businesses and
nonprofits resolve their consumer-related disputes and to enhance the office’s ability to
monitor the marketplace for unfair or deceptive practices.
Complaint specialists are trained to identify problem businesses, and any consumer
complaint information may be referred to the section’s investigators. Specialists refer
businesses for investigation based upon consumer complaint volume, apparent trends,
patterns of abuse and other factors. The ability to identify problem businesses is critical
in the Consumer Protection Section’s attempt to protect consumers. Many investigative
referrals have led to successful litigation.
Every year, the Attorney General compiles a list of the top 10 complaint-generating
areas. In 2010, the top 10 areas were:
1. Motorized vehicles
2. Collections, credit reporting or financial services
3. Internet or phone
4. Household goods or property improvement
5. Mortgage
6. Shopping, food or beverages
7. Professional services
8. Sweepstakes or prizes
9. Computers or electronics
10. Utilities
D. EDUCATION
The goal of the Consumer Protection Education Unit is to educate Ohioans about their
consumer rights and to warn them about scams.
In 2010, the Consumer Protection Education Unit reached thousands of Ohioans through
a series of approximately 450 workshops, information tables and other outreach
activities. It also produced new publications and Web content to educate Ohioans about
consumer issues.
Events are marketed through the Attorney General’s website, fliers and networking by
staff and regional representatives. Available workshops include: Shop Smart: Know Your
Rights; Seniors Fighting Fraud; Plan Well, Live Well; Job Seekers Beware; Save the
Dream of Home Ownership; Scams Against the Military and Veterans; Senior Scams;
Know Your Rights: A Consumer Guide for Students; Take Charge of Your Credit; and
Know Your Rights: A Teacher’s Guide to Consumer Rights.
In 2010, Consumer Protection Education coordinated the annual Save Our Homes
Summit, attracting more than 250 consumer advocates and housing specialists. It also
joined with the office’s Public Affairs division to coordinate the first Ohio Consumer
Protection Summit.
E. CONSUMER LAWS
In addition to the Consumer Sales Practices Act, the Ohio Attorney General’s Consumer
Protection Section enforces many other Ohio laws and federal statutes created to protect
consumers from unfair business practices. Among the Ohio laws the Consumer
Protection Section is charged with enforcing are:
Predatory Lending Law: Brings non-bank mortgage lenders and mortgage brokers into
the jurisdiction of the Consumer Sales Practices Act, providing the Attorney General
authority to investigate and initiate legal proceedings against predatory lending practices.
Home Solicitation Sales Act: Protects consumers from unethical door-to-door sales
practices and allows consumers a three-day “cooling off” period during which the sale
can be canceled.
Telephone Solicitation Sales Act: Requires certain telephone solicitors to meet statutory
requirements, post a bond and register with the Ohio Attorney General’s Office prior to
being able to solicit Ohio consumers.
Prepaid Entertainment Contracts Act: Protects consumers who sign contracts with
health spas, dance studios, diet centers, dating services and martial arts training schools
by providing a three-day “cooling off” period and by specifying conditions under which a
contract can be canceled.
Title Defect Rescission Act: Creates the Title Defect Rescission Fund, administered by
the Consumer Protection Section, to provide refunds to retail purchasers of motor
vehicles who are unable to obtain a certificate of title within the statutory period of time.
Lemon Law: Requires automakers to repair any design or construction defect that affects
the use, value or safety of a new motor vehicle within the first 12 months or 18,000 miles.
Odometer Rollback and Disclosure Act: Makes it illegal to alter the mileage reading of
a motor vehicle and requires that accurate mileage disclosures be made when selling the
motor vehicle.
Debt Adjuster Act: Regulates businesses that offer debt pooling, adjusting or
management services by requiring business audits and insurance coverage and by
limiting contributions that can be accepted from the debtor.
Credit Freeze Act: Requires credit reporting agencies to allow consumers to place credit
freezes on their credit reports to prevent the extension of new credit and outlines how to
temporarily or permanently remove the freezes.
Small Loan Lender Act: Limits permissible payday loan interest rate charges to 28
percent, prohibits unfair debt collection practices and requires Internet lenders to have an
Ohio location.
Questions regarding the contents of this report may be directed to:
• Online at www.OhioAttorneyGeneral.gov
• By calling the Help Center at (800) 282-0515
• By sending information to Consumer Protection Section, 30 E. Broad St., Floor
14, Columbus, OH 43215