May 9, 2017 | Consumer Protection, Employment & Technology Archive
CFPB Alleges Companies Deceived Consumers About Debt That Was Not Legally Owed
On April 27, 2017, the Consumer Financial Protection Bureau (“CFPB”) took action against four online lenders – Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. – for deceiving consumers by collecting debt they were not legally owed. In a suit filed in federal court, the CFPB alleges that the four lenders could not legally collect on these debts because the loans were void under state laws governing interest rate caps or the licensing of lenders. The CFPB alleges that the lenders made deceptive demands and illegally took money from consumer bank accounts for debts that consumers did not legally owe, and it seeks to stop the unlawful practices, recoup relief for harmed consumers, and impose a penalty.
“We are suing four online lenders for collecting on debts that consumers did not legally owe,” said CFPB Director Richard Cordray. “We allege that these companies made deceptive demands and illegally took money from people’s bank accounts. We are seeking to stop these violations and get relief for consumers.”
According to the CFPB, Golden Valley Lending, Inc., Silver Cloud Financial, Inc., Mountain Summit Financial, Inc., and Majestic Lake Financial, Inc. are online installment loan companies in Upper Lake, California. According to the CFPB, since at least 2012, Golden Valley Lending and Silver Cloud Financial have offered online loans of between $300 and $1,200 with annual interest rates ranging from 440 percent up to 950 percent, and Mountain Summit Financial and Majestic Lake Financial began offering similar loans more recently.
Investigation Showed High-Cost Loans Violated Licensing Requirements or Interest-Rate Caps Making Loans Void
According to the CFPB, its investigation showed that the high-cost loans violated licensing requirements or interest-rate caps – or both – that made the loans void in whole or in part in at least 17 states: Arizona, Arkansas, Colorado, Connecticut, Illinois, Indiana, Kentucky, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, and South Dakota. The CFPB alleges that the four lenders are collecting money that consumers do not legally owe. The CFPB’s suit alleges that Golden Valley Lending, Silver Cloud Financial, Mountain Summit Financial, and Majestic Lake Financial violated the Truth in Lending Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The specific allegations include:
Deceiving consumers about loan payments that were not owed: The lenders pursued consumers for payments even though the loans in question were void in whole or in part under state law and payments could not be collected. The interest rates the lenders charged were high enough to violate usury laws in some states where they did business, and violation of these usury laws renders particular loans void. In addition, the lenders did not obtain licenses to lend or collect in certain states, and the failure to obtain those licenses renders particular loans void. The four lenders created the false impression that they had a legal right to collect payments and that consumers had a legal obligation to pay off the loans.
Collecting loan payments which consumers did not owe: The four lenders made electronic withdrawals from consumers’ bank accounts or called or sent letters to consumers demanding payment for debts that consumers were under no legal obligation to pay.
Failing to disclose the real cost of credit: The lenders’ websites did not disclose the annual percentage rates that apply to the loans. When contacted by prospective borrowers, the lenders’ representatives also did not tell consumers the annual percentage rate that would apply to the loans.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws like the Truth in Lending Act. The CFPB is seeking monetary relief for consumers, civil money penalties, and injunctive relief, including a prohibition on collecting on void loans, against Golden Valley and the other lenders. The Bureau’s complaint is not a finding or ruling that the defendant have actually violated the law.
The CFPB’s Complaint Filed In United States District Court Can Be Viewed At:
http://files.consumerfinance.gov/f/documents/201704_cfpb_Golden-Valley_Silver-Cloud_Majestic-Lake_complaint.pdf
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Mar 23, 2017 | Consumer Protection, Employment & Technology Archive
Kehoe Law Firm, P.C. is investigating whether a reported data breach at America’s Job Link Alliance (“AJLA”) resulted in the theft of the private information of America’s JobLink website users in Alabama, Arizona, Arkansas, Delaware, Idaho, Illinois, Kansas, Maine, Oklahoma, and Vermont.
America’s JobLink website coordinates federal unemployment and workforce development programs and links job seekers with employers. Individual job seekers that use the AJLA website are required to provide their personal information, including name, date of birth, and Social Security Account Number, as part of the job search process. The data breach may have led to the theft of this sensitive, personal information.
On March 22, 2017, America’s JobLink (“AJL”) issued a press release advising that the multi-state web-based system may have been the victim of a hacking incident from an outside source. The press release stated: “On March 21st, AJLA-[Technical Support] confirmed that a malicious third party “hacker” exploited a vulnerability in the AJL application code to view the names, Social Security Numbers, and dates of birth of job seekers in the AJL systems of up to ten states: Alabama, Arizona, Arkansas, Delaware, Idaho, Illinois, Kansas, Maine, Oklahoma, and Vermont.”
The press release further stated: “On February 20, 2017, a hacker created a job seeker account in an America’s JobLink (AJL) system. The hacker then exploited a misconfiguration in the application code to gain unauthorized access to certain information of other job seekers.” The press release revealed: “The code misconfiguration was introduced in an AJL system update in October 2016.” Additionally, the press release disclosed that “America’s Job Link Alliance-Technical Support . . . first noticed unusual activity in AJL via system error messages on March 12.”
Personal compromised information may be easily sold on the “dark web” and often used illegally to steal one’s identity, open financial accounts, or transfer funds from financial accounts. Although AJLA says there is no indication that hacked information has been misused, users may have been negatively impacted by the data breach.
If you established an America’s JobLink account, entered personal information on AJLA’s website, or have received a notice that your personal information may have been compromised, or if you believe your personal information has been stolen, please contact John Kehoe, Esq., [email protected], (215) 792-6676, Ext. 801, for a free, no-obligation evaluation of your potential legal rights.
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Mar 17, 2017 | Consumer Protection, Employment & Technology Archive
The Kehoe Law Firm, P.C. is investigating potential claims on behalf of purchasers of FTD Companies, Inc. (NASDAQ: FTD) stock or securities who allege that the company’s share price was inflated as a result of accounting errors. In particular, the firm’s investigation concerns reported errors relating to cross-border indirect taxes and whether FTD and certain of its executive officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
On March 14, 2017, FTD reported a net loss of $86.4 million in its fourth quarter ended December 31, 2016, and announced that as a result of an incorrect assessment of certain cross-border indirect taxes, the company would need to restate its previously issued consolidated financial statements for the years ended December 31, 2015 and 2014 and for the quarters within the years ended December 31, 2016 and 2015.
FTD further reported that “the aggregate impact of correcting these prior period errors all within the year ended December 31, 2016 would have been material to the company’s current year consolidated financial statements.” Further, the cumulative effect of the changes to retained earnings as of January 1, 2014, the earliest date presented in the consolidated financial statements for the year ended December 31, 2016, was a reduction of $12.4 million. On this news, the company’s share price fell $5.54, or 23.69%, to close at $17.85 on March 15, 2017.
If you purchased or otherwise acquired FTD shares or would like to speak privately with a securities attorney to contribute to or learn more about the investigation, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.ft
Mar 10, 2017 | Consumer Protection, Employment & Technology Archive
The Kehoe Law Firm, P.C. announces the filing of a class action lawsuit on behalf of those who purchased or otherwise acquired NantHealth, Inc. (“NantHealth or “Company”) securities pursuant or traceable to the Company’s initial public offering on or about June 2, 2016 (the “IPO”) or on the open market between June 2, 2016 and March 3, 2017, both dates inclusive (the “Class Period”).
According to the Company, NantHealth (NASDAQ:NH) is a transformational healthcare cloud-based IT company that purports to provide cloud-based platform solutions that converge science and technology through integrated clinical platform to provide actionable health information at the point of care for critical illnesses.
In September 2014, NantHealth’s founder and CEO, Patrick Soon-Shiong, announced a $12 million donation to the University of Utah in connection with an initiative to find genetic clues for the cause of diseases, including several cancers and amyotrophic lateral sclerosis.
On March 6, 2017, STAT, a news organization focused on medical industry reporting, published an article alleging that pursuant to the terms of Soon-Shiong’s donation to the University of Utah, the university was effectively required to spend $10 million on genetics analysis performed by NantHealth, an arrangement which enabled NantHealth to inflate by more than 50 percent the number of test orders it reported to investors in 2016. Also, the article quoted two tax experts stating that the deal “appeared to violate federal tax rules governing certain charitable donations” and “amount[ed] to indirect self-dealing by Soon-Shiong and his foundations.” A link to the article is available here.
Following this news, NantHealth’s share price fell $1.67, or 23.29%, to close at $5.50 on March 6, 2017.
The complaint alleges that throughout the Class Period, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) Soon-Shiong funneled business to NantHealth through his donation to the University of Utah, pursuant to the contractual terms of which the university was effectively required to spend $10 million on genetics analysis performed by the Company; (ii) consequently, the number of test orders that NantHealth reported to investors was artificially inflated; (iii) the contracts governing Soon-Shiong’s donation to the university violated federal tax law; and (iv) as a result, NantHealth’s public statements were materially false and misleading at all relevant times.
If you are a member of the class described above, you may no later than May 8, 2017 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. The ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
If you purchased NantHealth shares in or after the IPO, or are aware of any facts relating to this investigation, or you would like to learn more information about this investigation, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Feb 23, 2017 | Consumer Protection, Employment & Technology Archive
A class-action complaint was recently filed in the United States District Court for the District of New Jersey against Logitech, Inc. (“Logitech”). The complaint alleges that Logitech violated certain consumer protection and warranty laws through the sale of defective, unreliable home security systems.
Logitech’s Alleged Defective Home Security Systems
These security systems are sold under the “Alert” brand (the “Alert Systems”) as high-definition digital complete home video security systems and were marketed as an “easy, comprehensive solution to home security.” Logitech also promised “. . . subscribers access to Logitech’s ‘secure, data center-housed servers’ that would be: Always On. Always Working,” along with an “. . . express one-year warranty in writing that promised customers that their ‘Logitech hardware product shall be free from defects in material and workmanship’.”
Logitech’s Alleged Violations of Consumer Protection and Warranty Laws
According to the complaint, Logitech’s online customer forum was inundated “. . . with complaints about the functionality and efficacy of the Alert Systems that rendered the Alert Systems inoperable and unable to provide reliable security services.” Customers reported a variety of problems including difficulty with installation and setup of the Alert Systems; systems not turning on and staying powered; systems not recording or downloading video properly; and problems with connectivity, overheating, and delayed/failed alerts.
Further, the complaint alleges that rather than repair or refund the defective systems:
Logitech responded by designing and implementing a strategy to avoid its express warranty obligations by, among other things: (1) requiring customers to go through repetitive, time-consuming, cumbersome, and unsuccessful troubleshooting processes; (2) failing to replace customers’ defective systems with non-defective parts, software, or systems in a timely manner while warranty periods lapsed; (3) repeatedly telling customers Alert Systems were on back-order so that they could not be replaced during the warranty period; (4) creating administrative hassles for customers to prove purchases and submit exchange Alert Systems for repair and/or replacement; (5) replacing defective Alert Systems with defective Alert Systems; (6) misleading customers that its Alert Systems’ problems would be fixed with upcoming hardware and software fixes that never materialized or did not actually work; (7) failing to implement successful software upgrades that would resolve or improve the user experience and make the Alert Systems functional for their intended purposes; and (8) failing to provide refunds. As a result, Logitech strategically left customers without operable security systems during the warranty period while it ran out the clock.
Do Logitech’s Alleged Violations Matter?
According to the complaint, “Logitech’s Alert Systems actually placed consumers at an increased safety risk because the Alert Systems were faulty, defective, and could not protect buyers from the home security risks the products were intended to alert buyers of and prevent, such as break-ins and robberies.”
Further, the complaint alleges that Logitech breached “. . . its implied warranties with consumers by deceptively marketing and selling Alert Systems that were never merchantable for providing reliable, continuous digital home security” and “as a result of Logitech’s unlawful business practices, consumers unknowningly invested hundreds, if not thousands, of dollars in Alert Systems that are now obsolete and that have already or will inevitably fail.”
Who May Have Been Affected?
According to the complaint, Logitech began sale and distribution of the high-definition digital complete home video security systems in 2010. Logitech’s Alert Systems were sold under the “Alert” brand name and were packaged “. . . as a complete home video security system that would allow customers to ‘Be There When You’re Not.'”
What Can Those Who May Have Been Affected Do?
The Kehoe Law Firm is ready to help. If you have concerns about your purchase of a Logitech home security Alert System, you can speak to an attorney for a free, no-obligation consultation by calling Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected] or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Feb 17, 2017 | Consumer Protection, Employment & Technology Archive
A class action complaint was filed in U.S. District Court in San Francisco against Oracle America, Inc. (“Oracle”) by a former Oracle sales representative, alleging that Oracle retroactively changed its commission contacts in order to avoid paying its sales employees millions in earned commissions.
Oracle’s Retroactive Compensation Plans
The class action complaint alleges that Oracle would alter its sales employees’ existing compensation plans with revised plans known as “re-plans.” Re-plans are retroactive and apply to sales transactions that have already been completed by sales employees. According to the complaint, “Re-plans affect past sales going back to a date of Oracle’s choosing, sometimes to the beginning of the same fiscal year and sometimes to a date in a previous fiscal year.”
The complaint further alleges:
. . . Oracle has . . . systematically stiffed its salesforce of earned commission wages for many years, by scrapping contractual compensation plans when they yield commission earnings that are higher than Oracle would prefer to pay and retroactively imposing inferior- i.e.[,] less remunerative – numeric terms. Simply put, Oracle routinely decides to change commission formulas so as to reduce commission payments on past sales, well after the commissions have been earned and even sometimes after they have been paid.
. . .Oracle coerces employees into accepting re-plans by threatening that if they fail to accept the new commission plans within 24 hours, they will not be paid pending commissions at all. Even if a a bold employee refuses to agree to an inferior replan, Oracle barrels ahead anyway, applying the re-plan terms to both past and future sales.
Why Do Oracle’s Retroactive Changes Matter?
According to the complaint:
Oracle’s commission policies and practices violate the contractual compensation plans accepted by sales employees. They violate the California Labor Code’s prohibitions on deducting wages to defray ordinary business costs and secretly paying a lower wage while purporting to pay the wage designated by contract. They contradict the Labor Code requirement that commission contracts be transparent about the methods for computing and paying commissions. They are fundamentally unfair business practices.
Further, the lawsuit alleges that Oracle’s “re-plans” allow Oracle to “claw back” previously paid commissions, in addition to forcing employees who cannot afford to “fork over substantial sums,” to either “. . . pay off the supposed debt by continuing to work for Oracle without being paid commission or be threatened with a collections lawsuit if they leave before completely paying off their negative commission balance.”
Moreover, the lawsuit contends that “. . . Oracle reduces commissions through systematic processes designed to align commissions with financial forecasts and bottom line goals. Over the years, Oracle has taken millions of dollars from commission wages to add to its bottom line.”
Who May Have Been Affected?
The complaint filed in California applies to commissioned sales employees employed by Oracle in California for the last four years who received “. . . revised commission agreements which retroactively applied inferior – i.e. less remunerative – numeric terms (including but not limited to higher quotas and lower commission rates) to completed sales.”
What Can Those Who May Have Been Affected Do?
The Kehoe Law Firm P.C. is ready to help. If you served as an Oracle commissioned sales employee to whom Oracle issued revised commission agreements which retroactively applied less lucrative terms, you can speak to an attorney for a free, no-obligation consultation by calling Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected] or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
