State AGs Tackle COVID-19 Related Issues: Some Companies Likely to Face Investigation

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With the escalation of the COVID-19 pandemic and the steps taken by the federal and state governments to stem its community spread, state attorneys general (AGs) are confronting new issues that have emerged as a result of the public health emergency.

Deceptive Advertising: AGs are using state Unfair and Deceptive Acts and Practices (UDAP) statutes to investigate advertising by companies, or hosted on company websites, that may be false, deceptive or misleading to consumers about products (i.e. masks, hand sanitizer, etc.), treatments or risks associated with COVID-19. One AG recently filed a lawsuit against a televangelist for misrepresenting a product sold through his show as a cure for the novel coronavirus. Another opened an investigation of allegations a cruise line instructed staff to use scripts which may have misled customers as to COVID-19 risks. Investigations may be confined to a single state AG office or they could become part of a much wider multi-state AG investigation.

Outreach to the Lending Industry: AGs are beginning to advocate for financial relief for their consumers who are unable to pay bills due to the COVID-19 crisis. The Arizona Attorney General recently sent letters to more than 1,000 financial institutions that do business in his state, urging them to halt foreclosures, evictions, and repossessions for at least 90 days for customers who can demonstrate economic hardship due to this unforeseen crisis. The Colorado AG recently urged student loan servicers, creditors, and debt collectors to refrain from mandatory debt collection efforts from those who are unable to pay because of their financial circumstances. The AG indicated that his office would explore relevant legal avenues to protect borrowers going forward.

Price Gouging: AGs across the country have stepped up public awareness campaigns and civil enforcement efforts to crack down on reported instances of price gouging by unscrupulous sellers of items that consumers and health care workers need to protect themselves from the spread of COVID-19. Many AGs have established special hotlines to receive complaints of suspected price gouging and the AGs are issuing cease and desist letters to those sellers suspected of taking advantage of the public health crisis. 

The Dentons State Attorney General practice is a full-service, nationwide practice to advise and assist clients when dealing with state AGs and their staff. The practice features bipartisan leadership from four former state AGs along with former deputy AGs, assistant AGs, chiefs of staff from some of the most active offices in the nation and top notch litigators experienced in defending lawsuits brought by state AGs. Receipt of an AG letter of inquiry or civil investigative demand (a subpoena AGs may issue without going to court) does not mean a lawsuit is coming, but it does mean an investigation has been opened and should not be taken lightly. If you receive an AG inquiry or investigative demand, or think the nature of your business might make it at risk of AG scrutiny, or have an interest in more information on any of the COVID-19 matters above and would like to discuss with the Dentons State AG team, contact Bill McCollumThurbert Baker or Dan Gibb.