The Office of the Attorney General’s Consumer Protection Victories

In 2015, early on in AG Racine’s tenure, the Office of Attorney General (OAG) launched a dedicated Office of Consumer Protection (OCP) to stand up for DC consumers and protect them from deceptive and unethical business practices. Since then, the office has become a leader in educating residents about their rights, investigating complaints reported by residents regarding potential violations of the consumer protection laws, and filing lawsuits against businesses and individuals that take advantage of residents. OCP has secured more than $125 million in penalties, restitution for DC consumers, and other payments through lawsuits and legal action since 2015.  

The office also assists consumers by mediating disputes between consumers and businesses when they file a complaint to OAG. In the last seven years, the office has received more than 13,000 complaints and has helped recover more than $2 million through the mediation process for residents who submitted complaints. In 2021, OCP received more than 2,500 consumer complaints—more than any previous year. When OAG receives more complaints from residents, the office can help more people, identify more bad actors, and make the market work better for DC residents.

OCP has also worked proactively to propose reforms to District law to better protect residents from unethical business practices and fraud. The office successfully advocated for a bill that obligates companies to tell consumers when their data has been breached, and in 2020 the law went into effect. OAG also worked with DC Council Chairman Phil Mendelson to draft a bill expanding debt collection protections for residents to cover modern forms of debt such as medical and credit card debt, and modern debt collection methods such as voicemail, texting, and email. That reform passed DC Council in June 2022.

Listed below are legal wins and several ongoing efforts in OAG’s fight to protect DC consumers:

Protecting Especially Vulnerable Consumers

  • Purdue Pharma: In 2019, OAG, along with attorneys general for most other states, filed lawsuits against Purdue Pharma and the Sackler family for their role in creating and exacerbating the opioid epidemic. That same year, Purdue Pharma filed for bankruptcy. In September 2021, the bankruptcy court approved an inadequate Purdue bankruptcy plan. Then, DC joined a small group of states that forced Sacklers to pay $1.7 billion more and agree to other non-monetary relief. More than $31 million of that total will go to DC.
  • Aetna, CareFirst BlueChoice, and UnitedHealthcare: In 2018, OAG announced an agreement with the three insurance companies to ensure that consumers have access to accurate information about mental health providers. The settlement required the companies to correct the provider directories, regularly audit that information, and pay the District $50,000 for investigation costs.
  • Washington Hebrew Congregation: In 2020, OAG filed a lawsuit against Washington Hebrew Congregation for routinely ignoring District laws designed to protect children and creating an environment ripe for abuse. In 2018, WHC’s childcare center disclosed allegations that children had been sexually abused by an assistant teacher, and 15 children have reported abuse. In September 2022, the Court granted partial summary judgment in favor of the District on several important claims, while determining that other claims will proceed to trial.
  • District Nursing Homes: After Washington Center for Aging Services and Stoddard Baptist Nursing Home sent deceptive collection letters to family members of nursing home residents, OAG stepped in to secure an agreement to stop the misleading billing, provide restitution to families, and pay $20,000 to the District for costs and civil penalties.
  • Juul: In 2019, OAG sued JUUL for marketing its products to teenager and misleading consumers about its highly addictive product, creating a public health crisis. As a result of JUUL’s conduct, roughly one-third of all e-cigarette users nationwide are middle and high school-aged kids—including thousands in the District. The case is ongoing.
  • Bilingual Teacher Exchange: In 2019, OAG sued Bilingual Teacher Exchange for preying upon dozens of foreign teachers working in DC schools, falsely representing themselves as federally designated visa “sponsor” companies and as representatives of DC Public Schools. OAG secured a preliminary injunction stopping company from continuing to prey on these teachers, and the lawsuit is ongoing.

Fintech and Predatory Lending

  • Elevate: In 2020, OAG filed a lawsuit against Elevate, an online lender, for deceptively marketing high-cost loans carrying interest rates up to 42 times the District’s cap. In 2022, Elevate agreed to pay at least $3.3 million to refund over 2,500 District consumers who were misled, waive over $300,000 in interest owed by those consumers, and pay $450,000 to the District.
  • OppFi: OAG sued Opportunity Financial in 2021 for deceptively marketing high interest loans to DC consumers that were more than eight times higher than the rate cap. In 2021, the company agreed to pay $1.5 million to refund over 4,000 District consumers who were charged exploitive interest rates by the company, waive over $640,000 in interest owed by those consumers, and pay $250,000 to the District in penalties.
  • Moody’s: After an investigation into Moody’s conduct in the lead up to the 2008 financial crisis, AG Racine and 21 other state attorneys general, and the United States Department of Justice, reached an $863.8 million settlement with Moody’s, with $6.45 million from the settlement going to the District.
  • CashCall: In 2015, OAG sued the debt collection company, alleging that it violated the law by charging consumers illegal interest rates that ranged from 80 percent to 169 percent, well over the maximum interest rate of 24 percent allowed under District law. In 2017, the company agreed to return payments of more than $1.8 million made by District consumers and forgive more than $1 million in remaining debts to settle the lawsuit.
  • Student Aid Center: In 2016, OAG sued the company for unlawfully marketing student debt relief services to District consumers, including services that consumers could get for free from the U.S. Department of Education. In 2017, OAG secured a judgment for more than $425,000 in restitution and civil penalties from the company.

Gig Economy

  • Getaround: OAG investigated Getaround, a car sharing company, for misrepresenting the safety and security of the platform, misleading consumers by using phony owner profiles for fleet cars actually owned by Getaround and failing to collect and pay sales taxes for rentals in the District. OAG issued a consumer alert in February 2020 to raise awareness about concerns with auto thefts in the District that appeared to be connected to the use of this app. In July 2021, OAG announced Getaround will pay nearly $1 million in unpaid taxes and restitution.
  • Instacart: In 2020, OAG filed a lawsuit against Instacart, a grocery delivery service, for charging District consumers millions of dollars in deceptive service fees and for failing to pay hundreds of thousands of dollars in District sales tax. Instacart tricked District consumers into believing they were tipping grocery delivery workers when, the company was actually charging them extra fees and pocketing the money. In August 2022, Instacart settled the lawsuit and agreed to pay $2.54 million for it’s misrepresentations and other unlawful conduct.
  • DoorDash: OAG sued DoorDash, a food delivery company, in November 2019 for pocketing consumer tips that were intended for delivery workers. In November 2020, DoorDash settled the lawsuit and agreed to pay $2.25 million in restitution to workers and in penalties to the District. 
  • Grubhub: In 2022, OAG sued Grubhub, a food delivery company, for charging hidden fees and using deceptive marketing tactics during the heart of the COVID-19 pandemic to increase profits at the expense of consumers and struggling local restaurants. The lawsuit is ongoing.
  • Handy Technologies: In 2016, OAG sued Handy Technologies, a gig economy company that provided home cleaning services for advertising that workers were subjected to background checks when they were not, and deceptively enrolled consumers into cleaning plans that billed them on a recurring basis. In 2017, OAG announced Handy would pay restitution to consumers harmed by the company.

Data Privacy and Big Tech

  • Google: In 2022, OAG filed a lawsuit against Google for deceiving and manipulating consumers to gain access to their location data, including making it nearly impossible for users to stop their location from being tracked. Three other attorneys general also filed lawsuits in their own state courts in a bipartisan, coordinated effort to hold Google accountable for misleading and violating the privacy of its users. 
  • Facebook: In 2018, OAG sued Facebook for failing to protect the data of its users—tens of millions of users nationally and nearly half of all District residents—when Cambridge Analytica acquired and used that data to manipulate the 2016 election. In 2022, OAG sued Mark Zuckerberg for directly participating in decision-making that allowed the Cambridge Analytica data breach and misleading consumers about their data privacy.
  • Equifax: Along with 50 other attorneys general, OAG investigated Equifax’s massive 2017 data breach that impacted more than 350,000 Dc consumers. To settle the investigation, in 2019 Equifax agreed to pay $600 million in restitution and penalties, including $4 million to DC. It also agreed to improve its security practices and assist consumers impacted by identity theft as a result of the breach.

Fair and Affordable Housing

  • Equity Residential Management: OAG sued the management company in 2017 alleging that, for years, Equity misled and deceived tenants by leasing apartments using an advertised monthly rent that included a discount that was never disclosed, and illegally hiked rents for Van Ness tenants. This was the Office of Consumer Protection’s first case to go to trial, and resulted in $2 million in costs and restitution for the tenants.
  • Jefferson and Insun Hofgard: In 2015, OAG sued Jefferson and Insun Hofgard for engaging in a shoddy and illegal house-flipping scheme. In 2016, the Hofgards settled the lawsuit and were required to pay full restitution to affected consumers, amounting to at least $1.3 million. 
  • Congress Heights Apartments: In 2016, OAG filed suit against Sanford Capital, the owners of the Congress Heights Apartments, over extreme disrepair and dangerous housing code violations. OAG forced Sanford Capitol to pay restitution to tenants, and leave the DC market. Unfortunately, Sanford tried to transfer the building to new owners who were using the same tricks to push residents out. OAG sued again in 2020, and in January 2022, the building’s new nonprofit owner agreed to transform the current 47-unit apartment complex into approximately 180 units of affordable housing as well as significant retail at the site.
  • 2724 11th Street NW: OAG sued the Columbia Heights landlord of 2724 11th Street NW in 2017. In September 2021, a judge required them to pay nearly $680,000 in restitution and penalties for forcing tenants to live in deplorable conditions that jeopardized their health, safety, and security. The landlord was also required to hire a new management company and put in place policies and trainings to prevent such negligence from happening again.
  • Ginosi USA Corporation: In 2017, OAG sued a company Ginosi USA for illegally operating apartments like hotel rooms, including some apartments that were rent-controlled, that could not legally be turned into short term rentals under District law. OAG reached a settlement with the company that returned about $210,000 to long-term residents. In 2019, OAG announced Ginosi USA was also banned from selling illegal short-term rentals in residential apartment buildings in the District.

Other Significant Cases

  • Marriott: In 2019, OAG filed a lawsuit against Marriott deceiving consumers about the true prices of hotel rooms and charging hidden resort fees to increase profits. In November 2021, recently unsealed legal documents revealed for the first time how much money Marriott and its hotels make from charging deceptive resort fees: Marriott’s self-managed resorts alone made $66 million in 2012, $82 million in 2013, and $58 million through half of 2014 from resort fees. This lawsuit is ongoing and survived Marriott’s motion to dismiss the case.
  • Polymer80: In 2020, OAG became the first attorney general to sue Polymer80 for illegally advertising and selling ghost guns to DC consumers. Polymer80 is a leading manufacturer of ghost guns in the United States and the company that manufactured most of the deadly ghost guns recovered in DC. More than 80% of the ghost guns recovered by DC police since 2017 were made by Polymer80, including guns linked to nine homicides. In a major August 2022 victory, we won a $4 million judgement against Polymer80 and permanently forced Polymer80 to stop selling to District consumers and stop misrepresenting the legality of its gun sales.

Resources

District consumers can contact the Office of Consumer Protection by: