Florida Consumer Fraud Update
From new litigation against large companies, to actions taken by the Consumer Financial Protection Bureau, Florida citizens should be aware of the latest updates in consumer fraud litigation (as discussed below):
Telecommunications company CenturyLink faces a growing legal battle as consumer fraud litigation has now been filed against them in Arizona, California, Colorado, Idaho, Minnesota, Nevada, Oregon, and Washington. The company is being accused of charging consumers higher monthly fees than sales agents quoted—two or three times the original fees quoted. In addition, some consumers are reporting that they were also charged for services they never requested.
Damages in the case could range between $600 million and $12 billion because the company has close to six million subscribers.
GNC in Trouble Again
On July 19th, a Florida federal judge ruled against General Nutrition Center (GNC)’s motion to dismiss a putative class action lawsuit brought by consumers alleging that the company used misleading labels on its glutamine supplements, claiming that the products had specific effects when scientific studies suggest otherwise. The products at issue include:
- Pro Performance L-Glutamine Powder 5000;
- Pro Performance L Glutamine 1500;
- Pro Performance RapidDrive Glutamine 2500 Power Chew; and
- Pro Performance RapidDrive Glutamine 5000.
GNC tried to get the lawsuit dismissed by claiming that the studies plaintiffs relied on didn’t apply in the case because they didn’t specifically test GNC’s glutamine supplements and their specific dosages, methods of ingestion, etc.
The company also claimed that since the main plaintiff only purchased one of the many glutamine supplements, a class action lawsuit against all of the company’s glutamine supplements could not be brought. The judge rejected this claim, finding that the products were all essentially the same because they all contained the same active ingredient.
GNC has faced similar consumer fraud lawsuits over other products, such as its Aloe Vera gel and accusations surrounding under filled protein powder tubs.
Consumer Protection Bureau Bans Arbitration Clauses
On July 10, the Consumer Financial Protection Bureau issued a controversial rule to prevent companies from using arbitration clauses to bar litigation over consumer complaints. The rule specifically targets credit card companies and banks that use clauses like these in their contracts to prevent being sued over fraud or some other form of wrongdoing. As a result of the clauses, consumers have historically had to go through arbitration instead of filing class-action lawsuits, which can make it more difficult to obtain justice and prevent other consumers from also falling victim to the same issue.
While the new rule doesn’t completely ban arbitration clauses, it does mandate that they be written such that consumers wouldn’t be prevented from being able to bring and/or join class-action lawsuits. It also forces these companies to hand over information related to initial claims and counterclaims.
The rule takes effect in September and will apply to contracts that begin in January 2018, although many large user groups representing banks and certain members in Congress have their sights on destroying it before it can go into effect.
Boca Raton Commercial Litigators Protecting Consumers
If you’ve been the victim of a banking or fraud issue–or any other consumer fraud issue–contact Lavalle, Brown & Ronan in Boca Raton today. We’ve handled countless consumer fraud cases on behalf of our clients. We’re here to help.