Payments News Update – September 15, 2023

Payments News Update – September 15, 2023

Legal and Regulatory Developments SPOTLIGHT: The CFPB Eyes Tech Firms’ Role in Governing Tap-To-Pay Digital Transactions News – September 8, 2023 The Consumer Financial Protection Bureau late Thursday released a report raising questions about the part restrictions imposed by big technology firms like Apple Inc. and Alphabet Inc’s Google subsidiary may play in hampering innovation, consumer choice, and the growth of open and decentralized banking and payments in the U.S....

September 14, 2023

Following a multi-year investigation by the State of California, Google has agreed to pay $93 million to resolve allegations of deceiving its users about its collection, storage, and use of their location data.  Google was found to have misled users into believing their location data would not be collected, stored, or used for location-based advertising if they turned off “Location History” in their settings.  CA AG

GAO Highlights Massive Fraud of Government Funds for Unemployment Insurance During COVID Pandemic

On September 12, 2023, the United States Government Accountability Office (GAO) published a report estimating between $100 billion and $135 billion in unemployment insurance fraud during the COVID-19 pandemic (from April 2020 to May 2023).  This represents roughly 11-15% of the total unemployment insurance benefits paid during the pandemic, or as the Washington Post put it, the GAO “found the theft encompassed roughly one out of every seven dollars set...

September 13, 2023

Texas-based Oliver Street Dermatology Management LLC, which manages dermatology practices, surgical centers, and pathology labs across the country, has agreed to pay $8.9 million to resolve self-reported violations of the Anti-Kickback Statute, Stark Law, and False Claims Act.  The company revealed in 2021 that some of its former senior managers had fraudulently increased the purchase price of 11 dermatology practices acquired between 2013 and 2018 in exchange for referrals.  Claims...

September 12, 2023

Canadian resident George Stubos will pay disgorgement of $5,367,926 and prejudgment interest of $806,108 for his microcap stock investment scheme. Stubos gained control of several thinly traded microcap companies and then lied to investors, brokers, and transfer agents, and convinced them his stock shares were eligible to be publicly traded. In addition to not registering his sales with the SEC and failing to disclose his control over the entities, Stubos...

September 12, 2023

J&J Korea Inc. has been ordered to pay nearly $9 million in criminal penalty and restitution after pleading guilty to rigging bids and committing fraud against the U.S. government.  J&J was found to have conspired with others in order to win most of the subcontracts being offered by the U.S. Department of Defense for the maintenance of military hospitals in South Korea.  DOJ

September 11, 2023

Tempoe, LLC has agreed to pay $35 million to 41 states, the District of Columbia, and the CFPB, after an investigation found the Ohio-based consumer finance company misled customers who sought financing at major retailers into believing they were signing up for an installment plan, when in fact they were being locked into expensive leasing agreements with unreasonable return policies.  Tempoe ultimately caused many customers to pay double or triple...

September 11, 2023

Background report providers Truthfinder and Instant Checkmate have been ordered to pay $5.8 million to settle charges of violating the Fair Credit Reporting Act by failing to ensure the maximum possible accuracy of their reports.  The companies were found to falsely describe certain records as criminal when in fact they were traffic tickets.  When consumers flagged information as inaccurate, the companies never investigated the information flagged, modified the reports, nor...

September 10, 2023

Whistleblower partner Eric Havian was quoted in a POLITICO article, What Ginni Thomas and Leonard Leo wrought: How a justice’s wife and a key activist started a movement.

September 8, 2023

Grocery store chain Kroger, which owns and operates a number of subsidiaries, has agreed to pay $1.37 billion to a number of states, including California, Illinois, North Carolina, Oregon, Tennessee, and Virginia.  The settlement in principle would absolve Kroger for its role in the opioid crisis.  CA AG; NC AG; OR AG