The Consumer Protection Unit of the Delaware Department of Justice warns Delawareans during this peak vacation season to be careful when they are looking for a vacation rental. The scammers operating rental scam schemes find legitimate rental postings and capture the information and photos of the property, and then list it on Craigslist or other online advertising platforms. Unsuspecting consumers looking for a good deal on a vacation rental find the bogus posting, send a deposit, and receive confirmation of their rental only to arrive and find other people in the home, are unable to gain access, or are otherwise turned away from the property they believed they had rented.

Rental home scams are also occurring with regard to longer term residential rentals. Again ads are placed on sites like Craigslist and marketed at very low monthly rental rates. The scammers steal information from legitimate for-rent postings, and troll neighborhoods for vacant, abandoned and foreclosed homes. Prospective tenants in these scenarios may be shown the property before moving in as the scammers have changed the locks to unlawfully gain access. The scammers will collect a security deposit and first month’s rent, and may even provide keys and allow the consumer to move into the property. Typically, only when the true owner or a neighbor notices, will the tenant be aware they have been conned. The scammers in these scenarios typically require that monthly rent be paid in cash and will often appear in-person at the residence to collect the rent.

All consumers should be diligent before entering into any type of lease for a rental property or providing any deposit or rental payment by taking these steps first:

• Consider working with a licensed realtor or property management company when possible;
• If using an online search engine or website, research whether the property appears on other websites or listing platforms and make contact with the listing agents to determine which is the legitimate advertisement;
• Research who the true owner of the property is by doing a parcel search online: In Delaware, one can search New Castle County properties at http://www3.nccde.org/parcel/search/; Kent County properties at http://kent400.co.kent.de.us/PropInfo/PIName.HTM, and Sussex County properties at, https://sussexcountyde.gov/zoning-and-sales-information.
• Carefully review the posting, advertisement or lease for misspellings and grammatical errors;
• If you are looking at a rental through an online listing site, you should familiarize yourself with the site’s policies for detecting and dealing with potentially fraudulent listings;
• Never pay any security deposit or rental payment in cash—always use a check, money order or credit card—and demand a receipt;
• Demand a written lease in advance, that includes the identification and contact information of the landlord, as well as identification of the bank where your security deposit will be held;
• When possible, request a walk-through before agreeing to rent or paying any deposit;
• Talk to neighbors to learn more about the property and the owners—be cautious of properties with a recently deceased owner or foreclosure;
• If you meet the person claiming to be the landlord, request to see their credentials, such as a business card or realtor’s license, and identification; you should also make note of the make and model of their car and the license plate number.

Consumers who believe they may have been scammed should contact their local police department and file a report. They can also call the Attorney General’s toll-free Consumer Hotline at 1-800-220-5424 or email the Consumer Protection Unit of DOJ at consumer.protection@delaware.gov. If the listing was posted on an online platform, such as Craigslist, the consumer should also file complaints with the online platform and with federal law enforcement at www.ic3.gov.

The Delaware Department of Justice Consumer Protection Unit announced a settlement with retailer USA Discounters, also doing business as USA Living and Fletcher’s Jewelers, along with 49 other state attorneys general, to resolve the states’ claims of deceptive trade practices against the company. An estimated $203,000 will be paid to Delawareans who were USA Discounters customers as part of the settlement.

USA Discounters sold consumer products, including furniture, appliances, televisions, computers, smart phones, jewelry and other consumer goods principally on credit. USA Discounters typically marketed to members of the military and veterans, advertising that military, veterans and government employees would never be denied credit for goods purchased from the retailer. USA Discounters closed its stores in the summer of 2015 before later declaring bankruptcy.

The Attorney General offices alleged that USA Discounters engaged in unfair, abusive, false and deceptive acts and practices. These allegations include that, in collecting on consumer debts, USA Discounters engaged in abusive tactics when service members got behind on payments, including contacting service members’ chains-of-command, and causing some service members to lose security clearances and face demotions. The states also alleged that USA Discounters only filed its lawsuits in a few Virginia jurisdictions, no matter the service member’s location, deployment status, or residence. In addition, the states alleged USA Discounters sold overpriced household goods at high interest rates, often using the military allotment system to guarantee payment. These unlawful business practices, the states claim, were secured through misrepresentations and omissions in advertising, during the loan’s origination, and during the collection process.

USA Discounters agreed to provide relief to certain former and current customers. The total estimated value to consumers for these restitution measures is approximately $95.9 million, primarily benefiting active and veteran service members. Namely, USA Discounters agreed to:

• Write off all accounts with balances for customers whose last contract was dated June 1, 2012 or earlier, and correct the negative comment from the company on those consumers’ credit reports;
• Apply a $100 credit to all accounts whose contracts were dated after June 1, 2012, which were not discharged in bankruptcy, and correct the negative comment from the company on those consumers’ credit reports;
• Write off all judgments not obtained in the correct state, and correct the negative comment from the company on those consumers’ credit reports;
• Credit all judgments that were obtained in the correct state against members of the military with a credit equal to 50 percent of the original judgment amount;
• Pay a penalty of $40 million to the states should the bankruptcy allow. This $40 million penalty will be subordinated to all secured, administrative, priority, and unsecured claims that are allowed in the bankruptcy case, and it is not expected the company will have the resources to pay this penalty.

The value of the restitution to consumers in Delaware is approximately $203,000. This settlement is expected to impact 75 state residents.

Anticompetitive Conduct Delayed Generic Competition, Causing Consumers And The State To Pay More For Provigil

A settlement between Delaware, 47 other states, the District of Columbia and the drug company Cephalon could result in up to $250,000 to be paid to Delaware consumers to resolve claims the company delayed generic versions of Provigil from entering the market for several years.

The settlement ends a multistate antitrust investigation into anticompetitive conduct by Cephalon and affiliated companies to protect the monopoly profits it earned from its drug Provigil, which is used to treat certain sleep disorders, including narcolepsy. The settlement, which involved the Delaware Department of Justice Consumer Fraud Unit, is still subject to federal court review and approval.

The states alleged that, as patent and regulatory barriers that prevented generic competition to Provigil neared expiration, Cephalon intentionally defrauded the Patent and Trademark Office to secure an additional patent, which a court subsequently deemed invalid and unenforceable. Before that court finding, Cephalon was able to delay generic competition for nearly six years by filing patent infringement lawsuits against all potential generic competitors. Cephalon settled those lawsuits in 2005 and early 2006 by paying the generic competitors to delay sale of their generic versions of Provigil until at least April 2012. Because of that delayed entry, consumers, states and others paid hundreds of millions more for Provigil than they would have had generic versions of the drug launched by early 2006 as expected.

This multistate settlement was facilitated by litigation brought against Cephalon by the Federal Trade Commission, and the FTC’s settlement of those claims in 2015 allowed for funds to be distributed for settlement of certain related cases and government investigations, such as those of the 48 states and the District of Columbia.

Delaware’s total recovery will include: (1) an estimated $163,959 to $252,068 for distribution to Delaware consumers for payments for Provigil through a claims process to be created; (2) $59,533 to compensate the State of Delaware for certain Provigil purchases made by the Delaware Division of Medicaid and Medical Assistance; and (3) $324,007 to the Delaware Consumer Protection Fund, which pays for Delaware’s work on antitrust matters and other consumer-oriented investigations and legal actions.

Attorney General Matt Denn commended Deputy Attorney General Mike Undorf and the Consumer Protection Unit for their work on the case.

Misleading charitable solicitations that were misrepresented as going to Delaware fire companies have ended as a result of an investigation and a Cease and Desist Agreement from the Delaware Department of Justice targeted at Firefighter Support Services, Inc., a Michigan organization, and almost $6,000 in contributions will be returned to the Delaware fire community.

The solicitations by Firefighter Support Services took the form of telemarketing calls where the callers would repeatedly use the terms “firefighter” or “firemen.” Under Delaware law, use of certain terms that refer to law enforcement personnel such as “firefighter” or “police” are prohibited unless the caller is actually a bona fide law enforcement officer or employee, or the caller has written permission from a Delaware law enforcement agency to use such terms in their fundraising campaigns. The calls had been brought to the attention of the Delaware Department of Justice by Delaware fire companies who said the calls had no connection to any fire companies in the state, and DOJ alerted the public to the calls in February (https://news.delaware.gov/2016/02/02/attorney-general-warns-delawareans-about-fraudulent-fundraising-calls-to-support-delaware-firefighters-foundation/)

To resolve the violations, the Consumer Protection Unit of DOJ entered into an agreement which sanctions Firefighter Support Services, Inc. for its violations of Delaware law through civil penalties and demands restitution of the near $6,000 in donations from Delawareans since 2011. These restitution amounts will be distributed to the Delaware Volunteer Firefighter’s Association, Inc., a local non-profit that counts all 60 Delaware fire companies as members and provides education, training, outreach and other services relevant to the Delaware firefighter community.

“It can never be stated enough how our fire companies protect our communities and it is the least we can do to aggressively pursue those who would trade on Delaware firefighters’ outstanding reputation for fraudulent donations,” Attorney General Matt Denn said. “I appreciate the fire companies that brought it to our attention and Deputy Attorney General Gillian Andrews and Special Investigator Alan Rachko for achieving the resolution in this case.”

Joseph Zeroles, President of the Delaware Volunteer Firefighters Association said, “It is sad when people take advantage of the great work done by the Delaware volunteer fire companies to pray upon unsuspecting citizens. We wish to thank everyone in the Attorney General’s Consumer Protection Unit for their tireless effort in bringing this to resolution.”

The terms of the Cease and Desist Agreement also provide that Firefighter Support Services, Inc. shall not further violate provisions of Delaware’s charitable solicitation laws. In connection with this enforcement action, Firefighter Support Services, Inc. completely ceased its charitable solicitations in Delaware as of February 2016.

If you are interested in donating to your local fire company, the Attorney General encourages you to visit your local firehouse to drop off your donation in person, or donate directly to the fire company another way. A list of all local fire companies in Delaware and their contact information can be found at the Office of the State Fire Marshal: http://statefiremarshal.delaware.gov/information/fire_companies.shtml.

Anyone who suspects they have received a suspicious solicitation, the Attorney General encourages donors to call the toll-free Consumer Hotline at 1-800-220-5424 or email the Consumer Protection Unit at consumer.protection@delaware.gov.