Delaware DOJ Warns Delawareans About Fraudulent Fundraising Calls For Firefighters

The Consumer Fraud Unit of the Delaware Department of Justice warns Delawareans to be wary of unauthorized and fraudulent telephone solicitations in the wake of the recent tragedy involving two Wilmington firefighters who lost their lives in the line of duty.

DOJ has become aware of potentially fraudulent calls to Delaware homes in the last few days. Often scammers will try to take advantage of tragic current events or natural disasters to convince people to donate money. While there are often legitimate fundraising efforts underway in such circumstances, there may be others that are not. Thus, it is important to keep in mind the following when answering an unsolicited call on behalf of any purported charitable cause.

Delaware law requires callers to supply you with certain information, including:
• Whether they are a paid fundraiser;
• Where they are calling from, including company name and location;
• The charity for which the funds are being raised;
• The amount of the consumer’s donation that will actually go to the charity;
• If the charitable solicitation is on behalf of an individual(s) or their family, whether the party soliciting you has permission from the individual(s) or their family to make use of that person’s name, picture or likeness in their charitable solicitations; and
• If they are calling on behalf of police, fire or law enforcement, they must either be an actual law enforcement employee or have written permission from the state, county or local first responder organization to make the call.

Those who wish to contribute toward a fund benefitting families of the fallen firefighters may want to contact the Wilmington Fire Department directly.

Scam solicitations supposedly on behalf of firefighters are unfortunately somewhat common. In July, the Delaware Department of Justice announced an agreement with Michigan-based Firefighter Support Services to cease making solicitation phone calls into Delaware that were supposedly on behalf of firefighters, and to forfeit almost $6000 in contributions made from Delawareans since 2011. In August, the Michigan Attorney General’s Office announced the organization would cease operations after an investigation.

The DOJ Consumer Protection Unit reminds you to never give your credit card or bank account information in response to one of these calls. Someone calling you to make a legitimate telephone solicitation on behalf of a charitable organization should be willing to mail you a written donation form and envelope. If you wish to donate to your local fire company, you should visit your local fire house to make your donation in person.

You can make sure a charity is legitimate by visiting the Better Business Bureau, Charity Navigator, or the American Institute of Philanthropy where you can view lists of verified charities. For online donations, ensure that the solicitation website and the purported charity match and that the website is secure.

Anyone who suspects they have been scammed or have received a suspicious solicitation can call the Attorney General’s toll-free Consumer Hotline at 1-800-220-5424 or email the Consumer Protection Unit at consumer.protection@delaware.gov.


Social Worker Arrested for Medicaid Fraud

Counselor billed Medicaid for fictitious office visits

WILMINGTON, DE – Pamela Davis, 51, of Bear, a self-employed Licensed Clinical Social Worker operating PD Counseling Services out of several locations in New Castle County, was arrested July 8, 2015, for health care fraud, theft of more than $1,500, and falsifying business records.

Davis contracted with Delaware Medicaid and Medical Assistance and Delaware Physicians Care, Inc. to provide social work services to Delaware Medicaid recipients. As part of their normal course of business, Delaware Physicians Care, Inc. sent out verification letters to validate services rendered and accurate billing practices. In 2013, Delaware Physicians Care, Inc. received responses from several of Davis’ clients, advising they had not seen Pamela Davis for services rendered or paid on the dates in question.

Special investigators from the Delaware Department of Justice’s Medicaid Fraud Control Unit conducted interviews of Davis’ clients and discovered that from approximately January 2013 through May 2015, Davis routinely billed, and was paid by Delaware Physicians Care, Inc. for services that appear to have never been rendered. A search warrant of Davis’ business in June 2015 yielded logbooks containing alleged fraudulent patient visit information. Investigators allege that Pamela Davis billed Delaware Physicians Care, Inc. for 160 visits that never occurred and in return, fraudulently received over $11,500 in Medicaid funds for services not rendered.

Pamela Davis was arraigned at New Castle County Police Department and released on $22,000 unsecured bail.

In all cases, defendants are presumed innocent until and unless proven guilty.


Recent Settlements By DOJ Fraud Division Highlight Protection of Delaware Consumers

Some Delaware consumers eligible for restitution from Chase for debt collection, Classmates.com for unauthorized membership

Two recent settlements pursued by the deputy attorneys general of the Consumer Protection Unit in the Department of Justice Fraud Division will benefit consumers in Delaware and protect investors.

“DOJ’s Fraud Division works every day to investigate and resolve complaints by consumers and investors, often working in concert with other states and with federal agencies to change the practices of, and obtain restitution from, companies,” Attorney General Matt Denn said. “This results in restitution amounts large and small for Delaware consumers, and these settlements are examples of that.”

Classmates/FTD: Some Delaware Members of Classmates.com Eligible for Restitution, Should Contact Consumer Protection Unit

Classmates, Inc. (“Classmates”), along with Florists’ Transworld Delivery, Inc. and FTD.com Inc. (collectively “FTD”), have agreed to make payments to consumers and to states to settle allegations that the companies engaged in misleading advertising and billing practices.

Delaware consumers who were enrolled into Classmates’ subscription service without authorization or who experienced difficulty when trying to cancel their Classmates subscription and who have not previously filed a complaint with their attorney general, may file a complaint with their Attorney General at www.attorneygeneral.delaware.gov or by calling (302) 577-8600 before August 24, 2015.

The multi-state investigation specifically focused on the companies’ relationships with third-parties who used negative option marketing practices to sell membership programs to consumers doing business online with Classmates and FTD. Negative option marketing is a sales practice in which a seller treats a consumer’s failure to take an affirmative action, either to reject an offer or cancel an agreement, as assent to be charged for goods or services.

These third-party marketers offered programs such as discount buying clubs and travel rewards programs, often immediately after the consumer’s online transaction with Classmates or FTD. Unbeknownst to the consumer, Classmates and FTD would share consumers’ personal information, including credit card account numbers (a practice known as “data pass”) so that the consumer could be billed for these offers if they did not cancel. Congress banned data pass in Internet transactions in 2010

The agreement includes a number of terms to ensure that consumers knowingly consent to the purchase of any membership program offered by a marketing partner of Classmates or FTD, including the following injunctive terms, including: a prohibition against misrepresenting the reason for requesting a consumer’s account information; Classmates/FTD’s marketing partners cannot use FTD and Classmates’ names or logos in the title of a membership program, and any offer must be made after the consumers have concluded their transactions with Classmates or FTD, in order to ensure that consumers understand they are receiving a separate and distinct offer from a company other than FTD and Classmates; clear and conspicuous disclosures in “trial offers” informing consumers that they will be transferred to another site to receive a membership offer and the consumers must consent to the transfer; Classmates/FTD and its marketing partners cannot state an offer is “free” or “risk free” if the offered program will convert to a paid subscription

The states also investigated Classmates’ renewal and cancellation practices in connection with its own social network subscription services offered to consumers through its website, Classmates.com, alleging that consumers were not adequately informed that their subscriptions would automatically renew and that it was difficult for consumers to cancel their subscriptions. The companies agreed to change their practices regarding renewals and cancellations, and consumers who filed complaints regarding Classmates’ renewal and cancellation practices may also receive restitution under the settlement.

Classmates and FTD denied any wrongdoing, but agreed to the $3 million restitution fund for consumers and agreed to make an $8 million payment to the 22 attorneys general who took part in the settlement. Delaware’s $180,000 share will go to the Consumer Protection Fund, which funds the operation of the Consumer Protection Unit that pursues fraud cases against businesses large and small.

Chase: Credit Card Debt Collection Practices To Change; Collection Efforts On 329 Delawareans To Cease; Some Delawareans Eligible For Restitution

Chase Bank USA N.A. and Chase Bankcard Services Inc. will reform credit card debt collection practices and provide restitution to consumers in Delaware and nationwide as a result of a settlement with the Delaware Attorney General, attorneys general in 46 other states plus the District of Columbia and the federal Consumer Financial Protection Bureau.

As part of the agreement, Chase has agreed to cease collection efforts on over 329 Delaware-based accounts. Delawareans who were forced to pay charges to Chase or third-party collection agencies above the actual balance they owed are eligible for a refund of that amount plus an additional 25%. Chase customers who are eligible for the restitution will be contacted, but Delawareans who think they may be eligible can contact the Consumer Protection Unit of the Delaware Department of Justice at (302) 577-8600.

According to the joint state-federal probe, Chase subjected consumers to collections activity for accounts that were not theirs, in amounts that were incorrect or uncollectable; subjected consumers to inaccurate credit reporting and unlawful judgments that may affect consumers’ ability to obtain credit, employment, housing and insurance in the future; sold certain accounts to debt buyers that were inaccurate, settled, discharged in bankruptcy, not owed by the consumer, or otherwise uncollectable; filed lawsuits and obtained judgments against consumers using false and deceptive affidavits and other documents that were prepared without following required procedures, a practice commonly referred to as “robo-signing”; and made calculation errors when filing debt collection lawsuits that sometimes resulted in judgments against consumers for incorrect amounts.

The agreement requires Chase to take a number of steps to address the unlawful conduct uncovered during the investigation, including:

• Implementing new safeguards to help ensure debt information is accurate and inaccurate data is corrected;
• Providing additional, more detailed, information to consumers who owe debts;
• Barring Chase’s debt buyers from reselling consumer debts to other purchasers;
• Ceasing collection efforts on more than 528,000 consumer accounts, including an estimated 329 in Delaware, for which Chase previously sued and obtained a judgment;
• Notifying the borrowers affected by the above change and requesting that all three major credit reporting agencies stop reporting those judgments;
• Ensuring payment of $50 million in consumer restitution nationally by July 1, 2016, refunding amounts paid by those consumers to Chase or third party collection agencies above the actual balance owed, plus an additional 25% of that overage. 11 Delawareans have already received approximately $7,000 so far.

In addition to the consumer relief provisions, Delaware will receive $593,793.28 out of a $95-million monetary payment Chase has agreed to with the 47 participating states and the District of Columbia. Delaware’s share will go into the Consumer Protection Fund.