Consumer Legal Protections and Settlements

Amazon is suing the Consumer Product Safety Commission (CPSC) to challenge the commission's order that Amazon is obligated to recall hundreds of thousands of dangerous products.

The lawsuit, filed March 14 in Maryland, where the CPSC is located, argues that Amazon doesn't have a legal obligation to issue recalls or provide refunds for products sold on its marketplace by third-party sellers because it only provides the logistics.

While Amazon sells some of its own products, most items on its marketplace are offered for sale by third parties who pay Amazon to "fulfill" orders by listing them on its site and also by storing and shipping them when they are purchased. 

"The [CPSC] may issue recall orders to the manufacturers, distributors, and retailers of a product, but not to third-party logistics providers who store the product in their warehouses and transport it to customers," Amazon said in the lawsuit.

In January, after an administrative hearing, the CPSC ordered that Amazon was responsible for the recall of more than 400,000 recalled products it distributed, including faulty carbon monoxide detectors, hairdryers without electrocution protection and children’s sleepwear that violated federal flammability standards.

"It is the U.S. Consumer Product Safety Commission’s job to hold companies like Amazon accountable for distributing hazardous products.  No company is above the law," said commissioner Richard Trumka after the order was issued in January. "The resolution of this case brings protection to consumers exposed to hazardous products. This is an essential step toward ensuring every consumer, regardless of where or how they shop, can trust the safety of the products they bring into their homes." 

The CPSC has been at odds with Amazon over the recalls since 2021.

The commission's order, effective Jan. 26, required Amazon to provide full refunds to buyers who submit proof of destruction or disposal of the products and to notify buyers of the recalled products because it was a "distributor" under the law.

But Amazon said it isn't required to do so under the law although it said it voluntarily "took prompt and decisive action," including blocking further sales of the products, destroying products in warehouses and contacting each of the 376,009 purchasers.

An 'absurd' argument

Not everyone is buying Amazon's argument.

The court should reject Amazon's lawsuit, which relies primarily on procedural arguments in its attempt to skirt responsibility under product safety law, said William Wallace, director of safety advocacy for the nonprofit publication Consumer Reports, in a statement.

"It’s absurd to suggest that because a company hosts a marketplace online it should be exempt from sensible requirements that help get hazardous products out of people’s homes and prevent them from being sold," Wallace said. The three other commissioners issued similar statements. 

Amazon didn't immediately respond to ConsumerAffairs's request for comment.

Although the CPSC's decision only covers previously recalled products that were identified, it puts pressure on e-commerce platforms to take more responsibility for future recalls, said Courtney Griffin, director of consumer product safety at the nonprofit Consumer Federation of America, to ConsumerAffairs.

“Online marketplaces need more robust systems to vet products before the products make their way into American homes,” Griffin said. “E-commerce giants must ensure consumers are safeguarded adequately in the rapidly expanding online marketplace."

A federal court has temporarily shut down the operations of Growth Cave, a business opportunity and credit repair scheme accused of defrauding consumers out of $50 million. The decision comes after the Federal Trade Commission (FTC) filed a lawsuit against the company and its executives, alleging deceptive practices and false income promises.

The lawsuit, filed in the U.S. District Court for the Central District of California, names Growth Cave’s founder Lucas Lee-Tyson, along with Osmany Batte, also known as “Ozzie Blessed,” and Jordan Marksberry, as key figures in the scheme. The FTC claims they misled consumers into purchasing expensive programs with guarantees of earning thousands of dollars, only to leave them with empty promises and mounting debt.

​“The FTC has its eye on business opportunity schemes like this one and will take decisive action to stop them,” said Chris Mufarrige, Director of the FTC’s Bureau of Consumer Protection.

False promises, lavish lifestyles

Growth Cave’s primary business model revolved around selling a program called Knowledge Business Accelerator (KBA), which was promoted through YouTube ads. The program falsely claimed that consumers could earn between $20,000 and $50,000 in passive income by developing and selling digital education courses, the FTC said.

In promotional videos, Lee-Tyson portrayed himself as a marketing expert and self-made millionaire, while Batte claimed to have expertise in mindset coaching and hypnosis.

According to the FTC’s complaint, Lee-Tyson and Batte used videos showcasing luxury lifestyles to convince potential buyers of their programs’ success. However, the agency alleges that these lavish displays were funded by the money they took from unsuspecting consumers.

A costly investment with no returns

Consumers who expressed interest in KBA were subjected to aggressive email marketing and sales tactics, culminating in a “strategy call” where they were pressured to invest thousands of dollars in the program. Growth Cave even offered a $10,000 profit guarantee, leading many to believe their investment was safe.

However, once consumers purchased KBA, they struggled to receive the promised support and were left with generic advertising scripts requiring substantial revision. Many also faced undisclosed requirements before launching their courses, only to find that they could not generate any income.

The company also sold an “upgraded” version of KBA, called Digital Freedom Mastermind (DFM), for an additional $30,000 to $50,000, claiming it would provide a fully automated business solution. Consumers who purchased the upgrade reported that the promised services were never delivered.

The complaint also highlights another Growth Cave venture, Cashflow Consultant Academy (CCA), which falsely promised to connect participants with wealthy business owners for high-paying sales jobs. Instead, many found themselves working for other Growth Cave customers or were never placed with a client at all.

In 2023, Growth Cave launched Buffalo Bridge, a bogus credit repair service charging consumers $6,800 upfront for supposed credit repair and business loan services. Instead, the company simply signed consumers up for multiple business credit cards.

Rebranding and new schemes

Despite facing private lawsuits from defrauded consumers, the FTC alleges that Lee-Tyson and Batte continued to launch new scams under different names. In March 2024, Lee-Tyson introduced PassiveApps, an AI-powered business opportunity that followed the same deceptive blueprint as KBA—even using recycled testimonials from past schemes.Meanwhile, Batte launched ApexMind, mirroring the CCA scheme.

Consumers who have fallen victim to similar scams are encouraged to report fraud at ReportFraud.ftc.gov.

The Federal Trade Commission (FTC) has secured an early victory in its legal battle against Seek Capital and its CEO, Roy Ferman, after the U.S. Court for the Central District of California granted a preliminary injunction against the company.

The ruling prohibits Seek Capital from making false claims regarding small business loans or lines of credit and prevents the company from contacting any consumers whose information was obtained before February 20, 2025. The injunction is intended to prevent further harm to small business owners as the case proceeds to trial.

The FTC originally filed its complaint in November 2024, alleging that Seek Capital targeted new and aspiring small business owners with deceptive promises of securing business loans or lines of credit.

Instead of delivering on these promises, the company charged clients thousands of dollars to open personal credit cards in their names. According to the FTC, these fraudulent practices have cost small business owners over $37 million.

The district court found that the FTC was likely to succeed on all its claims and deemed the injunction necessary to prevent Seek Capital from continuing to collect payments from affected consumers. The court also noted that the company's deceptive practices warranted immediate intervention to mitigate further financial harm.

The Consumer Financial Protection Bureau is winding down its operations under the Trump Administration, and last week dismissed the first of 38 pending cases that are all expected to be thrown out.

The case involved Solo Funds, Inc., an online provider that lent money in small amounts. The complaint filed by the CFPB under its previous management accused Solo of misrepresenting the true cost of is product.

But what the Biden-era CFPB called misrepresentation, the Trump Administration's Russ Vought calls "innovation."

Vought, the architect of the 2025 Playbook, said CFPB was "wrong" to file the action against Colo. 

The Consumer Federation of America (CFA) criticized the dismissal.

“Solo Funds lied to its customers, plain and simple, and California, Connecticut and Washington D.C., have all also pursued Solo for its clearly fraudulent scheme," saidErin Witte, CFA’s Director of Consumer Protection. 

“The 2008 financial crisis was caused by lenders touting ‘innovative’ financial products, and our country is headed for another economic meltdown if we continue to cripple the CFPB,” Witte said. 

Vought has signaled that he intends to walk away from all 38 pending enforcement actions. The agency's headquarters has been shuttered for weeks and most of its employees fired.

After the 2008 financial crisis, Congress gave the explicit directives to establish offices and programming dedicated to protecting vulnerable consumers, issue regulations to govern particular industries, and ensure transparent access to information about consumer financial products.

Since opening its doors, the CFPB has directly obtained over $21 billion in relief for over 205 million people from companies that illegally cheated consumers.

President Trump has nominated Jonathan McKernan to be the director of the Consumer Financial Protection Bureau (CFPB).

If confirmed by the Senate, McKernan would replace Office of Management and Budget Director Russell Vought, who is serving as acting bureau director.

The vacancy was created when Trump fired Rohit Chopra on Feb. 1. He had headed the consumer watchdog agency since October 2021.

Earlier this week, McKernan stepped down as a member of the FDIC board after Trump nominated Rodney Hood as a member. He said on a post on X that if Hood is confirmed, the number of Republicans on the Board would exceed the maximum allowed under federal law. No more than three members of the FDIC board may be members of the same party. Shortly after that, Trump nominated McKernan as CFPB Director.

McKernan joined the FDIC board in January, 2023. Before that, he served as counsel to then-Sen. Pat Toomey, R-Pa., on the staff of the Senate Banking Committee. He also was Senior Counsel at the Federal Housing Finance Agency and a Senior Policy Advisor at the Treasury Department. McKernan also was a Senior Financial Policy Advisor to then-Sen. Bob Corker, R-Tn.

From November 2023 to May 2024, McKernan was co–chairman of a special committee of the FDIC Board that oversaw an independent third-party review of allegations of sexual harassment and professional misconduct at the FDIC, as well as issues relating to the FDIC’s workplace culture.

The Federal Trade Commission has announced the finalization of the Junk Fees Rule, aimed at prohibiting deceptive pricing practices in the live-event ticketing and short-term lodging sectors. The rule targets the use of "bait-and-switch" pricing, where consumers encounter unexpected fees during checkout, inflating the total cost beyond the advertised price.

"People deserve to know up-front what they’re being asked to pay—without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid," said FTC Chair Lina Khan. 

The FTC said the rule is expected to save Americans billions of dollars and millions of hours previously wasted on searching for the true cost of services.

The Junk Fees Rule requires that businesses must clearly disclose the total price, inclusive of all mandatory fees, whenever they advertise prices for live-event tickets or short-term lodging. This requirement aims to simplify comparison shopping for consumers and ensure a level playing field for businesses that adhere to honest pricing practices.

Two years in the making

The rule's development began in 2022, with the FTC seeking public input on the impact of hidden fees. The Commission crafted a rule after receiving more than 72,000 comments. It says the rule not only addresses consumer concerns but also maintains flexibility for businesses. It does not ban specific fees or pricing strategies but insists on transparency and truthfulness in advertising

The FTC estimates that the rule will save consumers up to 53 million hours annually, equating to more than $11 billion over the next decade. The rule requires that the most prominent price displayed in any advertisement be the all-inclusive total price, ensuring that consumers are not misled by partial pricing.

While the rule specifically targets the ticketing and lodging industries, the FTC said it will continue to monitor deceptive pricing practices in other sectors. 

A lawsuit filed in an Ohio state court takes aim at pharmacy benefit managers (PBM), accusing them of driving up prescription drug costs for patients. The suit, filed by Ohio Attorney General Dave Yost, accuses the industry of employing tactics designed to reduce competition and keep prices high.

In a statement, Yost didn’t mince words. Noting that PBMs are supposed to be “middlemen” between the drug companies and the pharmacies, he said the desired competition has never materialized.

“PBMs are modern gangsters,” Yost said. “They were designed to protect and negotiate on behalf of employers and consumers after Big Pharma was criticized for overpricing medications, but instead they have absolutely destroyed transparency, scheming in the shadows to control drug prices on all sides of the market.”

Three major players

The suit claims that consolidation in the industry has led to “collusion” on prices. Currently, three companies – Express Scripts, Humana, and Cigna – reportedly control more than 70% of the PBM market. So far, none of those companies have commented on Yost’s lawsuit.

Yost’s suit seeks to stop the PBMs named in the complaint from carrying out “secret and anti-competitive conduct and strong-arm tactics” preventing the marketplace from determining prices for prescription drugs. It also seeks statutory fines and “disgorgement of the ill-gotten profits.”

PBMs are key players in the healthcare system. Many employers and unions, as well as local and state governments, contract with PBMs to manage their payments for prescription drugs. Among the services a PBM provides, it processes payments to pharmacies and determines which drugs it will pay for. Critics, like Yost, have claimed a lack of transparency has worked against consumers.

Insulin costs

Yost says the high cost of insulin has been an example of how drug prices have inflated in recent years, noting more than one million people in his state are diabetic and need the drug. In recent weeks three major drug companies have announced reductions in insulin prices.

“Medications shouldn’t cost an arm and a leg, metaphorically or literally,” Yost said. “Insulin is just a symptom of the problem; PBMs are the disease.”

In the background, the U.S. Senate is considering legislation to place limits on what PBMs can do and to increase industry transparency. Last week the Senate Commerce Committee approved the PBM Transparency Act of 2023, sending the reform legislation to the full Senate. 

Even in a deeply divided Congress, chances of approval appear good since the measure enjoys rare bipartisan support.

“It’s a win-win and warrants swift approval in Congress,” said Sen. Chuck Grassley, (R-Iowa), a co-sponsor of the legislation.

The District of Columbia’s Attorney General, Karl Racine, has filed a lawsuit against Grubhub over allegations that the company offered consumers delivery services from more than 1,000 Washington, D.C., restaurants without getting those restaurants’ consent.

On top of that, Racine claims that Grubhub charged consumers higher prices than what the restaurants did, then misrepresented the number of fees consumers were charged.

If Grubhub had been watching Racine’s previous moves against delivery companies, it likely knew that a lawsuit like this was possible. The attorney general has previously filed lawsuits against DoorDash and Instacart.

He accused DoorDash of misrepresenting how tips paid by consumers would be distributed to couriers. Instacart faced a separate lawsuit over its check-out screen, which Racine claimed was designed to deceive customers about the reasons behind a service fee.

Grubhub responds to lawsuit

In comments emailed to ConsumerAffairs, Grubhub refuted that it defied District of Columbia laws.

“We work hard to support DC restaurants and diners, and we continually review and enhance our operations to better serve them and meet their expectations," a Grubhub spokesperson said. 

“During the past year, we've sought to engage in a constructive dialogue with the DC Attorney General’s office to help them understand our business and to see if there were any areas for improvement. We are disappointed they have moved forward with this lawsuit because our practices have always complied with DC law, and in any event, many of the practices at issue have been discontinued. We will aggressively defend our business in court and look forward to continuing to serve DC restaurants and diners.” 

One of the lines that Racine claims Grubhub crossed was related to a promotion called “Supper for Support” – an offer made to consumers “as a way for them to save money, while at the same time supporting local independent restaurants that had been affected by the decline of business due to the Covid19 pandemic.”

The issue Racine has with the promotion was that it didn’t actually support restaurants at all. In fact, he said the restaurants were responsible for paying Grubhub commissions on the full, non-discounted price of the food total.

The Grubhub spokesperson said the Supper for Support promotion is no longer running but that it did, in fact, do “many things to support residents and restaurants in DC and across the country throughout the pandemic.”

“The terms of the Supper for Support program were clearly disclosed to restaurants, and they could decide if they wanted to participate or not,” Grubhub told ConsumerAffairs.

“In addition, diner-facing promotions for Supper for Support in no way stated or implied that participating restaurants were not financially obligated for the discounts. In promotions moving forward, Grubhub will disclose to diners when a diner promotion is funded by the restaurant.”

Arkansas Attorney General Leslie Rutledge has accused Walgreens of failing to halt suspicious prescription orders at Arkansas locations, thereby “substantially” contributing to the opioid crisis in the state. 

In a lawsuit filed Monday, Rutledge claimed the drugstore giant’s lack of action in reporting orders that didn’t appear to be medically legitimate exacerbated "the oversupply of such drugs and fueling an illegal secondary market.”

The lawsuit noted that Walgreens distributed more than 142 million dosage units of oxycodone and hydrocodone in Arkansas from 2006 to 2014. A majority of counties in the state -- 66 out of the 75 -- have higher opioid prescribing rates than the national average. 

“This high volume of opioids alone should have alerted Walgreens to the fact that suspicious orders were being placed, as the amount of opioids that were sent into Arkansas far exceeded what could be consumed for medically legitimate purposes," the lawsuit said. "Yet, Walgreens failed to report and halt those orders and instead increased the number of pills distributed."

Walgreens intends to fight back

Rutledge said the lawsuit seeks "to force Walgreens to act responsibly and follow federal and state laws and damages for fueling the epidemic,” and to impose "civil penalties for each violation of Arkansas’s consumer protection laws.” 

While the suit can’t reverse the damage already done, the attorney general said the suit may be able to bring “desperately needed assistance to devastated families and communities" in the state. 

In a statement to various media outlets, Walgreens said it plans to "vigorously defend itself against this litigation.” A company spokesperson said that Walgreens’ key focus has always been the health and safety of patients. 

The spokesperson added that Walgreens pharmacists "always evaluate the patient, the prescriber, the drug, the applicable law, and the surrounding circumstances prior to making an appropriate professional decision whether to fill a prescription for a controlled substance."

Twitter has filed a lawsuit against Texas attorney general (AG) Ken Paxton over an investigation into its content moderation practices. The platform claims that the AG misused his power by starting an investigation as revenge for the social media platform’s suspension of former President Donald Trump.

Paxton’s investigation began on January 13 -- six days after Twitter banned Trump from its platform -- when the AG’s office issued civil investigative demands to Google, Facebook, Twitter, Amazon Web Services, and Apple. It asked each of those companies for their policies and practices regarding content moderation. 

Scrutiny was apparently placed on the platforms’ First Amendment rights to determine if private companies have the latitude to remove public officials from their platforms as they deem appropriate. 

Paxton claimed at the time of the investigation’s launch that “the seemingly coordinated de-platforming of the President of the United States and several leading voices not only chills free speech, it wholly silences those whose speech and political beliefs do not align with leaders of Big Tech companies.”

A meeting of the minds went nowhere

In each case, Paxton asked the individual companies to “meet and confer … in order to discuss compliance and to address [an] attempt to resolve all issues.” Twitter took issue with that request and its implications.

“Twitter seeks to stop AG Paxton from unlawfully abusing his authority as the highest law-enforcement officer of the State of Texas to intimidate, harass, and target Twitter in retaliation for Twitter’s exercise of its First Amendment rights,” Twitter wrote.

According to Politico’s coverage of the story, Twitter claims it tried to work out an agreement with the AG to limit the scope of his office’s request, but the two parties weren’t able to pull that off.

“Instead, AG Paxton made clear that he will use the full weight of his office, including his expansive investigatory powers, to retaliate against Twitter for having made editorial decisions with which he disagrees,” the company said.

Twitter and Paxton have history

Paxton has tangled with Twitter before over its content moderation policies, claiming in a Fox News opinion piece in May 2020 that Twitter’s fact checkers were politically biased against Trump.

While Twitter wasn’t alone in taking action against Trump, it is the only hold-out among the group not to have reinstated the former president’s accounts. It was also the first to retaliate against Paxton’s investigation. While the company is alone in that department for the moment, Politico’s Benjamin Din says there is still some angst between the major social media companies and conservatives.

“The court filing is the latest development in an ongoing battle between social media companies and those on the right, who have viewed attempts to fact-check content and de-platform conservative accounts as indicative of a societal cancel culture intent on silencing Republican voices,” Din said.

“Conservatives latched on to accusations against Big Tech as a rallying cry in the aftermath of the [January 6 Capitol Hill] riots, with some predicting that it could be a key GOP issue for the midterm elections and in 2024. The anti-Silicon Valley sentiment is now a defining theme of the Republican Party, which has in recent years hauled in CEOs for hearings. Last fall, Trump appointees filed two major antitrust suits against Google and Facebook.”

The next time you’re bargain shopping at Dollar General, Dollar Tree, or Family Dollar, you might want to pay a little more attention to see if a product’s expiration date hasn’t passed.

The New York Attorney General’s office paid considerable attention to those cautionary flags and has now ordered those bargain stores to pay $1.2 million in fines and damages as a result of selling expired over-the-counter drugs, obsolete motor oil, and more.

“It’s a tough pill for New Yorkers to swallow that the over-the-counter drugs they were buying may have been expired,” New York Attorney General Letitia James said in a news release. 

“New York consumers have a right to expect that products on store shelves are safe, fresh and suitable for their advertised use. These settlements will ensure that Dollar General, Dollar Tree, and Family Dollar will not only pay both a substantial fine and damages, but, more importantly, update their business practices to comply with the law so that no expired over-the-counter drugs are sold to a New York consumer again.” 

Motor oil?

While finding the expiration dates on grocery items is pretty easy, it’s not the same for other products. For example, fake UL labels have been slapped on low-cost items such as power strips, extension cords, mobile-phone chargers, and batteries, which could lead to fire and shock hazards.

The interesting twist in this case is that the fine involves motor oil. Investigators found several Dollar General stores selling one company-branded motor oil that isn’t suitable for most automobile engines built after 1930; another oil was found to be unfit for engines built after 1988. 

Adding to the investigators’ dismay, the descriptions of those motor oils were strikingly close to more well-known brands and placed on the same shelves without any signage warning consumers about the mismatch of the oils with today’s car engines.

The New York Attorney General’s office says that customers who bought the old motor oil can file a complaint online. 

A good reminder to pay attention

While the settlement is centered on Dollar General, Dollar Tree, and Family Dollar stores in New York, it’s still a reminder that, no matter where you live, there are reasons why a product is sold for as low as a dollar -- and some of those reasons wind up being bad for the consumer.

A core of ConsumerAffairs reporting is about recalls, and the Consumer Product Safety Commission has dozens of pages of recalls and warnings about various consumer products. Before you buy something that might cost you mightily in another regard like health or safety, it might be wise to do a quick search to see if that product is safe and dependable.

Young athletes from across the country go through high school hoping to catch the eye of a college scout, but New York Attorney General Eric Schneiderman charges one scouting company with preying on those hopes and making false promises.

National Scouting Report, Inc. (NSR) – a major high school athletic scouting and college recruiting business based in Alabaster, Alabama – has agreed to settle charges that it misled prospective clients and made false claims in its advertising. As part of the settlement, it has agreed to revise practices and pay $20,000 in penalties.

“Preying on the hopes and aspirations of New York’s young, devoted athletes is incredibly cynical,” said Schneiderman. “Students who are attempting to use their athletic promise to further their educational opportunities should not have to worry about being exploited by those seeking to make a profit, without any consideration for their success.”

Deceptive practices

The New York AG’s investigation found that NSR made several unsubstantiated claims about the success of its recruiting program, such as calling itself the “highest rated scouting company” that was “resourced by more college coaches than all other scouting services combined.”

Additionally, recruiters often relayed false statistics to high school players and their families, including that 90% of its prospective athletes received offers from schools and that a quarter of them went on to play in NCAA Division I programs, the AG charged. The truth for college athletes is much bleaker than that, however, with only 3.4% of high school athletes making it to the collegiate athletic level and only 1% going on to play at Division I schools.

Regardless, Schneiderman found that NRS agents told certain families that they were “100% sure” they could get their son “into a good school,” claims that turned out to be patently false.

Officials say that NRS also claimed to have scouts that were well-trained and experienced, but the investigation revealed that many of these agents only received one week of training on sales techniques and how to evaluate more than a dozen sports.

Settlement terms

Schneiderman says these agents often approached high school athletes at competitions with the hopes of selling the company program to their families, which cost $3,000 to enroll in.

Families who signed up were promised that the scout would stay actively and personally involved in their athlete’s recruiting process, but many consumers complained that their calls were never returned and that the scout and other company officials simply disappeared.

Under the settlement, NSR has agreed to change the way it advertises and reform its training and sales practices. The company will also pay $20,000 in penalties, costs, and consumer restitution and remove any language on its website that cannot be substantiated.

Affected New York consumers will also be provided with an applicable notice of cancellation requirements when they sign up for the service, and NSR has promised to tell clients in the future if their scout leaves NSR.