Current Events in March 2019

Walgreens is planning to sell creams, patches, and other topical products that contain CBD, the component of cannabis that does not get users high but is thought to have medicinal properties.

Walgreens made the announcement despite some uncertainty over whether the feds plan to crack down on consumer products that contain CBD. The Farm Bill in 2014 legalized hemp, a cannabis crop with no psychoactive properties that can be used to produce CBD. But the bill only legalized hemp in states that had voted to do so for research purposes, and state lawmakers have offered differing opinions over whether that means they can allow commercial sales as well.

The more recent Farm BIll, signed by President Donald Trump in December 2018, went a step further by taking hemp off of the Controlled Substance List, removing the crop from the grip of the Drug Enforcement Agency (DEA) once and for all. Since then, hemp farmers in states where it was legalized, such as Kentucky, have increased their acreage. The hemp industry predicts that hemp products will be worth $2.9 billion by 2022.

Available at 1,500 Walgreens stores

CBD products represent an important component of the hemp industry. Though anecdotal evidence suggests that CBD can be helpful with certain medical conditions, researchers in the United States have previously been unable to study the substance due to federal drug regulations.

The Food and Drug Administration (FDA) says that companies are still banned from putting CBD in food or dietary supplements. Walgreens says that the CBD products will be available in 1,500 stores and will be limited to health, wellness, and beauty products.

"This product offering is in line with our efforts to provide a wider range of accessible health and wellbeing products and services to best meet the needs and preferences of our customers," Walgreens spokesman Brian Faith told CNBC.

The products will be available at stores in Colorado, New Mexico, Kentucky, Tennessee, Vermont, South Carolina, Illinois and Indiana.

Following a whirlwind of scandals and regulatory actions, Wells Fargo CEO, president, and board member Tim Sloan has announced that he will be stepping down from his position at the company effective immediately. The executive said he would fully leave the company and enter retirement at the end of June.

“It has become apparent to me that our ability to successfully move Wells Fargo forward from here will benefit from a new CEO and fresh perspectives. For this reason, I have decided it is best for the Company that I step aside and devote my efforts to supporting an effective transition,” Sloan said.

In a news release, Wells Fargo said that C. Allen Parker will serve as interim CEO and president until the company can complete an external search for a new candidate to replace Sloan.

“Tim Sloan has served this Company with pride and dedication for more than 31 years, including in his role as CEO since October 2016. He has worked tirelessly over this period for all of our stakeholders in the best long-term interest of Wells Fargo,” said Wells Fargo Board Chair Betsy Duke. “His decision, and today’s announcement, reflect that commitment and his belief that a new CEO at this time will best position the Company for success.”

Scandals abound

Sloan’s departure from the company follows years of hardship at Wells Fargo, which has found itself at the center of several high-profile scandals..

Back in 2016, the bank admitted that its employees had opened millions of accounts in customer’s names without their knowledge or consent. Over the next two years, the company would also face charges related to wrongful home foreclosures, hidden auto loan insurance policies, and various investigations brought by all 50 U.S. states.

In response to Sloan’s retirement, consumer watchdog Allied Progress said that the move was a necessary one. However, the group says Wells Fargo has a long way to go to make up for its past transgressions.

“While this is certainly good news for consumers after so many bad headlines about ongoing abuses at Wells Fargo, let’s be clear: the culture of greed at Wells Fargo and other major banks goes beyond one CEO,” the group said in an emailed statement to ConsumerAffairs.

“Sloan stepping aside won’t magically solve what are obviously deep, systemic problems within these institutions that continue to test regulators and see what they can get away with.”

If you’re the type of parent who likes to block walkways with your child’s massive stroller while smoking a vape pen at Disneyland, get prepared to make some changes.

Disney announced yesterday that smoking, vaping, and oversized strollers will be banned from its parks in California and Florida starting May 1.

The parks will no longer have designated smoking areas, meaning that smokers will have to partake outside the gates. As for strollers, Disney says that the devices must be no wider than 31 inches and no longer than 52 inches. Stroller wagons are also prohibited. If a parent’s stroller does not comply, they can rent one from the park for $15.

Disney enthusiasts say that the new rules seem reasonable.

"Restricting stroller size and prohibiting wagon strollers will, hopefully, eliminate the traffic problems they can cause -- blocking walkways, bumping into guests (especially the little ones) and taking up space in queues and elsewhere," the editor of one Disney fan site told CNN.

People flying on major airlines made 681 charges in January about mishandled wheelchairs or scooters, according to new disclosures that the airline industry made to the Department of Transportation (DOT).

Federal regulations have long required that airlines publicly disclose lost luggage, injured or killed pets, and on-time performance on a monthly basis. But charges of lost or damaged custom wheelchairs, which airlines often stow away in the cargo hold of planes, weren’t part of those reporting requirements until recently.

In December, changes made by the Obama administration to address wheelchair grievances from fliers finally went into effect.

Newly released figures from the DOT show that passengers made 701 wheelchair grievances in December and 681 grievances in January, the most recent month for which data is available.

American Airlines receives most gripes

In January, American Airlines received 167 grievances related to mishandled wheelchairs, out of a total of 2,835 wheelchairs it transported. That represents a gripe rate of 5.89 percent, the highest among major airlines.

The figure is slightly better than December, when American Airlines reported a rate of 7.22 percent.

“Our goal is to ensure customers of all abilities have a positive travel experience and we strive to do better every day,” American Airlines spokesman Shannon Gilson tells ConsumerAffairs in a statement. “We’ve taken a number of steps to meet the new reporting requirements and continue to improve our processes to ensure our team members have the tools they need to properly handle and track wheelchairs and assistive devices.”

Southwest Airlines came in second for wheelchair mishandling problems in January, with 4.09 percent of fliers who traveled with wheelchairs or scooters reporting a problem.

Delta had the lowest rate, reporting only 107 gripes out of 12,670 wheelchairs or scooters it transported.

Wheelchair users say that air travel has become more difficult for the disabled in an era of shrinking seats and overbooking. One recent government audit found that disability-related issues on airlines doubled between 2005 and 2015.

Lyft beat Uber to the punch in heading into the initial public offering (IPO) process. In a press release on Thursday, the second-largest ride-hailing service announced that the pricing of its IPO would be $72.00 per share. Lyft said it sold 32.5 million shares.

The company commenced trading shares on Friday under the "LYFT" ticker symbol. CNBC reported that the stock held at around $87 in its first few minutes of trading, more than 20 percent above its IPO price but “modest” for such a large tech company.

“Appetite for the stock was strong though, with more than 6 million shares traded at the open. More than 19 million shares had been traded as of noon in New York, about 15 minutes after the debut,” CNBC said.

Lyft’s early performance on Wall Street gives it a valuation of $25 billion, which will be supported by around $2.4 billion in new capital.

Uber is expected to go public in April and could see a valuation of up to $120 billion. Lyft and Uber each filed for their respective initial public offerings on the same day in December.  

The coming year has been dubbed “the year of the IPO,” as several other big companies are expected to go public, including Pinterest, Slack, and Postmates.

“It feels like it’s going to be real exciting here for the next couple of months” Barrett Daniels, national IPO services leader at Deloitte & Touche, told Fortune. “It’s going to be a historic year.”

In a civil suit filed Thursday, New York state Attorney General Letitia James accused eight members of the Sackler family, owners of Purdue Pharma, of triggering and then profiting off the U.S. opioid epidemic through their marketing of Oxycontin, a highly addictive painkiller.

"Simply put, they put profit over patients," New York Attorney General Letitia James said at a press conference on Thursday in Manhattan. The Sacklers "literally profited off the suffering, the death” of New Yorkers and others around the U.S., she said.

"This lawsuit contains detailed allegations about the Sackler family and their attempt to hide the vast fortunes they collected at the expense of actual lives," she added.

The opioid epidemic has killed more than 200,000 Americans over the last two decades, according to the Centers for Disease Control and Prevention (CDC). Meanwhile, the Sackler family is estimated to have amassed as much as $13 billion, according to Forbes.

Sacklers, Purdue deny claims

The 250-page lawsuit is an amended version of a suit filed last year, which accused Purdue of fraud and deceptive marketing about the risks of opioids.

"This is an extensive lawsuit that leaves no stone unturned. This lawsuit breaks new ground,” James said. In the new lawsuit, the NY AG accused Purdue of having “tipped the first domino.”

"The others quickly went in on the scheme to expand the opioids market through a predatory campaign of lies, payoffs and high-pressure sales tactics,” she said.

Purdue officials countered by saying that OxyContin makes up less than 2 percent of all opioid prescriptions in the U.S.

"Such serious allegations demand clear evidence linking the conduct alleged to the harm described, but we believe the state fails to show such causation and offers little evidence to support its sweeping legal claims," the company said in a statement.

The Sackler family denied the claims and called the lawsuit “baseless.”

"Expanding this baseless lawsuit to include former directors of Purdue Pharma is a misguided attempt to place blame where it does not belong for a complex public health crisis," the family said in a statement. "We strongly deny these allegations, which are inconsistent with the factual record, and will vigorously defend against them."

The latest lawsuit joins thousands of others filed by state and local governments which accuse Purdue Pharma of fueling the opioid epidemic. Just a few days ago, Purdue and the Sacklers reached a $270 million settlement with the state of Oklahoma.

Gasoline prices jumped by 10 cents or more a gallon in several states in the last seven days as rising oil prices and cuts in gasoline production have reduced supplies. But prices are still about the same as they were at this time last year.

The AAA Fuel Gauge Survey shows the national average price of regular gasoline is $2.69 a gallon, up eight cents from a week ago.

The average price of premium gas is $3.22 a gallon, up a dime from last Friday. The price of diesel fuel is $3.02, only a penny higher than last week.

The price at the pump went up in nearly every state but the biggest increase was in California, where the statewide average rose 17 cents a gallon, mainly due to refinery issues. The average price is up 12 cents in Ohio and 11 cents in Illinois.

Despite the higher prices consumers appear undeterred. The latest AAA Gas Price Survey found a third of consumers will probably take a road trip this summer with 27 percent suggesting they would take a longer trip than they did last year.

The states with the most expensive regular gas

These states currently have the highest prices for regular gas, according to the AAA Fuel Gauge Survey:

• California ($3.56)

• Hawaii ($3.42)

• Washington ($3.12)

• Oregon ($3.02)

• Nevada ($2.93)

• Alaska ($2.90)

• Pennsylvania ($2.80)

• Michigan ($2.82)

• Illinois ($2.83)

• Florida ($2.76)

The states with the cheapest regular gas

The survey found these states currently have the lowest prices for regular gas:

• Utah ($2.37)

• Alabama ($2.41)

• Arkansas ($2.42)

• Mississippi ($2.43)

• Virginia ($2.44)

• Louisiana ($2.45)

• South Carolina ($2.45)

• Oklahoma ($2.46)

• Wyoming ($2.46)

• Texas ($2.47)

Daimler Trucks announced on Friday that it is taking a majority stake in U.S. autonomous vehicle technology firm, Torc Robotics. Daimler’s investment will pave the way for the companies to work on the development of highly automated Level 4 trucks.

"With the ever rising demand for road transportation, not the least through e-commerce, there is a strong business case for self-driving trucks in the U.S.," said Michael Fleming, CEO of Torc.

In a statement announcing the deal, Roger Nielsen, CEO of Daimler Trucks North America (DTNA), praised Torc’s “practical approach to commercialization,” its years of experience, and its “advanced, road-ready technology.” Torc has been developing autonomous vehicle technology for over a decade.

“Torc's Level 4 system has been shown to operate well for both urban and highway driving in rain, snow, fog, and sunshine," Nielsen said.

A Daimler executive said the companies “complement each other perfectly in terms of resources, expertise and skill sets.”

“Together, we will provide a sustainable way for our customers to meet the ever-growing freight demand and benefit both the economy and society,” said Martin Daum, head of Daimler’s global truck and bus division.

Neither company disclosed specific financial terms of the investment. The companies did say that Torc will retain its name, as well as its headquarters in Blacksburg, Va. The acquisition will move forward following approval by U.S. regulators.

General Motors is recalling five model year 2019 Cadillac CT6 vehicles.

Rotation of the steering wheel does not automatically cancel the turn-signals from flashing.

If the turn-signals do not automatically deactivate, the driver may fail to turn them off manually. An erroneous active turn-signal may mislead pedestrians and other drivers, increasing the risk of a crash.

What to do

GM has notified owners, and dealers will replace the turn-signal switch.

The recall began March 11, 2019.

Owners may contact Cadillac customer service at 1-800-458-8006. The Cadillac number for this recall is N182207090.

Buckle up, folks. The online travel agency business is about to experience some possible turbulence.

Anyone who’s surfed the web looking for vacation ideas knows all too well that there’s plenty of companies waiting for the consumer’s mouse-click to go in their favor. Airlines, hotels, bed and breakfasts, cruise lines, automobile rental companies, and others are at each other’s throats trying to lure their share of the nearly 600 million consumers who book some sort of travel-related aspect online.

Why? Because the grass is very green on the travel playing field. Expedia -- which owns Hotels.com, Orbitz, CheapTickets, Travelocity, Hotwire and others -- pulled in $11 billion in 2018. Bookings.com -- the umbrella for Kayak, Priceline, and others -- also posted $11 billion last year.

Now, the most feared elephant in any online business’ room -- Google -- has entered the vacation rental fray. On Wednesday, the company announced that it, too, is launching a platform where consumers can see and book vacation rentals as part of Google Hotel Search.

“You can narrow your search with price and amenity filters, plus browse photos, read reviews and see rates and availability of the vacation rental property,” wrote Pratip Banerji, Google’s Travel Product Manager.

Here we go!

“It's game-on in the alternative accommodations market,” Dennis Schaal, the executive editor at travel news and research site Skift told ConsumerAffairs.

“Google will certainly be on the rise in the sector, and because of its footprint, could definitely take market share away from Airbnb, which is apparently seeing its growth already slow in some of its biggest markets.”

If Schaal is right, Google’s entrance will either make Airbnb stronger or force it to find a vacation rental pocket that Google doesn’t have its hand in, yet. Nonetheless, the goal of taking market share away from Airbnb can have a handsome payoff for Google. Since Airbnb started up some 10 years ago, it’s notched 500 million guest arrivals and a market valuation of over $30 billion.

Going for the win-win

If you’re asking if Airbnb will take a hit, won’t others in the sector like HomeAway and VRBO take one, too?

Yes and no. Google knows it could be foolhardy to take this on solo, so it’s setting its sights on being a friendly elephant in the room by taking the aggregator route, where it will partner with other travel planning stalwarts like Expedia, HomeAway, Hotels.com, NextPax, RedAwning, Rentals United, TripAdvisor, and VRBO.

As they say, a rising tide lifts all boats. Google will make a tidy commission off of getting consumers to those sites and, in turn, those sites will presumably be happy about cutting Google in on the action for doing that.

Plus, on the marketing end, Google’s partners aren’t really losing much, if anything. When a traveler clicks “Book,” they’re transported to the travel partner’s page to complete their transaction, and all property information and bookings are provided and done by those travel partners.

Schaal says not to rush to judgment on Airbnb’s place in the food chain.

“Although Airbnb isn't participating yet in Google's new vacation rentals' offering, Airbnb certainly could choose to participate in the future, bidding for placement like (Google’s other partners) in Google's vacation rentals' product,” he said.

Preparing for a shakeout

A shift this seismic will certainly produce changes and adjustments consumers will notice when making travel plans.

Expedia, for another, also had a big announcement on Wednesday. Its VRBO (Vacation Rentals by Owner) brand rolled out two sizeable changes. One is that the company wants to now be known as “Vrbo” -- as if it’s “ver-boh.”

The second is a new collaborative tool that allows travelers to create their own Trip Boards to like and save their favorite properties in one place. This will let consumers share travel plans with others in their travel group, ask for feedback, and vote on the ones they like best.

Seems like a smart move. According to Vrbo data, 86 percent of U.S. travelers ask others for advice when planning a trip.

“With app push notifications, each person can choose to be notified about votes or comments right away, making it easier and faster to choose the best place for everyone,” the company said in a news release. “Virtual tours are another way technology helps Vrbo customers find a perfect match. Currently,15,000 360-degree virtual walkthroughs bring homes to life for travelers before they book, with more tours quickly being added.”

Schaal predicts consumers might also see some movement from Booking.com as it maneuvers the playing field, trying to maintain its connection with 1,334,878 active properties in 225 countries.

“Don't count out Booking.com in this discussion of Google versus Airbnb,” he said. “Booking.com is a very capable company and offers nearly as many alternative accommodations as Airbnb although Booking.com, which is the dominant online travel agency player in Europe, often gets left out of the conversation. You will be hearing a lot more about Booking.com in this sector.”

On Wednesday, Boeing revealed a series of steps it is taking to make its 737 Max airplanes safer. Among the changes are software updates to the aircrafts’ Maneuvering Characteristics Augmentation System (MCAS), new flight control displays, and additional training for pilots.

Below is a list of the additional layers of protection that Boeing is rolling out:

• Flight control systems will now compare inputs from both angle of attack (AOA) sensors on the outside of planes. If the sensors disagree by 5.5 degrees or more with the flaps retracted, MCAS will not activate. An indicator on the flight deck display will alert pilots.

• If MCAS is activated in non-normal conditions, it will provide one input for each elevated AOA event.

• MCAS can never command more stabilizer input than can be counteracted by the flight crew pulling back on the column. The pilots will continue to always have the ability to override MCAS and manually control the airplane.

The software updates are meant to stop planes from unexpectedly nose diving when the AOA sensors detect too steep of an angle of ascent. Experts have speculated that this issue is what led to the crash of an Ethiopian Airlines flight earlier this month and a Lion Air crash that occurred in October.

Improving safety

The new safety updates provide a much-needed reprieve for Boeing, which has faced backlash in recent weeks. In addition to the two fatal crashes, one Boeing 737 Max aircraft was forced to make an emergency landing earlier this week due to an engine problem.

CNBC reports that news of the updates caused a 1 percent jump in the company’s stock in yesterday’s trading. The company is assuring the public that the steps it has taken are in coordination with airline regulators.

“The software was put through hundreds of hours of analysis, laboratory testing, verification in a simulator and two test flights, including an in-flight certification test with Federal Aviation Administration (FAA) representatives on board as observers,” the company said.

“These updates reduce the crew’s workload in non-normal flight situations and prevent erroneous data from causing MCAS activation. We continue to work with the FAA and other regulatory agencies on the certification of the software update.”

The Federal Trade Commission (FTC) has announced a settlement with Office Depot for allegedly tricking consumers into paying for virus scans that they did not need.

Office Depot -- along with software supplier Support.com Inc. -- will pay a total of $35 million to the agency. Regulators charge that the companies deceptively claimed that consumers’ computers contained viruses and malware in order to charge for computer repair and technical services.

“Consumers have a hard enough time protecting their computers from malware, viruses, and other threats. This case should send a strong message to companies that they will face stiff consequences if they use deception to trick consumers into buying costly services they may not need,” said FTC Chairman Joe Simons.

Tricking consumers

The FTC’s original complaint claimed that Office Depot and Support.com Inc. sold technical support services for nearly a decade by using a program called PC Health Check to “diagnose” consumers’ computers. The software was marketed as a simple check-up tool that would improve computer performance and scan for any internal threats.

However, the agency says the program was merely a sales tool and that the results of the scan were based off of a series of four questions asked to consumers by the software. If consumers answered “yes” to any of a series of four questions -- which included queries about computer speeds, virus warnings, computer crashes, and pop-up ads -- then the scan came back with flags for malware or viruses.

Back in 2012, one OfficeMax employee complained to corporate management that the program was deceiving consumers. “I cannot justify lying to a customer or being TRICKED into lying to them for our store to make a few extra dollars,” the FTC cited the employee as saying.

In addition to the monetary settlement, the agreement bars Office Depot from making any future misrepresentations about the security or performance of consumers’ electronic devices. The company is required to make sure all future software providers it works with also maintains those standards.

Edwin Hardeman was awarded $80 million by a federal jury in California after members determined that Monsanto’s Roundup weedkiller played a primary role in the development of his non-Hodgkin’s lymphoma.

The monetary decision was part of the second phase of a trial in San Francisco, which sought to determine what damages Hardeman would be able to claim. The first phase of the trial took place earlier this month.

In response to the decision, Monsanto’s parent company Bayer released a statement expressing its dismay at the jury’s conclusion.

“We are disappointed with the jury’s decision, but this verdict does not change the weight of over four decades of extensive science and the conclusions of regulators worldwide that support the safety of our glyphosate-based herbicides and that they are not carcinogenic,” the company said.

“The verdict in this trial has no impact on future cases and trials, as each one hsa its own factual and legal circumstances. Bayer will appeal this verdict.”

Corporate malfeasance

On the opposite side, Hardeman’s lawyers said that the jury’s decision is a positive step towards holding Monsanto accountable for its products, which may have harmed numerous consumers.

“It is clear from Monsanto’s actions that it does not care whether Roundup causes cancer, focusing instead on manipulating public opinion and undermining anyone who raises genuine and legitimate concerns about Roundup,” the law firm representing Hardeman said.

“Today, the jury resoundingly held Monsanto accountable for its 40 years of corporate malfeasance and sent a message to Monsanto that it needs to change the way it does business.”

The judgment in favor of Hardeman represents the second major legal victory for plaintiffs seeking to sue Monsanto over its Roundup product. Late last year, consumer Dewayne Johnson accepted a reduced award of $78 million after a jury decided that Roundup had caused his cancer as well.

As technology for self-driving cars advances, experts in the field are working to ensure the safety of all involved.

Most recently, researchers discovered a new simulator that would make self-driving vehicles safer before they’re ever tested on the road.

“This work represents a new simulation paradigm in which we can test the reliability and safety of automatic driving technology before we deploy it on real cars and test it on the highway and city roads,” said researcher Dinesh Manocha.

Getting safer from the start

The researchers’ new technology is known as AADS: Augmented Autonomous Driving Simulation.

To be most effective, the simulator mimics real life, analyzing the motion of pedestrians, other cars, and other real-world interferences that could come up during the driving experience.

AADS is different from past simulators in that it uses a combination of videos, pictures, and lidar-point clouds. The system also predicts the trajectory of pedestrians, bikes, and cars to determine the safest path for the vehicle to take.

“We are rendering and simulating the real world visually, using videos and photos, but we’re also capturing real behavior and patterns of movement,” said Manocha. “The way humans drive is not easy to capture by mathematical models and laws of physics. So, we extracted data about real trajectories from all the video we had available, and we modeled driving behaviors using social science methodologies. This data-driven approach has given us a much more realistic and beneficial traffic simulator.”

One of the group’s primary challenges was ensuring that the software captured every potential scenario -- even those that weren’t recorded using the video recording or lidar sensor. However, the researchers persevered, recreating realistic possibilities on the road into several images.

Manocha and his team hope automotive companies are inspired to utilize these findings when they work on their own self-driving car tests.

“Because we’re using real-world video and real-world movements, our perception module has more accurate information than previous methods,” Manocha said. “And then, because of the realism of the simulator, we can better evaluate navigation strategies of an autonomous driving system.”

To see AADS in action, click here.

Previous cause for concern

Manocha and his team join another group of researchers who are looking to make the self-driving car world safer for consumers. The team utilized video technology that allowed their system to predict movement and then assess the prediction for accuracy.

Despite steps in the right direction, the self-driving car industry has been under fire in recent years, as many companies -- Uber in particular -- have been at the head of controversy.

After a woman in Phoenix was killed at the hands of one of Uber’s self-driving cars, the rideshare company put a pin in the city’s self-driving car operation. While the company also closed its doors in Pittsburgh, it did vow that its self-driving cars were ready for the roads, and has begun the process of reapplying to test the vehicles in Pittsburgh.

The U.S. Department of Housing and Urban Development (HUD) on Thursday announced that it’s charging Facebook with “discrimination” in its advertising practices for housing.

In a complaint, HUD accused the company of violating the Fair Housing Act by "encouraging, enabling and causing" discrimination by excluding certain users from viewing housing ads on the platform.

The group charges that Facebook willfully allowed advertisers to exclude people from seeing housing ads based on their neighborhood, interests, religion, race, and color, including whether they were “classified as parents, non-American-born, non-Christian, interested in accessibility, interested in Hispanic culture, or a wide variety of other interests that closely align with the Fair Housing Act’s protected classes.”

“The Charge concludes that by grouping users who have similar attributes and behaviors (unrelated to housing) and presuming a shared interest or disinterest in housing-related advertisements, Facebook’s mechanisms function just like an advertiser who intentionally targets or excludes users based on their protected class,” HUD said in a statement.

Accused of audience-targeting

Last March, the National Fair Housing Alliance (NFHA) and three of its member groups sued Facebook over the same issue. The suit alleged that Facebook allowed landlords and real estate brokers to exclude certain groups from viewing advertisements for housing, despite being warned that targeting housing ads in this manner may violate fair housing laws.

In a statement, Facebook said it was “surprised” by HUD’s decision. A company spokesperson noted that Facebook has been “working with them to address their concerns and have taken significant steps to prevent ads discrimination.”

“Last year we eliminated thousands of targeting options that could potentially be misused, and just last week we reached historic agreements with the National Fair Housing Alliance, ACLU, and others,” the spokesperson said.

HUD is seeking unspecified damages for any person who was harmed by Facebook’s advertising policies, as well as “the maximum civil penalty” against the company for each violation of housing laws.

“Facebook is discriminating against people based upon who they are and where they live,” HUD Secretary Ben Carson said in a statement. “Using a computer to limit a person’s housing choices can be just as discriminatory as slamming a door in someone’s face.”