What We Learned From … NAAG’s Director Of The Center For Consumer Protection – Dodd-Frank, Consumer Protection Act

What trends are shaping consumer protection in 2024?

From kids on social media to fake reviews and junk fees, state
AGs are working across state (and partisan) lines on initiatives
that promise to mold the consumer protection landscape for years to
come. In this post, we reflect on our conversation with Todd
Leatherman, who works at the forefront of these issues as Director
of the National Association of Attorneys General (NAAG) Center for
Consumer Protection.

Trend 1 – Protecting America’s Online Youth

For state enforcers, children are top-of-mind, especially when
it comes to social media. A coalition of 33 state AGs filed a federal lawsuit in California alleging Meta
violated state consumer protection laws and the Children’s
Online Privacy Protection Act. The AGs claim that Meta knowingly
designed and deployed addictive and harmful features on its social
media platforms, intentionally addicting children and teens and
misleading the public about whether its services were safe for
younger children. A number of other states have filed similar
lawsuits in state courts including Nevada, which also targeted TikTok
and Snap. These lawsuits are ongoing and will no doubt affect how
social media platforms engage younger consumers.

This year, Oregon AG and NAAG President Ellen Rosenblum chose
her Presidential Initiative as: “America’s Youth: AGs
Looking Out for the Next Generation.” This initiative and
corresponding NAAG Presidential Summit will include
programming on technology, physical health, mental and behavioral
health, and financial literacy.

On the legislative front, we have seen new laws aimed at
protecting young people online. Florida recently passed a law banning social media accounts for
minors under 14 and requiring parental consent for 14 and
15-year-olds. Georgia may soon also require minors under 16
obtain parental consent to create an account, following similar
restrictions passed in Louisiana, Texas, Arkansas (currently enjoined pending
litigation), and Utah. Generals Letitia James of New York and
Rob Bonta of California have also advocated for state legislation
targeting the addictive features of social media. Given the
aforementioned, we expect AGs to tune into emerging issues
affecting children for years to come.

Trend 2 – Big Tech’s Advertising Practices

For years, big tech has been a leading issue for bipartisan
cooperation among state enforcers. Last year, we saw a $700 million settlement with Google and 53
state AGs over the Google Play Store. This led to significant
reforms in Google’s practices, including how consumers access
apps and how payments are processed. Currently, 38 state AGs and the Department of Justice have sued Google over
alleged anti-trust violations, including monopolizing the search
market. The cases were consolidated with closing arguments slated to begin May
1^st.

Since our conversation with Mr. Leatherman, DOJ and 16 other
state attorneys general announced a landmark lawsuit against Apple alleging that it
monopolized the smartphone market. This includes allegations that
Apple intentionally makes it difficult for consumers to switch
cellphones and undermines innovation, among other claims.

Trend 3 – Algorithms and AI

The promise and perils of AI have drawn major focus at AG
offices across the nation and at NAAG, according to Leatherman.
Last year, 54 AGs sent a letter to Congressional leaders encouraging
them to study how AI may lead to child sexual abuse and
exploitation online. Another collation of 26 AGs submitted a comment to the FCC on the use of AI in
robocalls with the FCC later voting to ban robocalls using
AI-generated voices. (Revisit our post on Washington’s new AI
task force here.)

Now, we’re seeing AGs particularly concerned about racial
and gender bias in AI programs used in employment, housing, and
financial lending and services. Enforcers are also looking into the
marketing of AI, including whether companies are overpromising on
what the technology can actually provide. Given how quickly AI is
advancing across sectors, we expect to see more scrutiny in the
months ahead. And stay tuned for additional information on AGs and
AI as our team will be reporting on the NAAG and AGA Southern
Region Meeting on Artificial Intelligence and Preventing Child
Exploitation occurring in April.

Trend 4 – Fake Reviews

Fake reviews, including misleading influencer content, have
drawn AG attention. This year, 22 AGs submitted a letter to the FTC largely
supporting a new rule that would govern and ban fake reviews. That
rulemaking is ongoing.

States, including New York and Washington, have taken individual action
against companies engaged in deceptive review practices. This
includes instructing employees or associates to post positive
reviews, threatening or intimidating consumers who post negative
reviews, or requiring consumers to sign NDAs to receive services.
Notably, states are able to enforce the Consumer Review Fairness
Act, a federal law.

Trend 5 – Automatic Renewals

States continue to enforce their recently enacted automatic
renewal statutes or provisions (for example, laws in California, New York, Washington D.C., and Virginia), which generally impose disclosure
requirements, require that companies obtain affirmative consent
from consumers, and mandate cancellation mechanisms. This includes
requiring an online cancellation option when a consumer signs up
for a service online. That said, states do not necessarily need a
new law to target these practices as their general consumer
protection laws likely apply. AGs may also enforce the federal
Restore Online Shoppers’ Confidence Act.

Trend 6 – Junk Fees

Companies that advertise one price and then tack on fees should
beware. Enforcers are making so-called “junk” or hidden
fees a priority. California has passed a new law governing fees and Massachusetts is in
the process of instating new regulations governing them. Not to be
outdone, the FTC has also
proposed a rule on fees with a virtual hearing to take place in
late April. (This aligns with the Biden administration’s
whole-of-government approach to junk fees with other rulemaking and
guidance out of the FCC, CFPB, HUD, and DOT).

That said, AGs take the position they do not necessarily need
new legislation to target fees. Pennsylvania has led the way in asserting
claims under state consumer protection laws and the Consumer
Financial Protection Act against companies that impose fees.
Similarly, Connecticut and the FTC have joined forces in
litigation against a car dealer that allegedly deceived consumers
about the nature of fees and add-ons. And Washington D.C. has warned restaurants that
service charges could be unlawful if they are not disclosed before
an order is placed.

Trend 7 – Privacy

States continue to pass and enact new privacy laws. Earlier this
year, New Hampshire became the 15^th state
to pass a comprehensive state privacy law and several other privacy
bills are currently making their way through the legislative
process. Many of the new laws will become effective this year
through 2026, spurring enhanced AG interest in privacy matters.

In California, we saw the first investigative sweep in this arena with General
Rob Bonta sending out letters to popular streaming apps and device
companies alleging they failed to comply with California’s new
privacy law. According to the office, the investigation will focus
on opt-out requirements for business that sell or share consumer
personal information.

Trend 8 – Veterans

While veterans have long been a priority for state AGs, the
uptick in businesses offering to “counsel” or support
veterans in applying for government benefits has sparked new AG
activity in this space. Last year, a bipartisan group of 44 AGs sent a letter to Congress urging the body to
pass legislation that further protects veterans in the application
process and the Texas AG’s office sued a company that misled veterans about
their ability to help obtain benefits and charged alleged excessive
fees in the process.

Trend 9 – Health

In the health space, opioid marketing, vaping, and illegal
cannabis products continue to take center stage. While the larger
opioid cases have concluded, litigation is far from over. AGs have
been leading the way in targeting manufacturers, distributers, and
pharmacies that engaged in deceptive marketing tactics around
opioids. We’ve also seen a focus on nicotine and cannabis
products, particularly those that may appeal to children. A group
of 33 AGs sent a letter to the FDA urging more stringent
regulations on electronic nicotine delivery products, including on
the marketing of e-cigarettes and the use of influencers to promote
them. Connecticut and Nebraska have also cracked down on illegal
marketing of cannabis products using their state consumer
protection laws.

Trend 10 – Rapid Response

Many businesses fail to realize how substantial a role AGs play
in emergencies and urgent consumer issues. They face public
pressure to respond to events in real-time. For instance, the
Taylor Swift concert ticket debacle led to more than 2,600 consumer complaints in Pennsylvania
alone.

And, when it comes to a market disruption or natural disaster,
some states have specific price gouging laws that provide state AGs
enforcement authority. These laws vary by state and it can
sometimes be difficult for companies to know when they are in
place. We’ve seen a rise in AGs targeting companies following
emergency situations for increasing prices on consumer staples and
targeting charities that mislead consumers about donations in the
time of crisis.