Indiana, Maine AGs oppose federal legislation that would weaken Tobacco Control Act

INDIANAPOLIS, Ind. – Indiana Attorney General Greg Zoeller and Maine Attorney General Janet Mills are urging members of the U.S. House of Representatives Committee on Appropriations to oppose current legislation that would weaken the Tobacco Control Act (TCA), specifically as it relates to e-cigarettes and other new tobacco products that have entered the market in recent years.

Zoeller and Mills serve as co-chairs of the National Association of Attorneys General (NAAG) Tobacco Committee.

The proposed legislative change would remove the product review requirements under the TCA for products that have entered the market since Feb. 15, 2007. This would include thousands of electronic cigarette products that have exploded onto the market in recent years.

Under the pre-market review process, manufacturers are required to provide information about new products which allows the Food and Drug Administration (FDA) to make a science-based assessment of the risks of the product, and prevent the sale or place additional restrictions on it if it finds such action “appropriate for the protection of the public health.”

The attorneys general argue in their letter to committee members that the FDA should retain its ability to prevent the sale of a dangerous product, require labeling changes, and restrict marketing in order to help reduce youth usage and protect public health.

“The federal government continues to backpedal on the issue of e-cigarettes and every day more teens are being introduced to nicotine addiction,” Zoeller said. “We have been regulating cigarettes to successfully curb smoking and youth addiction for decades, and yet cannot seem to extend this model to include the latest smoking trends. Government needs to act to protect public health rather than to continue to hide behind the lack of long-term research on e-cigarettes.”

Youth usage of e-cigarettes tripled from 2013 to 2014, according to a 2015 study by the Centers for Disease Control. Last year, there were nearly four thousand calls to poison control centers due to exposure to e-cigarettes, more than double the calls made in 2013.

“Congress should not be providing a complete exemption from such a review, which could allow the continued sale of a dangerous product and undermine the public health of the nation,” the attorneys general said in their letter.

The proposed change is contained in Section 747 of the House Agriculture, Rural Development, Food and Drug Administration, and Related Agencies appropriations bill for Fiscal Year 2016.

This proposal to weaken the TCA comes less than a month after Zoeller and Mills urged the FDA to quickly finalize the deeming regulations that were proposed in April 2014 to add e-cigarettes to the Act so that the products could be regulated similarly to traditional tobacco products.

In October 2013, Zoeller and 40 other state attorneys general sent a letter to the FDA asking that the agency issue proposed rules and begin regulating e-cigarettes. After the proposed deeming regulations were issued, 29 attorneys general filed comments on Aug. 8, 2014, supporting the deeming action and recommending that the regulations be strengthened in several respects. These additional recommendations include banning flavors, prohibiting Internet sales and subjecting e-cigarettes to the same advertising and marketing restrictions as combustible cigarettes.

“Although we urge the FDA to do more than initially proposed in the deeming regulations to protect our youth from the dangers of nicotine, at a minimum, the TCA should not be weakened by removing product review requirements,” the attorneys general said in their letter.

In addition to his role on the NAAG Tobacco Committee and as Indiana’s top consumer protection official, Zoeller serves on the Board of Directors of the Legacy Foundation, a national public health organization dedicated to ending tobacco use in the United States.

A copy of the letter sent on July 7, 2015 is attached.

Zoeller: Agreement targets “zombie debts,” halts collections on 7,000 Indiana consumers

INDIANAPOLIS, Ind. – Indiana Attorney General Greg Zoeller joined attorneys general in 47 states plus the District of Columbia and the U.S. Consumer Financial Protection Bureau today in announcing a $136 million settlement reached with Chase Bank USA N.A. and Chase Bankcard Services Inc., requiring the company to reform its unlawful credit card debt collection practices.

The joint state-federal agreement, through an assurance of voluntary compliance with the states and a separate order with the CFPB, follows an investigation into Chase’s past debt collection practices.

“Chase consistently pursued credit card debt collection cases based on bad information, including cases where the listed debt was the wrong amount, tied to the wrong person, discharged, not eligible to pursue or very old – often called ‘zombie debt,’” Zoeller said. “These wrongful collections significantly harmed consumers in Indiana, causing undue harassment from debt collectors and errors on their credit reports. Now, thousands of Hoosiers will get needed relief and be able to clean up their credit.”

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.” These practices misled consumers and courts and caused consumers to pay false or incorrect debt and incur legal expenses and court fees to defend against invalid or excessive claims.
• Made calculation errors when filing debt collection lawsuits that sometimes resulted in judgments against consumers for incorrect amounts.

Agreement Requires Debt Collection Reforms

The agreement requires Chase to significantly reform its credit card debt collection practices in areas of declarations, collections litigation, debt sales and debt buying. Debt buying involves the sale of debt by creditors or other debt owners, often for pennies on the dollar, to buyers who then attempt to collect the debt at full value or sell it to other buyers.

Among other reforms, the agreement requires new safeguards to help ensure debt information is accurate and that inaccurate data is corrected, provides additional information to consumers who owe debts, and bars Chase’s debt buyers from reselling consumer debts to other purchasers. Previously, initial buyers of Chase’s consumer credit card debt could resell the debt, the subsequent buyer could flip the debt to another buyer, and the process could repeat itself many times over. If initial information about the debt was incorrect or was transmitted with errors to a subsequent debt buyer, that could result in long-term harm to the consumer and leave the consumer with the difficult or even impossible burden of successfully challenging or correcting errors.

Chase suspended its consumer credit card debt sales in 2013 and collections litigation in 2011. In 2012 Chase maintained approximately 64.5 million open accounts with $124 billion in outstanding credit card debt. From 2009-2013, Chase recovered approximately $4.5 billion of debt from defaulted accounts through collection lawsuits, selling defaulted accounts to third-party debt buyers, or both.

Chase to Cease Collecting on 7,000 Indiana Consumers

Chase has agreed to cease all collection efforts on more than 528,000 consumers, including an estimated 7,000 Indiana consumers. Chase sued the affected consumers for credit card debts and obtained judgments between January 1, 2009 and June 30, 2014. Chase will notify affected borrowers of the change and will request all three major credit reporting agencies to not report the judgments.

The agreement also ensures that Chase will fulfill $50 million in consumer restitution through a separate 2013 consent order reached with the Office of the Comptroller of the Currency. Chase estimates that so far it has provided $406,000 in restitution to 400 Indiana consumers.

If Chases’ consumer restitution through the OCC action falls short of $50 million by July 1, 2016, Chase must pay the remaining balance to state attorneys general and the CFPB.

Chase will pay more than $95 million to the 47 participating states and the District of Columbia, an additional $11 million to the executive committee states that conducted the investigation and settlement negotiations, and $30 million to the CFPB.

Debt collectors are bound by state and federal laws, including the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from consumers.

Indiana residents can file complaints against abusive or unfair debt collectors with the Indiana Attorney General’s Office at www.IndianaConsumer.com or by calling 800-382-5516.

Zoeller thanked Deputy Attorney General Tom Irons for his work on this case.