Consumer Protection

OAKLAND — California Attorney General Rob Bonta today filed an amicus brief in Rosenberg-Wohl v. State Farm Fire and Casualty Co. (State Farm), a case that hinges on whether an Unfair Competition Law (UCL) action filed by a policyholder against their insurance company is subject to the UCL's four-year statute of limitations or the Insurance Code’s one-year limitations period for actions to recover on an insurance policy. The brief, filed in the California Supreme Court, argues that a UCL action is distinct from an action to recover policy benefits, therefore an insurance policy claims period cannot override the four-year statute of limitations that applies to all UCL actions. A contrary decision would hinder consumers’ ability to challenge unlawful, unfair, or fraudulent conduct by insurance companies. 

“We must protect consumers’ right to challenge abusive business practices by insurance companies,” said Attorney General Bonta. “California's Unfair Competition Law protects all 39 million Californians from unlawful, unfair, and fraudulent business practices by any industry, including insurance companies. The lower court got it wrong and if allowed to stand the decision threatens to undermine the broad protections afforded to Californians under the Unfair Competition Law. I urge the California Supreme Court to overturn the erroneous decision.”

California’s UCL prohibits businesses in California from engaging in illegal, unfair, or fraudulent practices in any aspect of their business, and allows California consumers injured by those practices to go to court to protect their rights. The UCL can also be enforced by the Attorney General and district attorneys, as well as by some city attorneys and county counsels.  

The plaintiff in this case filed an insurance claim under their homeowners’ insurance policy with State Farm, which the insurer denied. Roughly a year and a half later, the plaintiff filed a lawsuit against State Farm, alleging that it violated the UCL by engaging in unfair and misleading practices that included failing to properly investigate property insurance claims and failing to provide explanations for claim denials. The plaintiff sought injunctive relief that would require the company to reform its marketing practices and its process for investigating and resolving certain home-insurance claims. The Court of Appeal upheld the dismissal of the plaintiff’s action as untimely, holding that the plaintiff’s UCL claims were subject to the contractual one-year limitations period rather than the UCL’s four-year statute of limitations because they arose from parties’ contractual relationship.

In today’s brief Attorney General Bonta argues that the one-year limitations period set forth in the Insurance Code does not apply to a UCL action, regardless of whether the action relates to an insurance claim. The brief also notes that the Court of Appeal's decision departs from long-standing Supreme Court precedent holding that the UCL’s statute of limitations “admits no exceptions.” 

Attorney General Bonta is committed to upholding Californians’ protections under the UCL:

• In February, Attorney General Bonta sent a letter small banks and credit unions warning that overdraft and returned deposited item fees may violate state and federal consumer protection laws, and urged small financial institutions to eliminate these fees.

• Also in February, Attorney General Bonta filed an amicus brief in Capito v. San Jose Healthcare System, LP, urging the court to clarify when consumers can sue businesses for engaging in fraudulent acts or practices, and to adopt a standard for unfair acts or practices in UCL cases.

• In January 2023, Attorney General Bonta announced a lawsuit against the nation's largest insulin makers and pharmacy benefit managers for driving up the cost of the lifesaving drug through unlawful, unfair, and deceptive business practices in violation of California's consumer protection laws.

•  In September 2022, Attorney General Rob Bonta announced a lawsuit against Amazon alleging that the company stifled competition and caused increased prices across California through anticompetitive contracting practices in violation of California’s consumer protection and antitrust laws.

A copy of the amicus brief can be found here.

OAKLAND — California Attorney General Rob Bonta today issued the following statement applauding the Federal Communication Commission's (FCC) draft order proposing to reestablish federal net neutrality protections and concluding that California’s own net neutrality law is consistent with the proposed rules and should stay on the books. 

“Everyone deserves equal access to the internet,” said Attorney General Bonta. “California has led the way in protecting the open internet since 2018, when we passed Senate Bill 822, the nation’s strongest state net neutrality law. Since then, SB 822 has been instrumental in protecting internet access for California’s 39 million residents. I commend the federal government for moving to reestablish net neutrality rules nationwide and applaud the draft order for acknowledging the important role states like California play in protecting net neutrality.”

Last year, the FCC proposed to reestablish nationwide net neutrality protections, and issued a request for public comment. Attorney General Bonta filed a public comment letter expressing California’s support for strong net neutrality rules for all Americans, but also urging the FCC not to preempt parallel state net neutrality laws like SB 822. In the draft order, the FCC agrees, noting that “California law generally tracks the federal rules we restore today,” and finding “[no] reason at this time to preempt California from independently enforcing” federal or state net neutrality requirements. The FCC is scheduled to vote on the draft order at their next Open Commission Meeting on April 25, 2024.

Net neutrality rules protect consumers by allowing them to access online content without manipulative and anticompetitive interference from internet service providers. In 2018, under the Trump Administration, the FCC repealed federal net neutrality regulations. In response, California and other states enacted their own net neutrality laws to protect residents within their jurisdictions. California passed SB 822 to enshrine net neutrality rules into state law. 

In 2022, consumers paid over $7.7 billion in overdraft fees

OAKLAND — California Attorney General Rob Bonta joined 17 attorneys general in submitting a comment letter supporting the Consumer Financial Protection Bureau’s (CFPB) proposed overdraft fee rule, amending Truth in Lending Act (TILA) regulations. The proposed rule would require large banks to apply consumer protections, include interest rate disclosures, to overdraft fees. In doing so, the proposed rule would close a regulatory loophole that enables banks to extract billions of dollars from consumers by charging overdraft fees without adequately disclosing basic credit terms.

“Overdraft fees are a relic and should be left in the past. These fees harm low-income Californians the most, while lining the pockets of large financial institutions,” said Attorney General Bonta. “The Consumer Financial Protection Bureau's proposed rule would protect consumers' pocketbooks and create more transparency about how overdraft fees are handled in the places where they bank. By closing this archaic loophole, we work toward a California where consumers are treated more equitably and fairly by financial institutions.”

TILA was enacted in 1968 when many families used the mail to send and receive checks and had little certainty about when their deposits and withdrawals would clear. When a bank clears a check and the consumer doesn’t have funds in the account, the bank charges an overdraft fee and in doing so is issuing a loan to cover the difference. The Federal Reserve Board created an exemption to TILA protections if the bank was honoring a check when their depositor inadvertently overdrew their account. At the time, this was used infrequently and resulted in a small cost for consumers. It was not a major profit driver.

This exception no longer serves its original purpose given the automation of overdraft pay, prevalence of debit card transactions as an alternative to checks, and drastically increased amount of overdraft fees. Approximately 23 million households pay overdraft fees in any given year. Banks usually charge $35 for an overdraft, most of which are repaid within three days—representing an annual percentage rate (APR) of approximately 17,000%. An APR is the yearly rate charged for a loan or earned by an investment and includes interest and fees. Typically, personal loan APRs are from 6% to 36%. In 2022, consumers paid over $7.7 billion in overdraft and non sufficient fund fees.

In the letter, the attorneys general endorse the proposed rule and request that the CFPB set the benchmark overdraft fee at $3, which would not trigger TILA disclosures and reduce overdraft fees for consumers. The attorneys general also urge the CFPB to consider expanding the proposed rule to small financial institutions given that many are among the most frequent chargers of costly overdraft fees.

In submitting the letter, Attorney General Bonta joins the attorneys general of New York, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, North Carolina, Oregon, Pennsylvania, Washington, and the District of Columbia.

Attorney General Bonta is committed to protecting consumers from hidden fees, and ensuring consumer financial protection though enforcement action, consumer outreach, and sponsoring legislation. 

• Earlier this month, Attorney General Bonta issued a consumer alert with tips on filing and preparing taxes safely. 
• Also this month, Attorney General Bonta joined Senator Monique Limón (D- Santa Barbara) and a coalition of prominent consumer advocacy organizations in unveiling Senate Bill 1061, legislation seeking to protect consumers from having their credit ruined by prohibiting medical debt from being reported on credit reports.
• In February, Attorney General Bonta sent a letter small banks and credit unions warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law and the federal Consumer Financial Protection Act, and urged small financial institutions to eliminate these fees. 
• Also in February, Attorney General Bonta supported the Federal Trade Commission’s new “Rule on Unfair or Deceptive Fees,” which would ban hidden fees nationwide.
• Last year, Attorney General Bonta and the California Low-Income Consumer Coalition co-sponsored Senate Bill 478 (SB 478), which combats hidden fees by requiring the advertised, displayed, or offered price of goods or services to include all mandatory fees, other than tax and shipping. SB 478 was signed by Governor Newsom in October and will take effect on July 1, 2024.

A copy of the letter is available here.

OAKLAND — California Attorney General Rob Bonta today issued a consumer alert with tips on filing and preparing taxes safely. As Tax Day approaches, many Californians may seek out assistance with filing their state and federal tax returns. To avoid falling victim to a tax-related scam, Attorney General Bonta advises Californians to file early, take actions to protect themselves online, and learn about free or low-cost tax filing opportunities. Through the IRS Direct File pilot program, eligible California taxpayers can file their 2023 federal taxes directly with the IRS for free.

“For working families, tax season serves as a long-awaited opportunity to get ahead on bills, make needed home repairs, or finally start planning a vacation,” said Attorney General Bonta. “This Tax Season, we want to make sure Californians don’t fall victim to tax-related fraud or scams. I encourage Californians to review our website for tools, tips, and resources to make filing taxes easier and safer at oag.ca.gov/consumers. And if you believe you are the victim of a tax-related scam, report it at oag.ca.gov/report.”

How to Protect Yourself from Tax Scams:

• File early — You are less vulnerable to scammers if you file early and have your refund in hand. Avoid putting yourself at risk of being the next victim and file your taxes as early as possible. 

• Hang up the phone! — IRS and FTB will only call a person who owes taxes if they have tried to contact you by mail. Legitimate IRS and FTB agents will not threaten jail time or seek payment over the phone or through a wire transfer. Consumers should not make any payments and should contact the agency directly by looking up government contact information online. Calls impersonating the IRS should be reported to the Treasury Inspector General for Tax Administration (TIGTA). Those impersonating the FTB should be reported here.  

• Do NOT open the email — Never open an email or text message that says it is from the IRS or the FTB. The IRS and FTB do not use email, text message, or social media to request personal or financial information or to send notice regarding audits or refunds. Replying to the email, opening attachments, or clicking on links may enable scammers to collect your personal information or infect your computer with viruses or other malware.

• Think beyond the password — For greater security, get an Identity Protection PIN (IP PIN) for your e-filing account with the IRS. A new PIN is provided each year by the IRS. 

• Use two-step authentication — Check on the availability of two-step authentication to protect your tax filing accounts (and other online accounts containing sensitive information, such as your email and social media accounts). Two-step authentication adds a second factor, such as a one-time use code that is sent to you by email, phone, or text. You enter that code, along with your username and password, to get access to your account.

Tax Preparation Resources:

You may qualify for free help! Many consumers turn to third-party tax preparation services for help filing their tax returns. Attorney General Bonta encourages consumers to find out if they qualify for free tax help.

• IRS Direct File pilot program — Using the first-of-its-kind pilot program, eligible California taxpayers can file their 2023 federal taxes directly with the IRS for free. To see if you qualify for this program, check here.

• FTB CalFile — The FTB’s CalFile program allows qualified individuals to quickly e-file their state tax return directly to the FTB, free of charge. To see if you qualify, check here.  

• VITA/TCE — The IRS Volunteer Income Tax Assistance program provides free tax help to people who make $64,000 or less annually, persons with disabilities, and people who do not understand English well. The Tax Counseling for the Elderly program offers free tax help for all taxpayers, particularly those over 60, specializing in questions about pensions and retirement-related issues. More information on these programs is available here.

Quick Tip! You may qualify for cash back or a reduction of the tax you owe under the Earned Income Tax Credit and the California Earned Income Tax Credit programs. Check to see if you qualify for one or both!

Need more time to prepare? You can also use IRS Free File to electronically request an automatic tax-filing extension, regardless of your income. You will then have until October 15 to file a return. More information on how to request an extension can be found on the IRS website.

Find a reputable tax preparer. Make sure your tax preparer is reputable and qualified to provide tax services. In California, only an attorney, certified public accountant (CPA), IRS-enrolled agent, or registered-tax preparer can prepare tax returns for a fee. To confirm whether a tax preparer is registered with the IRS, check here. 

If you believe you have been the victim of a tax-related scam or other misconduct, you can file a complaint with our office at oag.ca.gov/report or with the IRS. 

To learn about how to protect yourself and your loved ones against fraud, visit our website at oag.ca.gov/consumers.

LOS ANGELES — California Attorney General Rob Bonta today, alongside the U.S. Department of Justice (U.S. DOJ), and a bipartisan coalition of 16 states attorneys general, filed a lawsuit challenging Apple’s anticompetitive behavior related to iPhone smartphones. The lawsuit alleges Apple deliberately made it more difficult for third-party apps and products to operate with the iPhone, resulting in higher prices for consumers and harm to competition in the smartphone industry. Apple’s conduct has stifled innovation, limited consumer choice, and made switching to other smartphones — especially high-end performance smartphones — unnecessarily difficult and expensive for consumers.

“Apple’s anticompetitive conduct intentionally leaves consumers bearing the cost of sky-high smartphone prices at a time when smartphones are now essential to so much of our day-to-day lives. California’s economy thrives on entrepreneurship, serving as a driving force behind its innovation and growth. Consumers, innovation, and the competitive process — not Apple alone — should decide what options consumers should have,” said Attorney General Bonta. “In insulating itself from competition, Apple has caused harm to consumers and the market. This is illegal. I am proud to partner with the U.S. Department of Justice to send a clear message: We are committed to protecting consumers, holding industry accountable, and ensuring a fair and competitive market where the next generation of innovation can thrive.”

The lawsuit alleges Apple violated Section 2 of the Sherman Antitrust Act, which prohibits monopolization and attempted monopolization. Monopolization occurs when a single firm maintains a monopoly unlawfully, by using its control of the market to exclude rivals and harm competition. The complaint filed today alleges that Apple protects its monopoly by delaying, degrading, or outright blocking technologies that would bring competition by decreasing barriers to switching to another smartphone. 

Specifically, Apple:

• Degrades and undermines cross-platform messaging apps and rival smartphones, including introducing deliberate incompatibilities to prevent Android users from seamlessly sending messages to iPhone users.

• Makes it difficult for U.S. app developers to list “Super Apps”, which have a broad array of functions and make it easier for consumers to switch from one phone manufacturer to another 

• Blocks cloud gaming services on iPhones by historically refusing to list cloud gaming apps on the Apple App Store. Cloud gaming allows consumers to stream and play video games seamlessly across different devices independent of phone hardware.  

• Limits basic functionality when consumers try to use third party cross-platform smart watches with iPhones.

• Restricts digital wallet competitors by allowing only Apple Wallet access to the iPhone’s “tap-to-pay” functionality.

Apple suppresses or delays apps, innovations, and technologies that would reduce switching costs or simply allow users to discover, purchase, and use their own accessories, apps and content without having to rely on Apple. As a result, Apple faces less competition from rival smartphones and less competitive pressure from innovative, cross-platform technologies not because Apple makes its own products better but because it makes other products worse. With less competition, Apple extracts extraordinary profits and constrains innovation to serve its interests. This leaves all smartphone users worse off, with fewer choices, higher prices and fees, lower quality apps, and accessories, and less technological progress from Apple and others.

In filing the lawsuit, Attorney General Bonta joins the U.S. Department of Justice and the attorneys general of Arizona, Connecticut, Maine, Michigan, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Oklahoma, Oregon, Tennessee, Vermont, Wisconsin, and the District of Columbia.

Attorney General Bonta is committed to enforcing anticompetitive laws to ensure fair prices, innovation, and consumer choice.

In February 2024, Attorney General Bonta, the Federal Trade Commission, and a bipartisan coalition of states, announced filing a lawsuit that challenges the proposed merger of Kroger and Albertsons; this merger presents a significant risk of reduced competition and higher food prices nationwide. In December 2023, Attorney General Bonta announced a $700 million multistate settlement with Google resolving allegations that the company violated state and federal laws by monopolizing the Android smartphone application market. In November 2023, Attorney General Bonta and three other attorneys general announced joining U.S. DOJ’s lawsuit against Agri Stats, Inc., a company that organizes and manages anticompetitive information exchanges for meat processors and facilitated the unlawful increase of chicken, pork, and turkey prices across the U.S.

A copy of the complaint is available here.

California Attorney General Rob Bonta and New York Attorney General Letitia James last week published an op-ed in USA Today, excerpted below, highlighting legislation sponsored by the California Department of Justice.

By Attorney General Rob Bonta and Attorney General Letitia James:

As state attorney generals, we have two primary duties: defending our states’ laws and interests, and protecting the rights and well-being of the people we were elected to serve. When Americans across the country faced urgent and powerful threats to their health, safety and prosperity, attorneys general across the nation have stood together to take them on. Now, as a mental health crisis exacerbated by social media giants seeking to addict and commodify the attention of children grows worse and worse each year, it’s time to take collective action again. 

We will not stand by and watch an arms race among social media mega-corporations over who can best profit from our children’s pain and addiction. That is why we are using every tool at our disposal to fight back against these pernicious practices: from the courthouse to the statehouse.  That is why we are also championing legislation in our respective states to crack down on addictive feeds and safeguard against the collection and sale of children’s personal information.

Curbing the excesses of some of the world’s most powerful and influential companies will not be easy. But the formative mental health of a generation is at stake, and we cannot afford to stand idly by and not respond. We’ve stepped up before as attorneys general to address a rising threat to the health and safety of our constituents. With the support and courage of our colleagues in our states’ legislatures, we know that we will succeed, and that children will finally be protected against the most insidious harms of social media. 

To read the op-ed in its entirety please see here.

To learn more about California’s legislation please see here.

Updates to COPPA need to go further to protect children’s online data 

OAKLAND — California Attorney General Rob Bonta today, in response to the Federal Trade Comission's (FTC) notice of proposed rulemaking, joined a bipartisan multistate letter to the FTC proposing updates to regulations implementing the Children’s Online Privacy Protection Act (COPPA). In the letter, the attorneys general express support for updates to COPPA and advocate for further clarity and specification for proposed rules.

“The Federal Trade Commission’s proposed rule would strengthen our ability to enforce restrictions on companies selling children’s data and protect consumers who seek to manage what information websites can collect from kids,” said Attorney General Bonta. “Together with a broad bipartisan coalition from across the country, I support this effort and look forward to working collaboratively with the FTC to keep protecting children’s privacy.”

COPPA requires operators of websites and online services that are either directed to children under 13, or that have actual knowledge that they are collecting personal information from children under 13, to provide notice to parents and obtain parental consent before collecting, using, or disclosing personal information from children. 

The proposed rule would update COPPA by:

• Requiring separate “opt-in” consent for targeted advertising: The proposed new rule would require separate notice and parental consent before an operator can disclose children’s information to third parties, including third-party advertisers.
• Clarifying the “mixed audience” category:  There currently is ambiguity about when child-directed websites must provide COPPA protections to all users and when they may screen users for age and only provide COPPA protections to users who self-identify as under 13 years old. The FTC proposes to clarify this distinction by providing a new definition of “mixed audience."
• Adding “biometric identifiers” to the definition of “personal information”: The FTC proposes to expand the definition of “personal information” under COPPA to include biometric identifiers, like fingerprints or handprints, retina and iris patterns, genetic data, or data derived from voice, gait, or facial data.
• Limits on the “support for the internal operations” exception: Operators may currently collect persistent identifiers without first obtaining parental consent under an exception that permits “support for the internal operations of the website or online service.” The FTC proposes adding new requirements and disclosures for operators who rely on this exception.
• New limits on nudging kids to stay online: The FTC proposes adding new limitations on operators’ use of personal information to prompt or encourage children to use their service more.
• COPPA and schools: The FTC seeks to permit schools and school districts to provide consent for the collection, use, and disclosure of children’s personal information, but limit that consent to use for educational rather than commercial purposes.
• Data security, retention, and deletion: The FTC proposes strengthening data security, retention, and deletion requirements. For example, the FTC proposes requiring disclosure of data retention policies, and prohibiting operators from using retained information for any secondary purpose.

In the letter, the attorneys general support proposed updates to the COPPA Rule and respond to certain issues raised by the FTC, including how to define “personal information” as it relates to children and how to obtain parental consent to use children’s personal information in connection with advertising. The letter also advocates for limiting potential exemptions being considered by the FTC and addresses proposals regarding limitations on the use of personal information in ways that could be harmful to children, such as nudging kids to stay online longer.

Attorney General Bonta is committed to protecting children online. In October 2023, Attorney General Bonta co-led a bipartisan coalition of 33 attorneys general in filing a federal lawsuit against Meta Platforms, alleging that Meta, among other things, designed and deployed harmful features on Instagram and Facebook that addict children and teens to their mental and physical detriment. In November 2023, Attorney General Bonta announced the public release of a largely unredacted copy of the federal complaint against Meta. The removal of the redactions provides additional context for the misconduct that the attorneys general allege.

In March 2023, Attorney General Bonta as part of a bipartisan multistate coalition, filed an amicus brief supporting efforts to compel TikTok to produce subpoenaed materials and evidence as part of ongoing nationwide investigations into the company’s role in the growing youth mental health crisis. In December 2023, Attorney General Bonta joined a multistate amicus brief in Murthy v. Missouri supporting the right of the federal government to communicate with social media companies about matters of public concern. In January 2024, Attorney General Rob Bonta, Senator Nancy Skinner, and Assemblymember Buffy Wicks introduced the Protecting Youth from Social Media Addiction Act (SB 976), and the California Children’s Data Privacy Act (AB 1949), landmark legislation seeking to protect youth online.

In submitting today’s letter, Attorney General Bonta is joined by the attorneys general of Oregon, Illinois, Mississippi, Tennessee, Colorado, Connecticut, Massachusetts, New Jersey, North Carolina, Alabama, Alaska, Arizona, Arkansas, Delaware, District of Columbia, Florida, Georgia, Hawaii, Indiana, Kentucky, Maine, Maryland, Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, New York, Ohio, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Utah, Vermont, U.S. Virgin Islands, Virginia, Washington, and Wisconsin.

A copy of the multistate letter is available here.

SACRAMENTO – California Attorney General Rob Bonta, Senator Monique Limón (D- Santa Barbara), and a coalition of prominent consumer advocacy organizations today unveiled Senate Bill 1061 (SB 1061), legislation seeking to protect consumers from having their credit ruined by prohibiting medical debt from being reported on credit reports. Credit reports are meant to gauge an individual’s ability to repay future debt. Medical debt is often unforeseen and not a reliable indicator of financial risk, yet it can unfairly prevent consumers from getting loans, renting an apartment, or getting a job.

“California families should not need to suffer from the harmful and unnecessary impacts resulting from having their credit damaged by medical debt. We have a straightforward solution and need to implement it here in California, just as we have seen some of our sister states do successfully,” said Attorney General Rob Bonta. “There is no need for medical debt to appear on credit reports and we can stop the harmful spiral where people have unforeseen, catastrophic medical debt and become unhoused, unemployed, or without a vehicle to get to work. To reduce homelessness, to reduce food insecurity, and to address many of California’s other systemic issues, we must utilize upstream interventions that get to the crux of these problems. This is exactly what SB 1061 does.”

“Today a staggering 1 in 5 Californians has reported having medical debt with a disproportionate impact on women and mothers. This debt negatively impacts Californians credit history making it harder to secure a loan, buy a house, or be approved for a credit card,” said Senator Monique Limón. “Without a robust health care system that covers necessary and often lifesaving medical expenses in a timely, accurate and comprehensive manner, medical debt should not be included on consumer's credit reports.”

“We’ve known for years that medical debt doesn’t predict credit defaults, nor does it accurately predict a person’s desire and willingness to pay off loans,” said Jenn Engstrom, State Director of CALPIRG. “We’re hopeful that the legislation introduced by Senator Limón and sponsored by Attorney General Bonta will help create a fair credit system that doesn’t penalize people for life events they can’t control like getting sick.”

"Frontline nurses know that patients with medical debt, especially low-income Californians, delay or avoid medical care because they worry about the impact on their credit reports," said California Nurses Association President Cathy Kennedy, RN. "SB 1061 will help to ensure patients will get the care they need by removing medical debt from credit reports. Then we will have a fair credit system that will not penalize patients when they get the care they need and deserve." 

“People can’t control when they will get sick or hurt, and they can’t control when billing disputes and insurance problems will cause debts for expensive medical care to end up in collections,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “This law is necessary to protect consumers from unmanageable and unpredictable medical debts and to address the disparate impact of medical debt on Black households.”

"Getting hit with medical debt isn't like taking out a loan," noted Ted Mermin, director of the California Low-Income Consumer Coalition. "It's not voluntary, it doesn't predict how creditworthy you are, and all too often the amount you're charged is something the healthcare provider basically made up. But there's nothing fictional about the serious negative impact medical debt can have on consumers' credit reports."

"The Consumer Federation of California is pleased to be a co-sponsor of SB 1061 and work with Senator Limón, Attorney General Bonta and all the other fine groups working to enhance consumer protection when it comes to medical debt," said Robert Herrell, Executive Director of the Consumer Federation of California. "Simply put, California is falling behind in consumer protection in this area. States like New York and Colorado are leading the way. Those states have realized that medical debt shouldn't be an anchor dragging consumers down, both personally and via their credit worthiness. California must do better for consumers and this bill is an important step in that direction. This bill will put California back at the front of the line when it comes to consumer protection against medical debt ruining their lives."

"Health care costs are rising, forcing more and more Californians to delay or skip care in fear of getting an expensive medical bill that can lead to debt,” said Katie Van Deynze, policy and legislative advocate for Health Access California, a co-sponsor of the bill. "Black, Latino and low-income Californians disproportionately have medical debt, and counting it against credit exacerbates inequities in health, housing, employment and more. SB 1061 will give all Californians more peace of mind to seek the care they need knowing it will not negatively affect their credit and their future."

The bill sponsored by Attorney General Rob Bonta, the National Consumer Law Center, the CA Nurses Association, Health Access CA, Consumer Federation of CA, CA Low Income Consumer Coalition, Cal-PIRG, and authored by Senator Limón states that:

• Health care providers should not provide information regarding a patient’s medical debt to a credit reporting agency. 
• Health care providers should include a provision in any contract entered into with a collection agency that prohibits the reporting of any information regarding a patient’s medical debt to a consumer credit reporting agency.
• Credit reporting agencies should not accept, store, or disclose any information concerning a medical debt.

Medical debt continues to increase and is a barrier to employment, housing, and the promotion of health care access and equity. The Urban Institute reported 7.8% of California consumers with a credit report had a medical debt listed on it, increasing to 8.5% for Black Californians. People with medical debt are more likely to say debt has caused them to be turned down for a rental or a mortgage than people with student loans or credit card debt, increasing their risk of homelessness or being forced to live in substandard housing. Debt can also create barriers for finding employment as employers often use credit reports as a basis for hiring decisions, which in turn, makes it even more difficult to pay off medical debt. Both Colorado and New York have passed laws that prohibit medical debt from appearing on credit reports. In September 2023, the Consumer Financial Protection Bureau announced a rulemaking process to remove medical bills from consumers' credit reports.

Text for the proposed bill can be found here. 

OAKLAND — California Attorney General Rob Bonta today, in observation of the Fifth Annual Slam the Scam Day, issued a consumer alert warning Californians to beware of Social Security-related scams and other government imposter scams. In a government imposter scam, someone claims to be an official government employee, and may ask for personal information, demand payment, or make threats. These scams primarily use the phone, but scammers may also use email, text messages, social media, or U.S. postal mail. According to the FTC, in 2023, consumer loss from government imposter scams increased to more than $617 million. In today’s alert, Attorney General Bonta provides Californians with tips to avoid falling victim to these types of scams.

“Today and every day, I am dedicated to using every tool at my disposal to protect California consumers,” said Attorney General Bonta. “Social Security-related scams hold the top spot as the most common type of government imposter scam; I urge everyone to take the necessary precautions to protect themselves and report any suspicious activity to your local law enforcement and to my office at oag.ca.gov/report.”

Protect Yourself from Social Security-Related Scams

Government imposter scams can take money from your bank account, steal your identity and passwords, seriously harm your credit score, and lead to other problems like a loss of security clearance for service members and others. Below are some tips to help you avoid falling victim to these scams:

• Hang up the phone: If you suspect a scam call, immediately hang up or do not respond. The longer you stay on the line, the higher your chances of becoming a victim.
• Protect your Social Security number (SSN): To protect your SSN, avoid carrying your Social Security card in your wallet, and instead keep it at home in a safe place. Only provide your SSN when absolutely necessary – such as on tax forms or employment records – and if a business asks you for your SSN, see if there is another number that can be used instead.
• Protect your online information and accounts with strong passwords: Protect yourself by using different, unique passwords for each of your online accounts. Make sure that the passwords you use are at least eight characters, including a mix of letters, numbers, and symbols. Consider using a password manager to provide suggestions and store strong passwords.
• Don’t click on suspicious links: Scammers try to steal your money, personal information, or passwords by getting you to click on links that are sent to you in texts, emails, or social media. Text messaging is particularly dangerous because you might in a hurry click on a link and begin entering a password, not realizing that the link was phony and your password is being recorded. Don’t click on suspicious links. 
• Check your credit card bills and bank statements often: Look for unauthorized charges, withdrawals, or unexpected bills, and report irregular activity to your bank as soon as you see it. If you notice that a bill didn’t arrive on time, it may mean that someone has changed the contact information on your account in order to hide fraudulent charges. Don't share personal information: Be careful about what personal information you share, such as your address or financial information.
• Take advantage of free annual credit reports: You are entitled to one free credit report every year from each of the three national credit bureaus: Equifax, Experian and TransUnion. Your credit history contains information from financial institutions, utilities, landlords, insurers, and others. By checking your credit reports at least once a year, you can identify signs of identity theft, as well errors in your report that could be raising the cost of your credit. Order your free annual credit reports by phone, toll-free, at 1-877-322-8228, or online at www.annualcreditreport.com.
• Talk to friends and family: Always seek a second opinion from your friends and family if you suspect an interaction is a scam. 

As a rule of thumb, real government officials will never:

• Threaten you with arrest or legal action in exchange for immediate payment.
• Promise to increase your benefits or resolve an issue in exchange for a fee or transfer of funds to a protected account.
• Ask for payment in the form of gift cards, prepaid debit cards, wire transfer, Internet currency, or by mailing cash. 

Some scammers are sophisticated. They may offer to provide “documentation,” or “evidence,” or use the name of a real government official or agency to make you think that their calls are legitimate. If you are not sure, hang up, and go to the official website of the agency (which should be a .gov website) and call them directly. 

Attorney General Bonta is committed to safeguarding the assets and finances of all California consumers. As part of National Consumer Protection Week, Attorney General Bonta highlighted ongoing efforts to protect consumers and urged reporting misconduct or violations of state consumer protection laws at oag.ca.gov/report.

For more information and resources on social-security related scams, visit our website at oag.ca.gov/consumers.

OAKLAND – In recognition of National Consumer Protection Week, California Attorney General Rob Bonta today highlighted ongoing efforts to protect California consumers and urged Californians to report misconduct or violations of state consumer protection laws to the California Department of Justice (DOJ) at oag.ca.gov/report. Complaints submitted by the public provide DOJ with important information about potential misconduct to help determine whether to investigate a business or individual.

“In California, we have strong consumer protection laws and a tremendous team working around the clock to protect Californians online, in their financial lives, in their efforts to find and keep housing and education, and across the marketplace. And we need your help,” said Attorney General Bonta. “This National Consumer Protection week I urge Californians to stand up with me and know their rights as consumers, and to let us know if they see misconduct in the market. Whether protecting data privacy, tenant protections, or stopping egregious bank fees, as the People’s Attorney, I am committed to enforcing consumer protections in the state of California and speaking out for consumer protections nationwide.”

STANDING UP FOR CONSUMER FINANCIAL PROTECTION:

In February, Attorney General Bonta issued letters to banks and credit unions not subject to the Consumer Financial Protection Bureau’s supervision warning that overdraft and returned deposited item fees may violate California’s Unfair Competition Law (UCL) and the federal Consumer Financial Protection Act (CFPA). Some financial institutions charge up to $36 or more for each overdraft. California consumers paid an estimated $200 million in overdraft fees in 2022, with the financial burden disproportionately falling on low-income consumers and consumers of color.

In December 2023, Attorney General Bonta joined a bipartisan multistate coalition of attorneys general in submitting an amicus brief to the U.S. Supreme Court defending states’ rights to enforce state consumer financial protection in Cantero v. Bank of America.

In May 2023, Attorney General Bonta, and a coalition of 24 attorneys general, filed an amicus brief in the U.S. Supreme Court supporting the Consumer Financial Protection Bureau’s (CFPB) contention that the agency’s funding structure is constitutional and arguing that the court should not invalidate the CFPB’s past and ongoing regulatory and enforcement actions. Those regulatory and enforcement actions cover all aspects of consumer financial markets; if allowed to stand, the Fifth Circuit’s decision threatens to upend over a decade of enforcement and regulatory work by the CFPB and would be detrimental to consumers across the country.

HIGHER EDUCATION: 

There is a $1.7 trillion student loan debt crisis in the United States. DOJ is committed to supporting the efforts of the U.S. Department of Education to ease the burden of federal student loans and is committed to protecting California student loan borrowers and those seeking higher education from predatory colleges and lending.  

In February, Attorney General Bonta celebrated the decision by the California Court of Appeal affirming a lower court’s decision which found in the state’s favor in its lawsuit against Ashford University, an online, for-profit college, for violating California’s unfair competition and false advertising laws. In 2017, DOJ filed a lawsuit alleging that Ashford University and Zovio provided false and misleading information to students about career outcomes, cost and financial aid, pace of degree programs, and transfer credits, in order to persuade them to enroll to persuade them to enroll in the school and then used illegal debt collection practices when students struggled to pay their bills. As part of the decision, the court ordered Ashford University and Zovio to pay more than $21 million in penalties.

If you believe you have been the victim of a predatory loan, deceived by a for-profit college, or otherwise taken advantage of, you can file a complaint at oag.ca.gov/report. 

HOUSING: 

California is facing a housing shortage and affordability crisis of epic proportions. Almost 17 million Californians – 44% of all state residents – live in homes that are rented and over half of California renter households are housing cost-burdened, placing them at increased risk of housing instability and homelessness. Co-authored by Attorney General Bonta during his time as a state assemblymember, the Tenant Protection Act (TPA) limits rent increases and prohibits landlords from evicting tenants without just cause.

In February, Attorney General Bonta announced a settlement with two separate Bakersfield landlords and their property management company, Clemmer & Company, for multiple violations of the TPA and, in the case of the management company and one landlord, for violation of the Fair Employment and Housing Act.

Also in February, Attorney General Bonta issued five housing consumer alerts advising California tenants of their rights and protections under state law, and alerting property managers and landlords of their obligations to tenants. One of the alerts, a Know Your Rights alert that notifies tenants of the TPA’s statewide rent increase cap, is available in 24 languages. The remaining four consumer alerts are available in English, Spanish, Chinese (Simplified), Korean, Tagalog, and Vietnamese. All of the alerts are available here, near the bottom of the page.

In January, Attorney General Bonta announced a settlement with Invitation Homes to resolve allegations that the company violated the TPA and California’s price-gouging law by unlawfully increasing rents on approximately 1,900 households.

In June 2023, Attorney General Bonta announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager to resolve allegations that the company violated the TPA by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants.

In addition to statewide protections, some cities and counties have additional rental protections, including stricter limits on rent increases than the TPA and additional just cause requirements. Californians should check what protections are in place where they live. For more information and resources, visit the Resources for Tenants tab here.

PROTECTING CHILDREN ONLINE:  

In January, Attorney General Bonta, Assemblymember Buffy Wicks, and Senator Nancy Skinner introduced the California Children’s Data Privacy Act (AB 1949 (Wicks)), and the Protecting Our Kids from Social Media Addiction Act (SB 976 (Skinner)), landmark legislation seeking to protect youth online. These two bills would, respectively, limit the harms associated with social media addiction and provide more robust protections for kids’ data privacy.

In October 2023, Attorney General Bonta co-led a bipartisan coalition of 33 attorneys general in filing a federal lawsuit against Meta Platforms, Inc. and affiliates (Meta), alleging that Meta designed and deployed harmful features that addict children and teens to their mental and physical detriment. Unredacted documents from this lawsuit demonstrate Meta is aware and purposefully utilizing algorithmic content delivery to target and addict children to social media — actions that they know is causing harm. 

DATA PRIVACY:

The California Consumer Privacy Act (CCPA) provides consumers with groundbreaking rights over their personal information, including:

• Right to Know – Consumers may request that a business tell them what specific personal information they have collected, shared, or sold about them, and why it was collected, shared, or sold.
• Right to Delete — Consumers may request that a business delete personal information that the business collected from the consumer, subject to some exceptions.
• Right to Opt-Out — If a business sells their personal information, consumers may request that it stop doing so.
• Rights for Minors — A business cannot sell the personal information of minors under the age of 16 without their permission and, for children under 13, without parental consent.
• Right to Non-Discrimination — A business may not discriminate against consumers who exercise their rights under the CCPA.

Earlier this year, as part of ongoing efforts to enforce the CCPA, Attorney General Bonta announced an investigative sweep, and sent letters to businesses with popular streaming apps and devices, alleging that they fail to comply with the CCPA. The sweep focused on the compliance of streaming services with CCPA’s opt-out requirements for businesses that sell or share consumer personal information, including those that do not offer an easy mechanism for consumers who want to stop the sale of their data.  

In February Attorney General Bonta announced a settlement with DoorDash, resolving allegations that the company violated the CCPA and the California Online Privacy Protection Act (CalOPPA) by selling its California customers’ personal information without providing notice or an opportunity to opt out of that sale.

For more information about the CCPA, visit oag.ca.gov/ccpa. To report a violation of the CCPA to the Attorney General, submit a complaint at oag.ca.gov/report.

TELEMARKETING:

Telephone scams, like robocalls and robotexts, can result in people losing millions through phishing texts, imposter scams, and links containing ransomware. In 2023 alone, consumers reported losing more than $10 billion to fraud, this marks a 14% increase over reported losses in 2022. 

In February, Attorney General Bonta joined a coalition of 51 bipartisan attorneys general in issuing a warning letter to Life Corporation, a company that allegedly sent New Hampshire residents scam election robocalls during the New Hampshire primary election. The calls allegedly used artificial intelligence to impersonate the president and discourage voters from participating in the primary. 

In January, Attorney General Bonta joined a coalition of 26 attorneys general in filing a comment letter responding to the Federal Communications Commission’s (FCC) notice of inquiry related to the potential impact of emerging artificial intelligence (AI) technology on efforts to protect consumers from illegal robocalls or robotexts. 

For more tips and information on consumer protection, please visit https://oag.ca.gov/consumers.