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UTAH DIVISION OF CONSUMER PROTECTION : An Enforcement Perspective

UTAH DIVISION OF CONSUMER PROTECTION : An Enforcement Perspective. Liz Blaylock, Investigator. CONSUMER PROTECTION MISSION EDUCATION ENFORCEMENT REGISTRATION. STATUTES ENFORCED Business Opportunity Disclosure Act Utah Code Ann. 13-15 Charitable Solicitation Act Utah Code Ann. 13-22

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UTAH DIVISION OF CONSUMER PROTECTION : An Enforcement Perspective

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  1. UTAH DIVISION OF CONSUMER PROTECTION:An Enforcement Perspective Liz Blaylock, Investigator

  2. CONSUMER PROTECTION MISSION • EDUCATION • ENFORCEMENT • REGISTRATION

  3. STATUTES ENFORCED • Business Opportunity Disclosure Act Utah Code Ann. 13-15 • Charitable Solicitation Act Utah Code Ann. 13-22 • Child Protection Registry Utah Code Ann. 13-39 • Consumer Sales Practice Act Utah Code Ann. 13-11 • Credit Services Organizations ActUtah Code Ann. 13-21 • Health Spa Services Protection Act Utah Code Ann. 13-23 • Immigration Consultants Registration Act Utah Code Ann. 13-49 • Music Licensing Practices Act Utah Code Ann. 13-10a • New Motor Vehicles Warranty Act (Lemon Law) Utah Code Ann. 13-20 • Pawnshop and Secondhand Merchandise Transaction Information Act Utah Code 13-22a • Price Controls During Emergencies Act Utah Code Ann. 13-41 • Prize Notices Regulation Act Utah Code Ann. 13-28 • Postsecondary Proprietary School Act Utah Code Ann. 13-24 • Postsecondary School State Authorization Act, Utah Code Ann. §13-34a • Pyramid Scheme Act Utah Code Ann. 76-6a • Telephone and Facsimile Solicitation Act Utah Code Ann. 13-25a • Telephone Fraud Prevention Act Utah Code Ann. 13-26 • Uniform Debt-Management Services Act Utah Code Ann. 13-42 • Unfair Practices Act Utah Code Ann. 13-5 • Uniform Debt-Management Services Act Utah Code Ann. 13-42

  4. Any transaction that occurs where the consumer OR the business resides within the state of Utah The Division’s jurisdiction = THAT’S A LOT!!!!!

  5. Telemarketing Coaching Services Retail Sales Deposits & Refunds E-Commerce & Internet Offers Alarm Systems Personal Services Auto Repair & Sales Home Improvement & Repair Debt Collection

  6. THE Division’s Complaint Process FINDINGS& ORDER AGENCY Review JUDICIAL Review

  7. Consumer sales practices ACT

  8. Utah Blaze not part of AFL — for nowArena Football » Utah owner disputes franchise is folding. Utah Blaze ticket holders eligible for refunds Ticket holders left holding the bag when the Utah Blaze arena football team ceased operations last year may finally be able to recoup their money. The Utah Division of Consumer Protection announced Tuesday that Blaze …

  9. Utah Health Spa Services Protection Act Utah Code §13-23 (1987)

  10. Health Spa?

  11. "any person, partnership, joint venture, corporation, association, or other entity that, for a charge or fee, provides as one of its primary purposes services or facilities that are purported to assist patrons to improve their physical condition or appearance through: • aerobic conditioning; strength training; fitness training; or other exercise. health spa MEANS: TRAINING STUDIO PERSONAL TRAINER GYM FITNESS CENTER HEALTH CLUB

  12. When you think of this… Think HEALTH SPA!

  13. Register and obtain a permit • Submit contract and pricing information • Submit proof of liability insurance • Post a Surety Bond What do they need to do WITH Consumer protection? SURETY WHAT? Surety is used to guarantee consumers a refund of the reaming balance on their contract in the event the gym closes and has consumers it owes.

  14. SURETY IN EFFECT Division Of Consumer Protection SECURED $227,252.35 In Refunds To Utah Consumers

  15. If there is substantial evidence of a violation of the HSPA, the Division may • DENY, REVOKE or SANCTION the entity • $$$$ Fine the entity • Issue a cease and desist order • Seek an order in Court to enjoin prohibited conduct, seek damages, disgorgement, and other remedies. • Administrative fines under this chapter are up to $2,500 per violation. Each day the violation is committed or permitted to continue constitutes a separate punishable offense. Enforcement action

  16. Health Spa Fraud Case “If your Goal is to Lose Body Fat, Control diabetes, Treat Arthritis, Reduce Cellulite, Lower your Blood Pressure … then this WEIGHT LOSS study is for YOU!”

  17. Not a “Weight Loss Study” • Participants did not “Volunteers ” • No medical providers • Results were not tracked The program services advertised to be valued at “over $449” were NOT included and were NOT FREE. Consumers that “Volunteered” for the “Study” were in fact purchasing a 2 year non-cancelable gym membership with a monthly fee of $39, a total cost of $936 Regular gym memberships at this facility cost $9.99 and $19.99 per month depending on the membership plan. Investigative results:

  18. 5. Obligations of the Division: The Division agrees to assess a $10,000 fine as penalty for the violations that occurred. The Division agrees to accept a $2,500 fine from Respondents and stay the remaining balance of $7,500 for a period of one year.

  19. Utah Charitable Solicitations ActUtah Code §13-22 (1987)

  20. The Changing Landscape of Giving

  21. What’s A charity ? Any person, joint venture, partnership, limited liability company, corporation, association, group, or other entity that solicits or obtains contributions solicited from the public for a charitable purpose. educational, voluntary health, philanthropic, humane, patriotic, religious, social welfare, advocacy, public health, public safety, environmental , conservation, civic organization, law enforcement, firefighter fraternal association……

  22. A request, directly or indirectly, for money, credit, property, financial assistance, or any other thing of value on the plea or representation that it will be used for a charitable purpose. What is a charitable solicitation? WHAT DOES A CHARITY HAVE TO DO TO SOLICIT? • Register as a non-profit entity with Corporations and Commercial Code • Apply for an IRS tax exemption • Register with the Utah Division of Consumer Protection

  23. If there is substantial evidence of a violation of the CSA, the Division may • DENY, REVOKE or SANCTION the entity • $$$$ Fine the entity • Issue a cease and desist order • Seek an order in Court to enjoin prohibited conduct, seek damages, disgorgement, and other remedies • Administrative fines under this chapter are up to $500 per violation up to $10,000 maximum for any series of violations arising out of the same operative facts. Enforcement action

  24. CHARITY FRAUD CASE United States Navy Veterans Association Bobby Thompson Blanca Contreras Raised nearly $100 MILLION from donors in 41 states between 2002 to 2009

  25. Blanca Contreras - pleaded guilty to engaging in a pattern of corrupt activity, aggravated theft, money laundering and tampering with records. - Sentenced to 5 years in prison and faces deportation to her native Mexico upon her release. Bobby Thompson is really former Army Capt and Harvard law school graduate John Donald Cody. -December 2013 ”BOBBY “ was convicted of 23 charges including corrupt activity, racketeering, money laundering, records tampering, theft and identity theft. -sentenced to 28 years in prison with the first parole release date in April 2040*

  26. DIVISION OF CONSUMER PROTECTION consumerprotection@utah.gov 160 East 300 South Salt Lake City, Utah 84111 Phone: 801-530-6601 | Toll-Free: 1-800-721-SAFE | Fax: 801-530-6001

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