New York Sports Club – Consumer Fraud Investigation

What exactly does a lifetime mean?  If you believe a certain complaint we’ve been told a lifetime to New York Sports Club may not mean more than a year or two.

JTB Law Group, LLC is investigating allegations that New York Sports Club allegedly had members pay an initiation fee to lock in a lifetime monthly rate of $19.95 a month and then increased the price anyway.  (https://www.wellandgood.com/good-sweat/new-york-sports-club-insanely-affordable-gym-memberships/)

To add insult to injury to its consumers, they allegedly are ducking behind arbitration clauses which make it less palatable to address the practice as a whole.  The JTB Law Group is investigating to what extent this happened, if at all.

Further compounding the issues include the inability to speak with a manager or someone accountable at most locations.  When it comes to signing up at the gym there always seems to be a body. When it comes to speak with a manager, they are rarely available to discuss the matter and emails to corporate go unheralded.

One location in particular is being investigated, the Bayonne New York Sports Club, which may have offered people the “lifetime membership” rates in 2015.  Other New Jersey New York Sports Clubs as well may have allegedly engaged in this practice.

If you are aware of any information regarding this practice, or if you yourself were a victim please call our firm at (877) 561-0000 to discuss the matter.

Are Students Overpaying For Devalued Online Degrees?

Technology certainly has created many advancements, with the internet at the forefront of everyday life. With the proliferation of almost anything at one’s fingertips, it was a logical progression where academia now could be done remotely rather than shoulder the expense of physical attendance. However, if a degree is just a piece of paper, then what is the value on an e-degree? Do prospective employers devalue its worth? Is there a perception that remote degrees are not worth the paper they’re printed on?

US News & World Report thinks they have value and has gone through the efforts to rank online schools based on their relative worth. Further the price of an online degree has escalated over the last decade with the costs of online education reaching tens of thousands of dollars.

 

Further, there have been numerous alleged scandals and bankruptcies.

For example, in 2009 the University of Phoenix, perhaps the largest online school was hit with a $78.5 million dollar settlement for alleged violations of the Higher Education Act (“HEA”), in which it was alleged there were improper kickbacks used as an inducement to increase enrollment.

An alleged scandal just erupted at one of the top ranked online business schools, where Temple’s Fox School of Business and Management’s online MBA Program allegedly misreported its numbers to US News & World Report, which resulted in a temporary halt on its ranking. The lawsuit filed against Temple’s Fox School of Business and Management’s online MBA Program is presently in it’s infancy and Temple asserts it did nothing wrong.

Brick and Mortar schools have also had it shares of problems with Trump University in November 2016 agreeing to a $25 million dollar settlement.

Some cases may dovetail into qui tam whistleblower actions when the individual is aware of funds from the federal government being misappropriated. If you have any inside information regarding a fraud in higher education or online degrees or information related to the pending lawsuit against Fox School of Business and Management, please call our office at (877) 561-0000 to discuss.

Temple’s MBA Online Program Accused of False and Deceptive Representation

A student enrolled at Temple’s Fox School of Business and Management’s online MBA Programalleges Temple’s Online MBA program of deceptive acts by representing to U.S. News and other educational ranking services that its Online MBA program possessed certain characteristics, qualifications, requirements, benefits, and levels of attainment that did not exist. The complaint alleges not only did Temple falsify their reporting but also engaged in unfair methods of competition causing an increase in their prospective applicants and/or active students to enroll in their Online MBA programs.

Online MBA programs only have a few prestigious rankings authorities, and among the most respected educational rankings industry is the U.S. News & World Report – Best Online MBA Programs Ranking. Inflated rankings may lead to additional revenue for the program, but ultimately leads to diminished job opportunities for the enrollees when the value of the degree diminishes.

Fox School of Business and Management’s online MBA Program allegedly significantly overstated the number of new entrants for its 2016-2017 class who submitted GMAT scores. According to the complaint, Fox School of Business and Management’s online MBA Program inflated ranking provided significant leverage to enable the school to increase enrollment in its Online MBA offering. In fact, in 2017 alone, Temple was able to increase its online MBA enrollment by 57% to 546 students from 351, one of the largest percentage increases of any online MBA offering that year.

Shortly after the release of the 2018 Best Online MBA Programs rankings, Temple allegedly notified U.S. News that it had misreported data used to calculate the Best Online MBA Programs and voluntarily withdraw the school from its forthcoming rankings on their website. On January 24, 2018, U.S. News removed Temple’s Fox School of Business and Management’s online MBA Program to the “Unranked” category in the rankings. Schools in the unranked category do not receive numerical ranks from U.S. News.

Recruiters say most employers are often more critical of online, for-profit schools than of online programs offered by nonprofit schools and ratings of the schools play a factor in hiring according to the complaint.

This action has been brought as a class action against Temple pursuant to the provisions of Rule 23 of the Federal Rule of Civil Procedure. The complaint seeks to represent the following putative members in this class action:

All persons who enrolled as students in Temple’s Fox School of Business and Management’s Online MBA program, between 2015 and the present.

The class action lawsuit seeks injunctive relief, compensatory, consequential, punitive damages and reasonable attorneys’ fees and costs for Temple’s deceptive and unfair business practices, against Temple University for violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“CPL”), Act of December 16, 1968, P.L. 1224, as amended, 73 P.S. §§201.1—201-9.3.

If you have any information regarding the allegations in the complaint, please contact us at (877) 561-0000.

The case is Smith v Temple University. The Plaintiff is represented by JTB Law Group, LLC.

Verde Energy Sued for Allegedly Charging Customers Deceptively Exorbitant Rates

Verde Energy touts on its website about how “wiser energy consumption can positively impact both the environment and your wallet.” According to a lawsuit that has been filed it apparently has not come clean about how it charges “variable” rates that can impact the consumer.

On January 31, 2018, a New Jersey resident Ray Marshall filed a class action complaint against Verde Energy alleging that its deceptive and bad faith pricing practices have caused consumers in the State of New Jersey to pay considerably more for their electricity.

According to the complaint, Verde Energy lures the consumers into switching to its service with false promises that it offers competitive market-based “variable” rates for electricity that are supposed to fluctuate monthly based on the underlying wholesale market rate and save money on the customers’ electricity bills. The Terms of Service by Verde Energy allegedly cause  customers to believe that its rates will be commensurate with market conditions, that is – the prices will go up when wholesale prices rise, and the prices will go down when wholesale prices decrease – thereby enabling consumers to take advantage of market lows.

However, according to the lawsuit, this is not what happens in practice. The complaint alleges that Verde Energy charges high rates for electricity regardless of fluctuations in the underlying market price for electricity. According to the complaint Verde Energy charged a rate that is 80% higher than the local utility company PSE&G’s rate and more than triple the wholesale rate.

The complaint alleges that Verde Energy has used its so-called “variable” rates as an unlawful scheme to fleece New Jersey consumers of millions of dollars by increasing the rates charged to the customers when wholesale prices rose, but staying at a level almost four times the wholesale market rates when the wholesale prices fell.

The complaint seeks to represent the following putative members in this class action:

All persons enrolled in a Verde Energy USA, Inc., variable rate electric plan in connection with a property located within New Jersey at any time within the applicable statutes of limitations preceding the filing of this action through and including the date of class certification

The class action lawsuit seeks injunctive relief, actual damages and refunds, treble damages, punitive damages against Verde Energy USA, Inc. for violations of the New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. 56: 8-1 et seq. and the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”), N.J.S.A. 56:12-14 et seq. as well as breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment under common law.

The case is Marshall v. Verde Energy USA, Inc., Case No.: 2:18-cv-01344-JMV-JBC. The Plaintiff is represented by JTB Law Group, LLC and Kohn, Swift & Graf, P.C.

If you have any questions or information to provide about the above article, you may contact the following attorneys:

Jason T. Brown; jtb@jtblawgroup.com; (877) 561-0000

Nicholas Conlon; nicholasconlon@jtblawgroup.com; (877) 561-0000

Another Pick Off-Play? Not so fast….

Consumer class actions and class actions in general have been under attack by soulless corporations.  First, many corporations insert arbitration clauses that prohibit class actions and ironically make it cost prohibitive to arbitrate so people are out of luck and companies are emboldened to rob consumers blind.  After all, if a behemoth company with ten million subscribers overcharges its customers a quarter a month, that’s 2.5 million a month for the company which equates to 25 million dollars a year.  Yet to the individual consumer the damages of a quarter a month amount to $3 a year, so the cost for invoking an arbitration may be 100 times that and without a class action mechanism it is hard to have a class action law firm or consumer lawyer file an individual claim over $3.  The public companies in the end who are beholden to their stockholders and not their customers are incentivized to jam in adhesion arbitration clauses to line their pockets and pull in profits for their shareholders and executives and disincentivized to do the right thing.

Even if they’re called out for their wrongful conduct, they can just cut the individual check for the $3 and they’ve made out like bandits.  In cases where there’s no arbitration clause, sometimes an individual files a class action on behalf of all the people who have been wronged by the company and the company attempting to head off the liability early, offers full relief to the lead plaintiff in an effort to stop their from being a class action.  This is referred to as a pick-off play, like a baseball runner at first base who leans a little too far being thrown out to end the inning, the defendant is trying to end the lawsuit.

In a Telephone Consumer Protection Act (TCPA) case against Work Out World (WOW), after taking parts of the case all the way to the third circuit and losing, tried the pick-off play by allegedly depositing the full damages into the plaintiff’s account.   Judge Sheridan in the Federal District of New Jersey held that the case could proceed anyway.  The Judge wrote, ““Here, it is apparent that WOW sought settlement with plaintiff in an attempt to thwart class certification.  However, to deny class certification at this point would be to deprive her of a ‘fair opportunity to show that certification is warranted,’” which referenced the United States Supreme Court’s Campbell-Ewald v. Gomez. The 7th Circuit and the 9th Circuit have come to similar conclusions, that essentially the absentee class has a right to have it concerns addressed and with a pick off play, it does not effectively stymie the ability of the court to rule on the issues of class certification.

Corporate unaccountability must be met with assertive litigation to hold it accountable when the company cannot police itself.  Similarly, sometimes employees who try to vindicate their Fair Labor Standards Act (FLSA) rights and try to have the Courts or a jury ascertain how much they’re owed, fall prey to a pick off play to try and stop it from blossoming into a collective action or a Rule 23 Class Action for violations of state law such as New York Wage and Hour Laws, or Illinois wage rights.  We commend those that champion the cause of holding companies accountable and who soldier on in litigation not just for their own interested but for others that are damaged but don’t have the time or inclination to directly file something like an overtime lawsuit.

Another Company, Another Cover-Up

Uber, the pioneer in ride-sharing may have innovated what gets you from here to there, but there’s nothing innovative about how it handled a hacker who allegedly stole 57 million users information – IT COVERED IT UP!  According to Bloomberg News, in October 2016 hackers stole data from the company that included its users telephone numbers and driver’s license information and Failed to Disclose the data breach to its customers.  Instead, the company paid hackers $100,000 to on their honor delete the compromised data.   It’s not clear if they paid the extortion with bitcoins or some other cryptocurrency, but it is clear they did not do right to their customers whose information may have been compromised and by waiting for over a year for this to be disclosed it suggests deep integrity issues over there.  Further, it’s users still haven’t been properly notified.

The irony of the cover-up is at the same time they were negotiating with regulators from the United States amidst privacy concerns and were smack dab in the middle of litigation with its drivers over Fair Labor Standards Act (FLSA) violations for classifying its drivers as independent contractors rather than employees.  In the thick of discovery for these processes and some very front page news regarding management having issues, the cover up was well on its way.

Oftentimes the cover up is worse than the underlying item they’re worried about, and in this case it might or might not be.  I mean, after all, if you take the hackers at their word, I’m sure they just deleted all the information they stole.  A crime motivated by profit wouldn’t continue to profit by keeping a set of the data would it?

Perhaps, UBER hid behind the fact that it had an arbitration clause and for a period of time that clause which seeks to kill consumer class actions was found unenforceable and they wanted to wait that out with deliberate recklessness towards its customers.  But then how does one hold a major company accountable when an individual may only have a few hundred dollars or a few thousand dollars’ worth of damages, and the cost for admission to arbitrate may be to pay the arbitrator $500 an hour to privately and individually judge that claim? The inequity of arbitration.

It should be interesting to read how this plays out over the coming months. Hopefully, there will be some industrious ways to hold UBER accountable, or perhaps some courageous whistleblower will step forward and blow the whistle on what really went on.

I guess for now UBER which in Latin means abundance doesn’t refer to the fact that you can obtain a ride anywhere, but that thanks to them your data may be everywhere.  And its users who rely on them to safeguard their information through Fides et Justitia (faith and justice), now need UBER to do something for people to regain its trust or else justice will claim another nascent company who is up to old tricks.

 

Veteran Payday; Wells Fargo To Repay U.S.$108 Million Towards Veteran Loans.

 

Case Number: 06-00547 in Northern District of Georgia, U.S. District Court; U.S. ex rel. Bibby et al v Wells Fargo Bank NA et al.

A controversial whistleblower lawsuit has hit the U.S District Courts with a vengeance after successfully reaching a resolution settlement payout. Wells Fargo & Co (WFC.N) are now obligated to pay a substantial $108 million in damages over a veterans’ loan dispute. The whistleblower lawsuit advanced claims that Wells Fargo & Co deliberately charged excess hidden military veteran fees to refinance their own properties and that fees were concealed when the company applied for federal loan guarantees.

Ranking as the third largest bank in the U.S., Wells Fargo & Co made a statement on Friday the resolution puts to rest the allegations that the Interest Rate Reduction Refinance Loans were ineligible for guarantees provided by the U.S Department of Veterans Affairs loan guarantee program.

The alleged claims were filed in the District Courts in 2006 under seal and brought to the publics’ attention in 2011. Victor Bibby and Brian Donnelly, who operate as mortgage brokers in Georgia, served as whistleblowers also known as relators, and attempted to recover losses that both taxpayers and government suffered, as a result, on guaranteed loans that defaulted and the losses to government.  Donnelly and Bibby sued eight separate lenders to recoup from extensive losses and Wells Fargo was the seventh lender and the largest.

First Tennessee, JP Morgan Chase & Co, PNC Financial Services Group INC, Sun Trust Banks INC, Bank of America Corp, and Citigroup INC settled the lawsuit in 2012 for a merged payout figure of $161.7 million according to the broker’s lawyer.

Wells Fargo issued a statement from their Chief Executive Tim Sloan specifying that they are committed to serving the financial health and well-being of veterans. Tim Sloan commented, “that being able to settle this longstanding lawsuit enables us to put this matter behind us and continue focusing on serving our customers and rebuilding trust with our stakeholders.”

In the previous eleven months, Wells Fargo has been required to address fallout concerns from other practices, including a scandalous sensitive matter of Wells Fargo creating unauthorised customer accounts, and charging additional fees for auto insurance that customers never consented to.

Wells Fargo stated on Friday that the company is scrutinizing whether they have delivered undue financial damage on customers through frozen deposit accounts, extra products such as identity theft protections, and residential mortgage fees.

The bank reached a substantial $10 million settlement in 2011 when a different class action lawsuit claimed that Wells Fargo had imposed excessive closing costs on almost 60,000 veteran refinancing loans.

Friday’s settlement is nothing less than impressive considering the government failed to assist Donelly and Bibby in pursuit of their lawsuit that falls under the federal False Claims Act (FCA).

Under this Act, private whistleblowers are eligible to sue on behalf of the government and share in recoveries if successful. Government intervention and assistance in lawsuits usually delivers a higher qui tam settlement, also known as a whistleblower award.

 

New Jersey Whistleblower Receives $9.4 Million-dollar Whistleblower Award for Alleged Mortgage Fraud

On August 7th, 2017 a New Jersey whistleblower was awarded $9.4 million Tuesday for filing a False Claims Act (FCA), also known as a qui tam complaint.  The allegations involved mortgage lender PHH Corporation and the relator questioned the practices with the mortgage company and its filings with the Federal Government.   The total qui tam settlement amount was over $74 million dollars.  In these actions, a relator or whistleblower is entitled to up to 25% of the settlement amount attributable to the information provided, but at the end of the day $9.4 million dollars is an excellent award for blowing the whistle on allegedly unlawful practices

The complaint alleged PHH failed to comply with federal regulations for loans held by the Federal Government. For a five year span, PHH certified loans for Federal Housing Administration (FHA) insurance, which resulted in major losses for the government.

“Government mortgage programs designed to assist homeowners—including programs offered by the FHA, VA, Fannie Mae and Freddie Mac—depend on lenders to approve only eligible loans,” said Chad Readler, the acting assistant attorney general for the Civil Division, in a prepared statement. “The department has and will continue to hold accountable lenders that knowingly cause the government to guarantee, insure, or purchase loans that are materially deficient and put both the homeowner and the taxpayers at risk.”

“While we cooperated fully in these investigations since receiving subpoenas in 2013, we concluded that settling these matters is in the best interest of PHH and its constituents,” PHH said. “Adhering to high legal, regulatory and ethical standards is at the core of how we conduct business, and we remain committed to serving our customers and all of our stakeholders consistent with that principle.”  The Defendants did not admit to liability, but as qui tam lawyer Jason T. Brown noted, “The apology is in the money.”

Mr. Brown continued by commending the integrity of the relator or whistleblower for coming forward and her counsel and the Department of Justice for advancing the case.  There still may be additional exposure for PHH in a different capacity due to a $100 million penalty issued by the Consumer Financial Protection Bureau (CFPB).  The CFPB which is supposed to be a vanguard for consumer rights, has been attacked as being an unconstitutional entity by defendants and the defense bar, although to date, there has not been a court of note siding with that argument.

Permanent Injunction Entered against Utah Pharmacy

The U.S. District Court for Utah entered a permanent injunction against Isomeric Pharmacy Solutions LLC (Isomeric), William O. Richardson, its Chief Executive Officer (CEO), Rachael S. Cruz, its Chief Sales Officer, and Jeffery D. Brown, its Chief Operating Officer (COO). The consent order entered was an injunction prohibiting the defendants from distributing adulterated, misbranded and unapproved new drugs in violation of the federal Food, Drug, and Cosmetic Act.

 

A complaint was filed in July at the bequest of the U.S. Food and Drug Administration (FDA), alleging, the defendants failed to sufficiently remedy insanitary conditions that resulted in contamination.

Isomeric manufactures, labels, and distributes sterile drugs, including injectable hormones, injectable corticosteroids, and ophthalmic drops. The pharmacy/company is a direct to physician distributor. According to the complaint, there is a long history of the Defendants failing to maintain adequate sanitary conditions. According to Acting Assistant Attorney General Chad A. Readler “Compounding pharmacies must produce their drugs in a way that does not potentially endanger patient safety “The Department of Justice will continue to work actively with FDA to ensure that compounding pharmacies comply with the law and provide safe products that doctors and patients can rely on.”

 

Isomeric was involved in four voluntary recalls in 2016 and 2017 after an FDA inspection. The 2016 recalls involved three types of injectable suspension drugs: triamcinolone diacetate 40 mg/mL, methylprednisolone acetate/lidocaine HCl 40/10 mg/mL, and betamethasone acetate/betamethasone sodium phosphate.

 

FDA Commissioner Scott Gottlieb, M.D. stated, “Isomeric endangered the public health by manufacturing injectable drugs under poor conditions that compromised their required sterility and put patients at risk,” “We will continue taking strong enforcement actions against compounders who violate the Drug Quality and Security Act and put patients at risk by failing to produce sterile drugs in compliance with the law.”

 

According to lawyer Jason T. Brown, who handles whistleblower actions, “This appears to all be government action and rightful responsive action. While the 9th Circuit has just opened the door for plaintiffs to potentially file certain claims that blow the whistle on things like fraud upon the FDA, this particular case would be challenging to bring as a qui tam, but the government alone did a commendable job.”

 

https://www.justice.gov/opa/pr/district-court-enters-permanent-injunction-against-utah-pharmacy-and-its-executives-prevent