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• Child Protection Registry Utah Code Ann. 13-39• Consumer Sales Practice Act Utah Code Ann. 13-11• Credit Services Organizations Act Utah 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

THE DIVISION’S JURISDICTION =

Any transaction that occurs where the consumer OR the business resides within the state of Utah

THAT’S A LOT!!!!!

1.Telemarketing2.Coaching Services3.Retail Sales 4.Deposits & Refunds5.E-Commerce & Internet Offers6.Alarm Systems7.Personal Services8.Auto Repair & Sales9.Home Improvement & Repair10.Debt Collection

THE DIVISION’S COMPLAINT PROCESS

Compliant Filed

Case

Investigated No Violation, case closed

InvestigatedViolation occurred

Referred Consumer notified of referral, complaint is forwarded to the appropriate

agency

Corrective Action

Settlement

Hearing

FINDINGS&

ORDER

AGENCY

Review

JUDICIAL

Review

CONSUMER SALES PRACTICES ACT

UTAH BLAZE NOT PART OF AFL — FOR NOWARENA FOOTBALL » UTAH OWNER DISPUTES FRANCHISE IS FOLDING.

Utah Blaze ticket holders eligible for refundsTicket 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 …

Utah Health Spa Services Protection Act

Utah Code §13-23 (1987)

“We don’t offer massages or facials, we aren’t a Health Spa.”

“Our gym doesn’t have a steam room so I don’t see how this law applies?”

“You’ve got the wrong place lady, we do body building here.”

“This isn’t some relaxing spa, this is a gym.”

HEALTH SPA?

"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:

GYMHEALTH CLUB

PERSONAL TRAINER

FITNESS CENTER

TRAINING STUDIO

Think HEALTH SPA!

When you think of this…

• 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.

SURETY IN EFFECT

Division Of Consumer Protection

SECURED $227,252.35 In Refunds To Utah Consumers

• 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 orderSeek 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

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!”

– 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:

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.

UTAH CHARITABLE SOLICITATIONS ACT

Utah Code §13-22 (1987)

The Changing Landscape of Giving

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……

• 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

• 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 orderSeek 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

United States Navy Veterans Association

Blanca ContrerasBobby Thompson

CHARITY FRAUD CASE

Raised nearly $100 MILLION from donors in 41 states between 2002 to 2009

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*

DIVISION OF CONSUMER PROTECTIONconsumerprotection@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