The Consumer Protection Division in the Maryland Attorney General's Office is being restructured to provide added safeguards against business fraud and other abuses.

Under a new arrangement recently announced by Attorney General Stephen H. Sachs, the consumer protection and securities divisions will be merged, and a new director of consumer and investor affairs appointed. H. Robert Erwin Jr., the current consumer division director, is resigning March 1 to enter private law practice in Baltimore.

Erwin and other officials in the office say the reorganization will strengthen the state's consumer protection program. Certain abuses that now fall between the cracks within the attorney general's office will be better monitored, Erwin said.

"Pyramid schemes now fall halfway between the consumer division and the securities division. A second example is small business fraud, in which an individual, for example, sends out fraudulent billings for light bulbs to small companies. The person mailing the 'bills' is hoping that the business getting the bill will pay without checking its records and finding that it never received the light bulbs.

"The consumer division wouldn't handle those kinds of problems, and technically, they aren't securities issues, either," he said. "By having the two divisions working together, we think the attorneys can attack these kinds of problems.".

The Consumer Protection Division has established a record of cooperating with local consumer agencies on a variety of issues, including the current lawsuit against Woolco department stores. As the result of complaints to local consumer protection agencies in Montgomery and Prince George's counties, the attorney general's office filed suit against Woolco, charging that its stores inflated their prices in preparation for the chain's current going-out-of-business sale. An injunction to stop those alleged practices was denied last week, but Erwin said the lawsuit will proceed and the case will be tried on its merits.

In announcing the reorganization, Sachs said he was accepting Erwin's resignation with "profound regret." Sachs has appointed Steven J. Cole, 39, a specialist in public interest law from Washington, to head the newly combined operations.