Consumers and businesses are often unaware of their rights and possible liabilities in connection with trade practices in Massachusetts. It is important that a business operating in this state knows its responsibilities under the Massachusetts Consumer Protection Law to avoid potentially stiff financial penalties.
It is also important to know the rights of consumers, the remedies for breach, and possible defenses to a lawsuit under the law. If your rights have been violated, or you are a business facing a civil action under the Massachusetts Consumer Protection Law, our firm has experienced Massachusetts attorneys ready to fight for you.
A. Unfair or Deceptive Trade Practices
Massachusetts enacted the Consumer Protection Statute in Massachusetts, General Laws, Chapter 93A. It states that "Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful." This broad language includes a variety of unfair and deceptive acts and practices.
An unfair or deceptive act typically occurs when someone in the position of a seller deceives or acts unfairly towards a buyer. The Massachusetts Attorney General has enacted certain regulations which define per se unfair or deceptive practices, but this list is not exclusive. In considering whether a specific act violates the act, a court will consider whether it is unethical or immoral, whether it is dishonest, whether it violates the commonly accepted notions of fair dealing, and whether it is likely that substantial harm would occur.
Types of unfair practices include:
- False Advertising - Actual false statements, inaccurate representations of products, "Bait and Switch Advertising."
- Deceptive Pricing - Misrepresenting the price to induce business when the actual price is higher.
- Breach of Warranty - Deliberate failure to honor a warranty agreement.
- Breach of Contracts - Not every breach of contract implicates the Consumer Protection Law, but where a party breaches the contract with some ulterior or deceptive motive the law may apply.
This list by no means covers every situation, but both businesses and consumers should be aware of how the law may affect them.
B. The Legal Process - How to File a Claim
The legal process under the act depends on whether the person filing the claim, the plaintiff, is a consumer or a business.
1. Consumer Process
Section 9 of Chapter 93A grants a right to any person injured by an unfair trade practice the right to bring suit against a business. A consumer's first step is to file a "demand letter" to which the business has thirty (30) days to respond. The purpose of the letter is to put the business on notice of the suit as well as encourage the out-of-court settlement of the issues.
The demand letter must:
- Be sent at least thirty (30) days before the filing of a lawsuit;
- Identify the claimant's full name and address;
- Reasonably describe the deceptive or unfair act subject of the lawsuit; and
- Identify the specific injury suffered by the consumer.
A business has thirty (30) days to respond to the letter. In that letter, the business can make a settlement offer, but if that offer is rejected, a court may later determine whether the settlement offer was reasonable or unreasonable. If reasonable, the consumer may be limited to the amount offered in the settlement for recovery.
2. Business-to-Business Process
If business brings a civil action to another business under the Act, Section 11 of Chapter 93A applies. Under Section 11, no demand letter is required as it is for consumer plaintiffs. The provision does permit the submission of a settlement offer prior to initiation of a lawsuit, which if later found reasonable may limit the plaintiff to single damages.
An additional requirement on litigation under Section 11 is that the unfair or deceptive practices must have occurred primarily and substantially within Massachusetts. This requirement does not exist for consumer plaintiffs under Section 9.
A plaintiff may first seek compensatory damages; the amount of money or other remedy required to compensate the plaintiff for their injury as a result of the defendant's actions. In certain cases the compensatory damages amount can be doubled or tripled if the plaintiff can prove:
- The defendant willfully and knowingly violated Chapter 93A; or
- The defendant refused to grant relief in bad faith with knowledge or reason to know that his acts violated Chapter 93A.
If these requirements are proven, plaintiffs may also be able to seek recovery of their reasonable attorney fees.
C. Defenses to Unfair Practices Claims
If you or your business are the subjects of an unfair practices claim under Chapter 93A there are ways to defend your case and alleviate possible damages against you. While each situation is unique, some common examples are instructive.
1. "The best defense is a good offense."
The first step in defending against Chapter 93A claims is to prevent them from occurring in the first place. Consultation with an experienced unfair or deceptive practice attorney allows your business to actively look for possible liabilities and enact business policies that help to prevent them.
2. Statute of Limitations
A statute of limitations is the date by which a plaintiff must file their action or the suit may be dismissed. The statute of limitations for Chapter 93A claims is four (4) years from the date of the alleged injury or deceptive act which gave rise to the lawsuit. If a plaintiff files their claims after the limitations date has run the case against your business can be dismissed.
3. The Demand Letter
Consumer plaintiffs are required to file a demand letter at least thirty (30) days before filing suit. If a plaintiff files suit without a demand letter or file the suit prematurely, the case may be dismissed. Further, the demand letter has certain requirements that must be met. Failure to comply with those requirements may warrant dismissal of the case.
Further, if your business responded to a timely demand letter with a reasonable settlement offer, which was denied, the plaintiff may be limited to that original offer at the end of litigation.
4. The Alleged Acts Do Not Violate the Law
Simply because a plaintiff alleges you violated the act does not mean that you or your business are liable. Some cases are frivolous and meant to induce a quick settlement or are done without a complete understanding of the law. An attorney can defend your conduct in court to avoid damages.
5. No Willful or Knowing Violation of the Law
In many cases, a violation may have occurred, but it was not done willfully or with the knowledge that the particular act violated the law. If that is the case, a plaintiff is unable to collect multiple damages or attorney fees. This protects your business from facing punishment for acts which were not done with unfair or deceptive intent.
The attorneys at the Katz Law Group can effectively protect your rights and help ensure compliance with the Massachusetts Consumer Protection law. Please feel free to call us at 508-480-8202 or contact us on our website.