Litigation involving claims of unfair or deceptive business practices under Chapter 93A is, to say the least, a frequent occurrence in Massachusetts civil cases. Quite often, Chapter 93A claims are a mechanism for a plaintiff to potentially recovery multiple damages against a business including, attorney's fees, costs, and interest. In order to bring a Chapter 93A claim, however, an aggrieved party must begin the process by sending what is commonly referred to as a Chapter 93A, section 9 "consumer protection demand letter" to which the business has 30 days to respond.
The demand letter serves three basic functions: (1) It provides notice and information to business about the nature of the consumer's claim. (2) It encourages business to negotiate a settlement rather than go to court and (3) It controls the number of money damages a consumer may ultimately recover. So, what are the requirements that a demand letter must contain in order to meet the requirements of the statute:
1. The letter must be sent 30 days before any complaint is filed in court. The letter should be sent by certified mail in order to ensure that there is a record that the letter has been delivered thus triggering the 30 day response time period.
2. It must specifically identify the claimant and the claimant's address.
3. The letter must provide a reasonable description of the unfair act or practice. This involves setting forth a descriptive factual account of the problem and where the deception happened. An effective tool in setting forth the factual account would be to use separate paragraphs for each fact alleged.
4. Damages must be identified. This can be done by describing the money or property lost or any injuries suffered by the business due to the unfair or deceptive act.
5. After being served, the business has 30 days to prepare a response with a reasonable offer of settlement. Unknowingly, many businesses later suffer liability because they have not undertaken the affirmative obligation to investigate the facts and law so as to determine whether the business should tender a reasonable settlement in response to the demand letter. Moreover, if a business fails to investigate a consumer complaint any such failure may later be considered as evidence of bad faith which, in and of itself, could become the basis for a finding a violation of the consumer protection act in favor of a consumer even if the underlying alleged unfair or deceptive practice was not knowing or willful.
6. If the consumer, for one reason or another, fails to accept any offer made by the business or if an agreement cannot be negotiated and the consumer files a lawsuit, there are risks that both sides must face. The consumer, if successful in a later court action, may potentially recover multiple damages including reasonable attorney's fees, costs, and interest. On the other hand, however, a court may find that the initial response to the consumer protection demand letter by the business was reasonable or in good faith under the specific circumstances of the case and thus award the consumer only its actual damages. When a court decides such a claim it has to take into consideration whether the business's conduct was, in fact, unfair or deceptive. If the answer is yes, then the question becomes whether the conduct was willful, whether the business's refusal to grant the consumer his or her original demand was in bad faith, and whether the business was aware of its violation.
The Katz Law Group has deep experience in the area of Chapter 93A and has represented both individuals and businesses in bringing and defending violations of the Consumer Protection Act. Please contact us if you have any questions regarding this ever-developing area of Massachusetts law.