Consumer protection laws are laws which are intended to prevent consumer fraud as well as various unfair business practices. These laws aim to provide certain rights for consumers while still maintaining a certain degree of freedom for manufacturers.
The majority of these laws govern:
- Health and safety issues;
- Warranties; and
- Product contracts.
What Do Consumer Protection Laws Cover?
The Federal Trade and Commissions Act (FTCA) is one of the major consumer protection laws. This Act outlines what the industry standards are for businesses.
The FTCA essentially prevents a business from making statements which may be misleading or confusing to a consumer. The Fair Packaging and Labeling Act regulates the information which is presented on the packages of retail products.
Other issues which consumer protection laws may govern include, but are not limited to:
- False advertising and false business claims;
- Various anti-fraud and anti-scam efforts;
- Breaches of consumer contracts;
- Health and safety codes; and
- Dangerous products and products liability issues.
Consumer protection laws govern a wide range of legal topics and issues. Consumer claims often involve violations of more than one consumer protection law.
What if a Consumer Protection Law has Been Violated?
A less serious violation of consumer protection laws may, in some cases, be handled by contacting the seller or manufacturer directly. For example, a faulty product may, many times, be exchanged or refunded according to the product warranty.
In more serious cases, it may be necessary to file a consumer complaint or even a civil lawsuit. This commonly occurs with consumer protection violations which result in serious injuries or economic losses to an individual or a group of individuals.
It is common for consumer protection lawsuits to be filed as class action lawsuits, especially when a product affects a whole group of consumers.
What is the Process for Filing a Consumer Fraud Complaint?
Consumer protection laws were enacted to protect the rights of consumers and to provide them with the ability to file a consumer fraud complaint. The first step in the process of filing a complaint is to contact the business which performed the service or sold them the item and inform them of the issue.
It is important for an individual to keep a record of any communications regarding the issue. If the business does not take any action to remedy the issue, the individual’s next step would be to write a letter of complaint to the business. They should also forward a copy of the letter to their local Consumer Protection Agency.
In the alternative, an individual may forward a copy of the letter to the Better Business Bureau. If no action is taken by any entity an individual contacts, they may consider hiring an attorney to represent them and resolve their consumer fraud issues.
What is the Role of the Consumer Protection Agency?
As noted above, one step of the process of filing a consumer fraud complaint may involve contacting the Consumer Protection Agency (CPA). The CPA is an agency which is responsible for regulating the consumer industry.
The CPA can also assist injured individuals in bringing a civil lawsuit against a fraudulent business or professional. In general, the CPA conducts an investigation into the alleged fraudulent business misconduct.
Once their investigation is complete, the CPA will make a determination regarding whether the business was fraudulent. Depending on the specific case, a consumer may file an individual lawsuit against the fraudulent business in order to recover for their losses.
Many of the consumer protection laws, especially state laws, encourage a consumer to report any cases of consumer fraud or abuse. A consumer may be asked to join a class action lawsuit on behalf of a class of consumers who have been injured by the same entity.
A consumer who is involved in a lawsuit may be able to recover damages for their injuries or lost profits which were caused by the violation of consumer protection laws. Another available resolution may be that a court issues an injunction.
An injunction orders a defendant to cease engaging in any dangerous or illegal activities which have occurred.
What is a Gift Certificate?
A gift certificate is a voucher which is provided as a present which is exchangeable for a specific cash value of foods or services from a particular place of business. A gift certificate may also be in the form of a gift card, which is a payment that can be used to make purchases at:
- Retail stores;
- Gas stations;
- Restaurants; and
- Other locations.
An individual can load money onto the card which can then be spent at accepted locations. In some cases, prepaid gift cards charge a fee for purchasing them.
Can a Gift Certificate or Gift Card Expire?
Individuals pay their hard earned money to purchase a gift certificate for friends or relatives. Suppose the friend or relative forgets to use their gift certificate for a long period of time and then wonders whether it can expire.
There are approximately 15 to 20 states which have already passed or are in the process of passing laws which limit or ban expiration dates of gift certificates, including:
- California: Gift certificates cannot expire;
- Connecticut: Gift certificates cannot expire;
- Maine: Gift certificates cannot expire;
- Massachusetts: Gift certificates cannot expire for seven years;
- New Hampshire: Gift certificates worth less than $100 cannot expire;
- Rhode Island: Restaurant gift certificates cannot expire; and
- Washington: Gift certificates cannot expire.
The states which have bills pending to limit or ban expiration dates include:
- New York;
- Texas; and
Additionally, there are some states that have passed laws which limit or ban the administration of dormancy fees. Dormancy fees are monthly charges on gift certificates if they remain unused for a certain amount of time.
Can a Company Charge Administrative Dormancy Fees for Old Gift Certificates?
It is common for a company to charge an administrative dormancy fee on a gift certificate if it remains unused after a certain amount of time. A few states, however, are passing laws limiting or banning these fees, including:
- California: No dormancy fees unless:
- The card is valued at $5 or less when the fee is charged;
- The fee does not exceed $1 per month;
- The card has not been used for 24 months; and
- Fee is noted on the card;
- Connecticut: No dormancy fees;
- Maine: No dormancy fees unless noted on the cards;
- New Hampshire: No dormancy fees; and
- Washington: No dormancy fees.
States with bills pending to limit or ban dormancy fees include:
- Rhode Island; and
Should I Contact a Consumer Protection Lawyer?
Because it may be costly to consult with an attorney, it may be helpful to first discuss the issue with a manager if a company refuses to honor your gift certificate. You can advise them of the state law which bans expiration dates on gift certificates, if applicable, and inform the manager of the basis of your claim.
If, however, the business is uncooperative and you still wish to pursue your claim, it may be helpful to consult with a consumer lawyer. It may be difficult to determine which laws apply to your situation, especially if a gift certificate is purchased in one state and is used in another state.
Your attorney can advise you of the laws in your state, explain your rights, and assist you with successfully pursuing your claim.