Sunday, January 27, 2008

Indiana's Deceptive Consumer Sales Act - Part 1

Let me say that for most of the past fifteen years I have been thinking Indiana's Deceptive Consumer Sales Act is pretty useless. That was when I tried a case on another subject - home improvements fraud - that also comes under the Deceptive Consumer Sales law and the judge implied an intent requirement where the statute does not require any such intent.

I find the Act's problems lying in the following provision and the general public's ignorance of the Act:

IC 24-5-0.5-5(a): No action may be brought under this chapter, except under section 4(c) of this chapter, unless (1) the deceptive act is incurable or (2) the consumer bringing the action shall have given notice in writing to the supplier within the sooner of (i) six (6) months after the initial discovery of the deceptive act, (ii) one (1) year following such consumer transaction, or (iii) any time limitation, not less than thirty (30) days, of any period of warranty applicable to the transaction, which notice shall state fully the nature of the alleged deceptive act and the actual damage suffered therefrom, and unless such deceptive act shall have become an uncured deceptive act.
I know that is a big chunk of statute to digest. Let me pick it apart a b it. First, the consumer must know that a certain act comes under the Act. Second, the consumer must write a letter explaining to the party providing the consumer good or service (that is the supplier mentioned above) explaining how they were injured within the time frame set out above. Unless, of course, the act is incurable. The statute brings an intent requirement into its definition of "incurable deceptive act":
IC 24-5-0.5-2(a) (8): "Incurable deceptive act" means a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead. The term includes a failure of a transferee of structured settlement payment rights to timely provide a true and complete disclosure statement to a payee as provided under IC 34-50-2 in connection with a direct or indirect transfer of structured settlement payment rights.
Which brings us back to common-law, tortious fraud which is not required when a supplier does nothing to cure (fix) the deceptive act within 30 days of receiving notice of the consumer's injury.

The consumer loses if:
  1. If a consumer does not know that a transaction comes under the Deceptive Sales Act; or
  2. If the consumer does not send written notice of the injury.
Little noise gets made about this statute. Yet, the statute has a lot of potential. So now I will be making some noise about the statute. Over the next week or two, I hope to explore the statute in some detail. For what has changed over the years is the availability of the Internet to publicize and informing the public is one purpose of this blog.

Business owners, do not think that what will follow does not apply to you. I think consumers and business owners are ill-served by the statute's relative obscurity. Honest business people can find themselves ensnared by the statute just as dishonest suppliers can escape penalties thanks to the general public's ignorance.