Some Consumer Protection Laws in Michigan
Mich. Comp. Laws §§ 445.901 through 445.922: What Is It?
Michigan Compiled Laws Chapter 445, Act 331 is more commonly known as the Michigan Consumer Protection Act (“MCPA”) and it is a state law that provides consumers with legal protection from unfair methods, acts, or practices during trade or commerce. The MCPA contains provisions that determine what a business can or cannot do when engaging with consumers and provides regulations that offer remedies to individuals who are injured by businesses. Under the MCPA, the Attorney General, prosecuting attorneys, and private citizens have the right to take legal action against businesses that violate the law. Class action lawsuits are also permitted by the MCPA.
What is prohibited?
According to the MCPA, there are a number of business practices that are considered to be unlawful. Businesses are broadly prohibited from engaging in unfair, unconscionable, or deceptive acts. Specifically, some examples of unlawful actions include, but are not limited to:
- Falsely representing the geographic origin of a good or service; and
- Falsely representing a good as new if it has been used or damaged; and
- Advertising a good or a service without the intention to sell them as advertised; and
- Disparaging the goods or services of another business; and
- Making misleading statements about the price of a good or service; and
- Causing consumers to be confused about or misunderstand their legal rights or obligations in a transaction; and
- Falsely claiming that a repair or replacement needs to be made when it does not need to be; and
- Leading a consumer to believe that they will receive a discount or a benefit if the benefit is based upon the occurrence of another event; and
- Taking advantage of a consumer’s disability or illiteracy; and
- Charging a consumer a price that is much higher than the price of similar goods or services.
Who does the law apply to and how can consumers sue?
The law applies to businesses in Michigan that participate in trade or commerce. If an unlawful act conducted by a business causes injury or loss to a consumer, the consumer has the right to take legal action and file a civil suit against the offending business. In Michigan, consumers do not have to send a pre-suit notice to a business before filing a lawsuit against them for violations of the MCPA.
What damages are a consumer entitled to?
If a consumer files a successful lawsuit, they are entitled to receive either $250.00 or actual damages, whichever is greater. Additionally, they may also be able to recover reasonable attorney’s fees and costs.
What is the statute of limitations?
Under the MCPA, the statute of limitations is six years after the date of the alleged violation or one year after the final payment in a transaction that involves an unlawful business practice, whichever ends at a later date. Thus, depending on the type of alleged violation, consumers have up to six years to take legal action against an offending business.
Are there exemptions?
The MCPA does not apply to entities like publishers or radio/television stations that engage in the business of providing information if they had no knowledge of the nature of the information that they were providing or no financial interest in the advertised goods or services. It also does not apply to services that are provided under a professional license such as medical services that are provided by a consumer’s doctor or renovations done by a licensed builder. It also does not apply to public utilities such as electricity and natural gas. However, it does apply to the propane that is used for home heating, as pursuant to Michigan law that is not deemed to be a public utility.
Mich. Comp. Laws §§ 339.901 through 339.930: What Is It?
Michigan Compiled Laws Chapter 339.901 et seq. is a state law that regulates the conduct of collection agencies. In Michigan, debt collectors have to be licensed, and this statute ensures this. This statute contains many similarities to the federal Fair Debt Collection Act and those who engage in debt collection actions must follow both the state and federal laws.
What is prohibited?
Under this statute, a debt collector cannot collect debt in Michigan without being licensed. This statute is a licensing statute, and it prohibits misleading or deceptive communications, including misrepresentations that one is a licensed debt collector, attorney, and credit bureau. It also prohibits misrepresentations in regard to unlawful threats, publications, and other harassing or oppressive methods.
Who does the law apply to and how can consumers sue?
The statute applies to collection agencies that engage in debt collection actions. If a consumer is a victim of an unlawful debt collection action, they have the right to bring an action against the offending party.
What constitutes a collection agency, pursuant to the statute, does not include (the following is not an exhaustive list) a state or nationally chartered bank when it is collecting on its own claims; a licensed real estate broker or salesperson if the claims they are handling are related to or in connection with their real estate business; a public officer acting under a court order; a person acting under a court order; and an attorney who is handling claims and collections on behalf of their clients and also in the attorney’s own name; as well as some others.
What damages are consumers entitled to?
If the defendant is found guilty of violating this statute, they must provide a consumer with the greater amount between their actual damages or $50. Additionally, if the court believes that the violation was willfully conducted, the defendant may have to pay damages to a consumer of three times the amount of their actual damages or $150, whichever is greater, and the defendant would also have to pay for the consumer’s reasonable attorney’s fees and costs.
Mich. Comp. Laws §§ 445.251 through 445.258: What Is It?
Michigan Compiled Laws Chapter 445, Act 70 (“Collection Practices Act”) is a state law that regulates the conduct of collection agencies and creditors during collection processes. The Collection Practices Act provides protection to consumers by limiting the actions that collectors are allowed to engage in when attempting to collect a debt. Michigan’s Collection Practices Act contains many similarities to the federal Fair Debt Collection Act and those who engage in debt collection actions must follow both the state and federal laws.
What is prohibited?
Under the Collection Practices Act, there are a number of actions that a debt collector or regulated person is prohibited from engaging in during debt collection. For example, collectors cannot do the following actions which include, but are not limited to:
- Make a misleading statement to a consumer or conceal the purpose of a communication that is made in connection with a debt; and
- Misrepresent the legal rights of the consumer; and
- Misrepresent that a consumer may be arrested or that their property or wages may be garnished if they do not pay off a debt; and
- Communicate to a consumer that is actively being represented by an attorney; and
- Communicate information about a consumer’s debt to their employer; and
- Threaten to use violence or force to collect a debt; and
- Harass or abuse a consumer into paying a debt; and
- Cause a consumer’s phone to ring repeatedly or at inconvenient times.
Who does the law apply to and how can consumers sue?
The Collection Practices Act applies to collection agencies and creditors that engage in debt collection actions. If a consumer is a victim of an unlawful debt collection action, they have the right to bring an action against the offending party.
What damages are consumers entitled to?
If the defendant is found guilty of violating the Collection Practices Act, they must provide a consumer with the greater amount between their actual damages or $50. Additionally, if the court believes that the violation was willfully conducted, the defendant may have to pay damages to a consumer of three times the amount of the consumer’s actual damages or $150, whichever is greater, and the defendant would also have to pay for the consumer’s reasonable attorney’s fees and costs.
The statute of limitations period for debt in Michigan:
In Michigan, the statute of limitations period for most debt is six years. This means that creditors generally cannot sue a consumer in order to collect a debt that has been unpaid for more than six years. That said, different types of debt have different statute of limitations period. In Michigan, the statute of limitations period for auto loan debt is four years, for credit card debt is six years, for medical debt is six years, and for mortgage debt is six years. If a consumer promises to make a payment on the alleged debt, or makes even a small payment, it could potentially restart the clock on the statute of limitations.
Some of the places that a consumer can look to for help or answers to questions:
The laws and statutes discussed above can change. So, in the state that a consumer resides in, a consumer protection agency, the Office of the Attorney General, and/or a consumer protection attorney who is licensed in a consumer’s respective state can help a consumer in getting help, up to date information and interpretations, and/or with determining the answers to their questions in regard to the aforementioned laws. The Consumer Financial Protection Bureau can assist as well.