A strengthening of the Massachusetts’ Consumer Protection Act will affect both consumers and small businesses from September 2 this year. This article explains how the new regulations clarify how the total cost of goods and services provided by businesses within the state must be clearly displayed to potential consumers before they commit to paying for them. The rules target what are called “junk fees”. These are extra costs attached to a purchase which were not made clear before the purchase was made. Examples of junk fees are costs that were not included in the initial advertising, surprise additions, or unnecessary additional costs, often only noticed by purchasers after they have been billed.
How the Consumer Protection Act works
The Massachusetts Consumer Protection Act (MCPA), as codified in Massachusetts General Law Chapter 93A, is designed to protect individual consumers from unfair or deceptive behavior by businesses. It is not limited to individuals as businesses can also use the Act in the event that they have experienced unfair or deceptive behavior by other businesses.
There is an established procedure for legal action that can be taken if a breach of the MCPA has been experienced. Individuals and businesses are allowed to sue the offending business and obtain compensation for any losses they have experienced. Initially, a 30 day demand letter is sent to the business, detailing the reason for the complaint and providing the business an opportunity to resolve the complaint before the offended party files a lawsuit against the business. More details about the legal process involved in a Chapter 93A complaint are provided further below.
What the new junk fee law will do from September 2 will be to clarify the responsibilities of businesses to be upfront about the total costs of products or services they provide. Failure to do so will leave them open to accusations that they have acted unfairly or deceptively and therefore potentially make them liable to Chapter 13A civil lawsuits against them.
What exactly are junk fees?
Junk fees are the additional costs added on to the advertised cost of a products or service which is not stated clearly before the customer decides to make a purchase. Whether these “hidden” extra costs have been omitted deliberately or not, the new ruling will prohibit them. Businesses must familiarize themselves with the new legislation and ensure that they are compliant from the date the rules come into effect or expose themselves to legal action against them by aggrieved consumers.
Examples of fees that must soon be displayed or clearly stated to customers include all mandatory costs, with the exception of state sales taxes. The specific costs which have often been hidden vary from business to business. For example, a hotel chain may have an extra “towel fee” which now must be included in the total up-front cost so customers know what they are paying for. Extra credit card fees, when credit card payments are the only payment option, must be included in the total price.
Basically, as long as the extra fees charged are those that are mandatory or expected to be paid, these will now have to be included in the total cost clearly advertised by the business.
What businesses may not have to reveal
Some exceptions to the new junk fee rules include state taxes as has already been mentioned. Shipping costs, which are typically adjusted to the location and item specifics before being added also do not have to be included in the total. If a service has options, then the cost of all the options do not necessarily need to be displayed, but if a customer chooses a particular option, the total price of those options must be stated before the payment is made.
In addition to the amount of an extra cost, its purpose and nature must also be clearly displayed. If the charges are optional or can be waived, this must also be stated, with clear instructions about how to choose options or avoid a payment.
Dates indicating before which a product or service can be canceled must be displayed up front. When the purchase involves a subscription or recurrent charge, any expected future increase in charges must be indicated up front.
Penalties for a breach of the state’s Consumer Protection Act
Anyone who believes that they are the victim of unfair or deceptive behavior by a business, including not displaying total costs of a product or service after September 2, has the right to pursue a claim against the business through a civil lawsuit. The normal sequence of legal action is as follows:
- The aggrieved party sends a Chapter 93A demand letter to the business at least 30 days before filing any claim. The demand letter must include as much information as possible explaining the reasons for their complaint, including: their full name and address, why they regard the behavior was unfair or deceptive, how they were impacted negatively and what they are demanding in compensation.
- The business must investigate the complaint and respond within the 30 day deadline. Failure to respond may mean that the complainant files a lawsuit and the business is forced to pay the compensation demanded by the court. A response may also avoid penalties through an attempt at mediation or an apology and settlement of the complaint that avoids a lawsuit or court appearance.
- If the complainant decides to file a MCPA claim against the business and the court finds that the business has deliberately acted in bad faith, then it may penalize the business by imposing double or treble the amount demanded plus payment for legal fees, including court costs.
Advantages of hiring a Boston business law attorney
Whether you have a genuine complaint about a business because you believe they have breached the Consumer Protection Act, or you are a business defending yourself against a claim made against you, it is advisable that you contact a business law attorney with experience in MCPA claims for legal help.