Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
Please Note: This post is the first in a three part series on this new Right to Cure Amendment. The next two posts will discuss practical tips for consumers, and then businesses, to protect themselves and benefit the most under this new law.
Earlier this year, the Ohio General Assembly passed, and Governor Kasich signed, HB 275–the “Right to Cure Amendment” to the Consumer Sales Practices Act (“CSPA”). These changes significantly weaken the traditional consumer protections found in the CSPA. The Right to Cure Amendments create a “poison pill” that can reduce a consumer’s remedy against a supplier to only 1/3 of the amount currently available to consumers.
In order to understand these changes, it is important to understand the current law. The CSPA applies to most transactions between consumers and businesses. When a business sells something to a consumer for personal, family, or household use, that sale is usually governed by the rules and regulations of the CSPA. There are a few exceptions to this rule. The CSPA does not apply to transactions a consumer has with a doctors, insurance providers, lawyers, and some other similar businesses.
The CSPA protects consumers from unfair, deceptive and unconscionable sales practices by setting strict rules for businesses to follow, and allowing consumers to file a lawsuit against businesses when they violate the law. Many times, consumers are entitled to recover three times (3x) their actual damages, or $200 per violation of the law. The CSPA also allows consumers to collect their attorney fees from bad businesses.
The CSPA prohibits businesses from doing certain things. For example, depending on the type of purchase and the type of business you are dealing with, the following might be prohibited:
The CSPA also mandates that businesses take certain actions, including:
There really is no end to either list. Not only are there specific requirements written in the lengthy statute itself, but there are also hundreds of specific regulations enacted by the Attorney General and thousands of cases where Ohio courts have added to the requirements. It is critical for businesses to retain an attorney to navigate the consumer minefield–the law changes so often and these changes are published in so many different places that it is next to impossible for the “do-it-yourselfer” to keep track of everything.
The Right to Cure Amendments allow businesses the opportunity to significantly reduce a consumer remedy in a lawsuit. Once a consumer files a lawsuit and it is served on the business, the business has thirty days to put together a compromise, called a “Cure Offer,” for the consumer. This Cure Offer must promise an amount of money to be paid to the consumer, plus the costs of the action and reasonable attorney fees not to exceed $2,500. If the consumer accepts the offer, then the case is settled. Before rejecting the offer, the consumer has to take extra care.
If the consumer rejects the offer and later a court awards the consumer the same amount or less in “actual damages” (not including attorney fees or triple damages) as was offered in the Cure Offer, the consumer cannot recover triple damages, and cannot get the bulk of its attorney fees from the guilty business. The rejection can poison the case for the consumer, making it practically necessary to retain the advice of an attorney instead of filing the suit by yourself.
Here’s how it could play out in the real world. Roofer comes to Mr. & Mrs. Homeowner to offer to fix their roof after it suffered hail damage. Mr. & Mrs. Homeowner hire Roofer to do the work for $10,000. Roofer does the work, but leaves the roof worse off than it started, causing water damage to the home. The Homeowners have to hire another contractor to fix the water damage and roof, costing them $30,000. They sue the Roofer, what can they get?
Under the current/old law, the Homeowners are likely entitled to $30,000 in actual damages, plus an additional $60,000 in triple damages, plus their attorneys fees and court costs. Overall, they are looking at recovering around $100,000.
Under the Right to Cure Amendment, if the Roofer offers them $30,000, and they take it, they will recover, at most, around $32,500. If they reject the offer, and go to trial, they will only recover $32,500. That’s nearly a $70,000 difference!
Because this law fundamentally changes the way consumers and business should approach these cases, it is important to (1) set yourself up to be in the best position you can, and (2) speak to an attorney early, before the matter goes to trial.
In our next post in this series, I will tell consumers the Do’s and Don’ts under this new law. In the third post, I will tell businesses their Do’s and Don’ts under the new law. Follow this Blog to get an email with the new posts when they go up!
Daniel J. Myers, Esq.