Ohio Consumer Law Blog

Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice

Day Care Centers may be Violating Ohio Law and Ripping Off Consumers During the COVID-19 Health Crisis.


For homes with working parents who are now forced to work from home, I empathize.  My wife and I are working from home with a toddler and an infant.  We have all been feeling the stress of working while also being a teacher, cook, referee, and parent at literally the same time, and you have to manage tighter finances and an overall fear of what’s to come.  If you’re like me, you end up getting less done during the day and more done when your kids are asleep.  1:00am is the new 3:00pm…

I’d hate to add one more thing to your parental-worry list, but we need to talk about not getting ripped off during this public health crisis.  I want to warn you about different situations I’ve been seeing and hearing about over these coming weeks.  In this post I will tell you about the businesses you need to be particularly careful around:  day cares.

DAY CARE CENTERS CAN BE GREEDY, TOO

First, let’s talk about day cares.  My kids’ day care, like all other Ohio non-pandemic-licensed ones, closed March 25, 2020.  Our day care had already told us no payments are owed while they are shut down, and everyone is welcome back when it is over.  They even sent us helpful weekly lesson plans recently.

Other day cares have not been as forthright or helpful, and some are breaking their contracts with parents and changing payment terms.  This can be illegal and may violate Ohio’s Consumer Sales Practices Act.  We’ve received reports, emails, and evidence from multiple clients and friends that some day cares are still going to charge while they are closed.  Some are charging a reduced rate, some the full rate, and others are crediting back this money towards future bills.  But in many of these scenarios, this is not only a breach of the enrollment agreement, it is an unfair or deceptive act that violates Ohio’s Consumer Sales Practices Act.  And the economic cost, the stress, and the threat of losing one’s place at the center, can be a big burden to parents at this time.

One email that I’ve seen implies that if parents pay a substantial “re-enrollment deposit” toward May’s bills right now (by or before April 1st), then the center can retain the teachers, the children will have a spot saved, the center won’t give it away to another family, and they will credit it towards May’s bills.  This email is, at best, misleading.

First, the centers are not being entirely honest.  Most centers have already informed their teachers that it is laying them off so they can collect unemployment.  That cuts out a huge operating expense for these businesses.  Second, why are they forcing parents to pay May bills in advance when the enrollment agreement clearly says payment for a month (or week) is not due until the first of the month or during that week of enrollment?  Third, why are these centers threatening parents with losing their spots and kicking them out unless they agree to these payment term changes?  They are literally threatening to breach the enrollment agreement unless parents let them breach the enrollment agreement.  It may violate the enrollment agreement for the center to demand payment before it is due, i.e. unilaterally changing the payment terms.  And some centers have the audacity to prey on parental fears of not having somewhere to send their kids on the other side of this crisis.  These centers with anti-bullying policies are trying to threaten and bully parents into handing over their paychecks or unemployment checks.

Most importantly, if the center does not have the money just to pay its facility and non-labor operating expenses for a month, what guarantee do you have that it will re-open in May, or later, if the lockdown order lasts longer.  These places demanding the money are in precarious financial situations, but they aren’t being honest about it.  So, if you pay the money, the center could still close, you could still “lose your spot” and have to find a new day care, and you might be out your $500, $700, or $1500+ deposit, too.  Keep that in mind even if you think you want to financially support your center.  Your support may not be enough and then you’ll be out the money and looking for a new day care.

YOUR RIGHTS

The good news is that Ohio consumer protection laws provide some protections here.  If your day care center does any of the following, then you really should consider talking to an attorney before it is too late.

First, Ohio law makes it illegal for a company to knowingly breach its contract (including knowingly changing payment terms).  Not only is this a breach of contract, it can be unfair, deceptive, or unconscionable conduct that violates your consumer rights under the Consumer Sales Practices Act.

Second, Ohio law makes it illegal for a company to take payment for services without disclosing to consumers that the company is actually in a precarious financial situation, which could jeopardize its ability to perform the services.

Third, Ohio law makes it illegal for a company to take a deposit payment and not perform or deliver the promised services within eight weeks.  If this lockdown order or day care closure order is extended to the end of May (which is looking more likely based on Dr. Acton’s and Gov. DeWine’s statements every day at 2pm), and parents are paying these deposits right now, these day cares have to offer to refund the money when they know they cannot deliver the services within eight weeks of the deposit payment.  If they don’t refund the money or offer refunds at that time, then they are violating Ohio law.

Fourth, it is also illegal for a company to charge consumers in a transaction when the consumers are not likely to receive a substantial benefit from the purchased services.  Here, if the day cares fail to deliver on the services, or are charging for enrollment when literally no one is allowed to be enrolled, then they are likely committing this unfair or deceptive act.

There are other consumer protections that apply to parents in these situations, but there are the most common issues that arise in the calls I have taken over the past two weeks.  If you want to talk with other parents or an attorney about your day care, feel free to leave a comment on this post, or share this story with others, and get the word out, so people can protect themselves and avoid bad situations at this time.

It’s not your job to financially float a business that failed to save up money for expenses in times like these.  Consumers are constantly told to save up three months of expenses.  Why didn’t these businesses do the same?  Why are they looking to you for an interest free loan?  What gives them the right to breach your enrollment agreement and threaten to kick your kid out of the school and cause you and your child extreme emotional stress and anguish (child’s permanent loss of friends, you having to locate a new day care when all day cares are closed, etc.) if you don’t hand over the money?

They’re hoping you don’t know your rights; they’re hoping you don’t read and share articles like this.

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This entry was posted on April 1, 2020 by in By Daniel Myers, Consumer Law, COVID-19, Ohio and tagged , , , .

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