Vail Law: Fundamentals of the Colorado Consumer Protection Act
Vail, CO, Colorado
The Colorado Consumer Protection Act was enacted in 1969, but was little used, either in Vail, Colorado, or elsewhere in the state until the early 1990s. As such, was nearly relegated to obscurity. In the past decade and a half, however, the act has been applied with increasing frequency, gaining strength and applicability with each new court decision and each new legislative tweak.
The law is a “remedial” statute – that is, one intended to “remedy” injury or right a wrong. It is intended to deter and punish various deceptive trade practices committed by businesses dealing with the general public. The law contains various provisions attempting to describe those instances in which a “person” is deemed to have engaged in a deceptive trade practice. A “person” under the law, and generally at law, includes corporations, partnerships, trusts and any other legal or commercial entity.
The Colorado Consumer Protection Act addresses a panoply of prohibited business activities including telephone solicitations, time share sales, motor vehicle sales and buyers’ club memberships. Violations of the act have also been asserted in cases relating to false and misleading advertising.
The act also prohibits the omission of information intended to induce the consumer to enter into a transaction. In other words, if the advertiser leaves out information which may have made a difference in your decision to buy the advertiser’s product, the advertiser may be sued under the act.
Claims under the law have been asserted more and more in non-public, non-consumer undertakings, such as one-of-a-kind private transactions and personal injury cases, to which the act, at least theoretically, does not apply, including claims against physicians and insurance companies.
Ultimately the assertion of these actions culminated in a landmark Colorado Supreme Court in 1998, wherein the court determined that in order to advance a private claim under the act, five elements must first be established. These include: 1) the plaintiff must establish conduct by the defendant that constitutes a deceptive trade practice; 2) the deceptive trade practice must occur “in the course of such person’s business, vocation or occupation”; 3) the challenged practice must significantly impact the public as actual or potential consumers of the defendant’s goods, services or property; 4) the plaintiff must suffer injury to a legally protected interest; and 5) the plaintiff must be able to show that the defendant’s actions in violation of the Act caused the plaintiff’s injuries.
In determining whether a challenged practice significantly impacts the public as consumers, the court determined in another case that three factors must first be established. These include: 1) the number of consumers directly affected by the challenged practice; 2) the relative sophistication and bargaining power of the consumers affected by the challenged practice; and 3) the evidence that the challenged practice previously had impacted other consumers or had significant potential to do so in the future.
Is it fraud?
A distinction should be drawn been the Colorado Consumer Protection Act and fraud. The main distinction is in the numbers. In ordinary or common law fraud, generally the only person affected is the person involved in the transaction. However, the act is meant to address those circumstance where the fraudulent or deceptive practice can affect numerous members of the public.
Accordingly, a private singular transaction, such as the sale of a unique lot or house from one owner to another, should not be covered by the act unless the owner is in the business of selling real estate.
One of the big attractions to employing the act are the remedies potentially available. A person or business found to have engaged in a deceptive trade practices may be liable in an amount equal to three times the actual damages sustained, plus costs, plus reimbursement of the attorney fees incurred in bringing the action. A quick warning though: Any action under the act found to be “groundless and in bad faith or for the purpose of harassment,” may hit the plaintiff for the defendant’s attorney fees and costs.
There is also a longer statute of limitations under the act as compared to ordinary claims for negligence. Under the act, an action must be commenced within three years after the consumer discovers, or should have discovered, the false, misleading, or deceptive act or practice.
The consumer protection law was intended to protect the public against trade practices by merchants, salespersons, repair persons and other businesses. In its enactment, a quiet revolution was begun, with the consumer preeminently in mind.
Rohn K. Robbins is an attorney licensed before the Bars of Colorado and California who practices in the Vail Valley. He may be heard on Wednesday nights at 7 p.m. on KZYR radio (97.7 FM) as host of “Community Focus.” Robbins may be reached at 970-926-4461 or at his e-mail address: firstname.lastname@example.org
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