Suppliers who take actions that are unfair, deceitful, or unconscionable or who fail to comply with the deposit requirements of the CSPA may be subject to extensive penalties.
A consumer who wins in an action against a supplier under the CSPA can choose from two remedies. First, the consumer can choose to undo the contract, surrender the goods or materials sold and obtain a full return on the purchase price. Second, the consumer can choose to actually recover the damages caused by the violation. This means that, for example, the consumer could recover the cost of either repairing or replacing the goods or materials. Under the Act, in cases in which it is shown that the act complained of had already been specifically prohibited by the Attorney General or a court decision, the consumer may recover three times the actual damages incurred. On top of these two options, the consumer may receive reasonable attorney’s fees if s/he can show that the supplier knowingly committed an act that violates the CSPA.
Damages under the Act can be huge. In fact, the Ohio Supreme Court held in Whitaker v. M.T. Automotive, Inc. that under the Ohio Consumer Sales Practices Act (CSPA), a consumer who is harmed by a supplier’s unfair or deceptive trade practices is entitled to recover both actual economic losses and noneconomic losses. In fact, the Court held that both economic and noneconomic losses can be tripled when the offense has been identified previously by a rule or a court decision as being deceptive or unconscionable.
In this case, the Summit County Court of Common Pleas found that M.T. Automotive, Inc. was guilty of multiple violations of the CSPA in its dealings with customer Craig Whitaker. Whitaker took “spot delivery” of a used pickup truck in October 2001 believing that he and the dealership had signed a binding lease agreement. A few days later, however, the dealership took back the truck and denied Whitaker a refund of his $1,500 down payment when he refused to sign a new, less-favorable lease.
Whitaker had sold his old truck and was without transportation for several weeks after the new vehicle was repossessed. He sued the dealership alleging multiple CSPA violations. A jury found that Montrose had engaged in 11 unfair and deceptive sales practices, and awarded Whitaker $105,000 in damages plus legal fees. This award was increased to $315,000 by the trial court under a provision of the CSPA that allows damages to be tripled.
This decision means that in Ohio, a supplier can be extensively punished for violating the CSPA and that consumers who are harmed when the CSPA is violated can receive extensive damages. As a result, suppliers are less likely to violate the CSPA and consumers are better protected.
Crumpton Law LLC is a Columbus Small Business Law Firm, with attorney Matthew Crumpton serving as managing member and lead attorney.
Tags: consumer sales practices act, cspa, ohio consumers, small business