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What Rights Do I Have Under Maryland’s Consumer Protection Act?

The Consumer Protection Act insulates Maryland residents from abusive or fraudulent acts perpetrated by the sellers, purveyors and marketers of consumer goods. The Act not only provides redress through the court system for the victims of abusive, unfair, or deceptive practices but also provides one of the stronger enforcement tools available under Maryland law – the potential to recover attorney’s fees and litigation costs from the liable merchant if successful in the claim.

The History of Maryland’s Consumer Protection Act.

The law can be found at MD Code, Commercial Law, § 13-101, et seq. These provisions were enacted in 1975. The legislature, in adopting the Act, made certain findings in support of the legislation. The legislature specifically found that “ consumer protection is one of the major issues which confront all levels of government, and that there has been mounting concern over the increase of deceptive practices in connection with sales of merchandise, real property, and services and the extension of credit.” Moreover, the legislature found that, although a federal consumer protection statute had been on the books for some time, “improved enforcement procedures are necessary to help alleviate the growing problem of deceptive consumer practices” in Maryland, and that existing law “are inadequate, poorly coordinated and not widely known or adequately enforced.” Md. COMMERCIAL LAW Code Ann. § 13-102

What Is Maryland’s Consumer Protection Act?

A thorough understanding of the reach of Maryland’s Consumer Protection Act begins with an understanding of the practices which it was designed to prohibit, and punish. The act targets merchant conduct that is “abusive”, “unfair” or “deceptive”, and provides a fairly exhaustive list of activities that may meet one or more of those definitions, including but not limited to:

  • “False, falsely disparaging, or misleading oral or written statement, visual description, or other representation of any kind which has the capacity, tendency, or effect of deceiving or misleading consumers”
  • “[A] representation that [c]onsumer goods, consumer realty, or consumer services have a sponsorship, approval, accessory, characteristic, ingredient, use, benefit, or quantity which they do not have”
  • “[A] representation that a merchant has a sponsorship, approval, status, affiliation, or connection which he does not have.”
  • “[A] representation that [d]eteriorated, altered, reconditioned, reclaimed, or secondhand consumer goods are original or new.”
  • “[A] representation that [c]onsumer goods, consumer realty, or consumer services are of a particular standard, quality, grade, style, or model which they are not.”
  • “Failure to state a material fact if the failure deceives or tends to deceive”
  • “Disparagement of the goods, realty, services, or business of another by a false or misleading representation of a material fact”
  • “Advertisement or offer of consumer goods, consumer realty, or consumer services [w]ithout intent to sell, lease, or rent them as advertised or offered”.
  • “Advertisement or offer of consumer goods, consumer realty, or consumer services:
  • [w]ith intent not to supply reasonably expected public demand, unless the advertisement or offer discloses a limitation of quantity or other qualifying condition”.
  • “False or misleading representation of fact which concerns the reason for or the existence or amount of a price reduction”.
  • False or misleading representation of fact which concerns [a]price in comparison to a price of a competitor or to one's own price at a past or future time”.
  • “Knowingly false statement that a service, replacement, or repair is needed”.
  • “False statement which concerns the reason for offering or supplying consumer goods, consumer realty, or consumer services at sale or discount prices”
  • “Deception, fraud, false pretense, false premise, misrepresentation, or knowing concealment, suppression, or omission of any material fact with the intent that a consumer rely on the same in connection with [t]he promotion or sale of any consumer goods, consumer realty, or consumer service”.
  • “Deception, fraud, false pretense, false premise, misrepresentation, or knowing concealment, suppression, or omission of any material fact with the intent that a consumer rely on the same in connection with [a] contract or other agreement for the evaluation, perfection, marketing, brokering or promotion of an invention”.
  • “Deception, fraud, false pretense, false premise, misrepresentation, or knowing concealment, suppression, or omission of any material fact with the intent that a consumer rely on the same in connection with [t]he subsequent performance of a merchant with respect to an agreement of sale, lease, or rental”
  • “Solicitations of sales or services over the telephone without first clearly, affirmatively, and expressly stating [t]he solicitor's name and the trade name of a person represented by the solicitor’>
  • “Solicitations of sales or services over the telephone without first clearly, affirmatively, and expressly stating the purpose of the telephone conversation; and [t]he kind of merchandise, real property, intangibles, or service solicited”.
  • “Use of any plan or scheme in soliciting sales or services over the telephone that misrepresents the solicitor's true status or mission”.
  • “Use of a contract related to a consumer transaction which contains a confessed judgment clause that waives the consumer's right to assert a legal defense to an action”.
  • “Use by a seller, who is in the business of selling consumer realty, of a contract related to the sale of single family residential consumer realty, including condominiums and town houses, that contains a clause limiting or precluding the buyer's right to obtain consequential damages as a result of the seller's breach or cancellation of the contract”.

          -Source: MD Code, Commercial Law, § 13-301

What are other unfair, abusive or deceptive practices?
Maryland law further provides that violations of the following may be subject to the Act:
" (14) Violation of a provision of:
(i) This title;
(ii) An order of the Attorney General or agreement of a party relating to unit pricing under Title 14, Subtitle 1 of this article;
(iii) Title 14, Subtitle 2 of this article, the Maryland Consumer Debt Collection Act;1
(iv) Title 14, Subtitle 3 of this article, the Maryland Door-to-Door Sales Act;2
(v) Title 14, Subtitle 9 of this article, Kosher Products;
(vi) Title 14, Subtitle 10 of this article, Automotive Repair Facilities;
(vii) Section 14-1302 of this article;
(viii) Title 14, Subtitle 11 of this article, Maryland Layaway Sales Act;3
(ix) Section 22-415 of the Transportation Article;
(x) Title 14, Subtitle 20 of this article;
(xi) Title 14, Subtitle 15 of this article, the Automotive Warranty Enforcement Act;4
(xii) Title 14, Subtitle 21 of this article; (xiii) Section 18-107 of the Transportation Article;
(xiv) Title 14, Subtitle 22 of this article, the Maryland Telephone Solicitations Act;5
(xv) Title 14, Subtitle 23 of this article, the Automotive Crash Parts Act;6 (xvi) Title 10, Subtitle 6 of the Real Property Article;
(xvii) Title 14, Subtitle 25 of this article, the Hearing Aid Sales Act;7
(xviii) Title 14, Subtitle 26 of this article, the Maryland Door-to-Door Solicitations Act;8
(xix) Title 14, Subtitle 31 of this article, the Maryland Household Goods Movers Act;9
(xx) Title 14, Subtitle 32 of this article, the Maryland Telephone Consumer Protection Act;10
(xxi) Title 14, Subtitle 34 of this article, the Social Security Number Privacy Act;11
(xxii) Title 14, Subtitle 37 of this article, the Online Child Safety Act;
(xxiii) Section 14-1319, § 14-1320, or § 14-1322 of this article;
(xxiv) Section 7-304 or § 8-801 of the Criminal Law Article;
(xxv) Title 7, Subtitle 3 of the Real Property Article, the Protection of Homeowners in Foreclosure Act;
(xxvi) Title 6, Subtitle 13 of the Environment Article;
(xxvii) Section 7-405(e)(2)(ii) of the Health Occupations Article; (xxviii) Title 12, Subtitle 10 of the Financial Institutions Article;
(xxix) Title 19, Subtitle 7 of the Business Regulation Article;
(xxx) Section 15-311.3 of the Transportation Article; (xxxi) Section 14-1324 of this article; (xxxii) Section 14-1326 of this article;
(xxxiii) The federal Military Lending Act; (xxxiv) The federal Servicemembers Civil Relief Act; or
(xxxv) § 11-210 of the Education Article; or (15) Act or omission that relates to a residential building and that is chargeable as a misdemeanor under or otherwise violates a provision of the Energy Conservation Building Standards Act,12 Title 7, Subtitle 4 of the Public Utilities Article.” Source: MD Code, Commercial Law, § 13-301

When Does The Consumer Protection Act Apply?

The Act prohibits unfair, abusive or deceptive activity in 6 settings:

  • “A [T]he sale, lease, rental, loan, or bailment of any consumer goods, consumer realty, or consumer services.”
  • “The offer for sale, lease, rental, loan, or bailment of consumer goods, consumer realty, or consumer services”.
  • “The offer for sale of course credit or other educational services”.
  • “The extension of consumer credit”.
  • “The collection of consumer debts”.
  • “The purchase or offer for purchase of consumer goods or consumer realty from a consumer by a merchant whose business includes paying off consumer debt in connection with the purchase of any consumer goods or consumer realty from a consumer”.

     -Source- Md. COMMERCIAL LAW Code Ann. § 13-303, 13-408

Maryland’s Consumer Protection Act is sweeping in its scope and facially applies to essentially every conceivable common transaction between a consumer and a merchant The Act provides several key definitions that delineate the reach of the Act. A “consumer” is  “an actual or prospective purchaser, lessee, or recipient of consumer goods, consumer services, consumer realty, or consumer credit”. Although the act by its terms applies to real estate and credit applications and transactions, the focus of this article in on its applicability to the sale and advertisement of “consumer goods” which are turn defined as goods and services “which are primarily for personal, household, family, or agricultural purposes.” Md. COMMERCIAL LAW Code Ann. § 13-101. Furthermore, “[i]n general, items are "goods" if they are movable at a relevant point in time. See Md.Com.Law Code Ann. § 2-105(1) ("Goods" means all things ... which are movable at the time of identification to the contract for sale ..."); § 9-105(h) ("Goods" includes all things which are movable at the time the security interest attaches ..."). Morris v. Osmose Wood Preserving, 639 A.2d 147, 99 Md.App. 646 (Md. App. 1993). The nature of good can change over time, depending on who holds the goods, and the nature of the transaction. For example, a radio in the hands of a retailer may be inventory when purchased from a wholesaler, but a “consumer good” in the hands of the ultimate purchaser. Likewise, building materials that are incorporated into a structure are not “consumer goods, but those same materials, if sold to a “do -it -yourselfer” at a home improvement store may be. See, generally, Morris, supra.

The Act carves out exceptions, or exemptions for certain classes, or categories of providers of goods and services to whom the act does not apply, including:

  • "a certified public accountant
  • architect
  • clergyman
  • professional engineer
  • lawyer
  • veterinarian,
  • insurance company authorized to do business in the State
  • insurance producer licensed by the State
  • Christian Science practitioner
  • land surveyor
  • property line surveyor
  • chiropractor
  • optometrist
  • physical therapist
  • podiatrist
  • real estate broker,
  • associate real estate broker
  • real estate salesperson
  • medical or dental practitioner
  • a public service company
  • television or radio broadcasting station or a publisher or printer of a newspaper, magazine, or other form of printed advertising who broadcasts, publishes, or prints an advertisement which violates this title”. [The exemption will not apply where the publisher or broadcaster has actual knowledge that the advertisement violates the Act, and publishes it anyway].   
  • “[T]he professional services provided by a health care provider”

     -Source: MD. COMMERCIAL LAW, § 13-104

Those exempted from the reach of the act are professionals who are subject to standards of malpractice within their own disciplines [ e.g. legal malpractice, medical malpractice], and may work in an industry that has its own rules and regulations regarding advertising restrictions. For example, lawyer advertising is likely the single most regulated commercial activity in the country.

What Remedies Do I Have Under the Consumer Protection Act?

The law provides that an injured consumer may ask the Consumer Protection Division of the Maryland Attorney General to enforce their rights under the statute. The Act also provides for hefty civil fines – up to $10,000 and $25,000 for subsequent offenses- and criminal sanctions – generally, a misdemeanor carrying up to one year in jail -for those who run afoul of its provisions. Perhaps one of the most valuable provisions in the Act is the creation of a private right of action for an injured consumer to pursue damages for injury or loss occasioned by an unfair, abusive or deceptive trade practice. The difference between these options may be found in the nature of the harm to the consumer. If there has been an unfair trade practice, but no objectively verifiable injury to the consumer, an action through the Attorney General is the only option. Where, however, the consumer has suffered actual harm, they may pursue a private right of action and seek compensation for their losses.

"Notwithstanding the availability of both public and private remedies to consumers, the Legislature has established a clear distinction between the elements necessary to maintain a public enforcement proceeding versus a private enforcement proceeding, In a public enforcement proceeding any practice prohibited by this title is a violation .. . whether or not any consumer in fact has been misled, deceived, or damaged as a result of that practice." § 13-302. In contrast, a private enforcement proceeding pursuant to § 13-408(a) expressly only permits a consumer "to recover for injury or loss sustained by him as the result of a practice prohibited by this title." § 13-408(a). Section 13-408(a), therefore, requires an aggrieved consumer to establish the nature of the actual injury or loss that he or she has allegedly sustained as a result of the prohibited practice. This statutory construction creates a bright-line distinction between the public enforcement remedies available under the CPA and the private remedy available under § 13-408(a).” Lloyd v. General Motors Corp., 916 A.2d 257, 397 Md. 108 (Md. App. 2007)

While the creation of a private right of action is key, litigation is expensive, and if the amount of the claim is relatively small, an injured consumer may well choose to forego litigation because of economic, rather than substantive, considerations. For this reason, the Act providers one of the more powerful enforcement, and deterrent mechanisms under the law: “fee shifting”. In traditional American litigation, each party is responsible for their own counsel fees and attendant costs. This is only altered where a rule, statute or contract provides that the losing side pays not only its litigation expenses, but also those of the prevailing party. This is known as fee shifting. The Act provides this mechanism, which allows injured consumers,  who may not have the financial wherewithal to pursue private litigation, to hire the lawyer of their choosing to vindicate their rights in a court of law.