Testimony before Joint Committee on the Judiciary
Dear Chairman Creedon, Chairman O’Flaherty and members of the Joint Committee on the Judiciary:
As organizations and consumer advocates who represent consumer interests throughout the Commonwealth, we urge the Joint Committee on the Judiciary to reject S. 919, a bill that would severely weaken consumer rights in Massachusetts.
This bill would turn back the clock on consumer protection over a quarter of a century by once again requiring an out-of-pocket loss of money in order for a consumer to collect damages under the state Consumer Protection Act, Chapter 93A. It would also eliminate consumers’ rights to join together to fight unfair practices.
S. 919, like the pre-1979 consumer protection act itself, incorrectly assumes that if there is no money lost, there is no injury. The fact is many consumer wrongs do not result in monetary losses. For example:
• If a landlord enters your apartment without your permission, you do not lose money.
• If a telemarketer interrupts your dinner despite your being on the do not call list, you do not lose money.
• If an unsafe product is missing a warning label and a child is injured, there is not necessarily a loss of money.
• If your financial data is stolen from a credit card company because of inadequate security, causing a risk of identity theft for cardholders, there is not necessarily a loss of money.
• If a debt collector harasses or threatens you in repeated phone calls, you do not lose money.
• If you continue to get unsolicited spam or faxes, you do not lose money.
• If a retailer uses bait and switch advertising to get you into a store, you do not lose money.
All these practices are illegal under Chapter 93A, but under the provisions of S.919, the victimized consumer would not be able to hold the perpetrators liable for damages. Worse, without the threat of enforcement via lawsuits for damages, those who engage in these illegal practices have little deterrent from continuing or expanding their wrongdoing.
The purpose of many consumer laws is to disclose information clearly and truthfully so the consumer can make better buying decisions, or understand his or her rights. Other consumer laws are designed to protect privacy, unwanted intrusions, freedom from harassment, or unsafe products. By their very nature, violations of these laws do not result in a loss of money, so to require such a showing in order to right these wrongs, creates an insurmountable hurdle.
This bill would give a green light to those who would engage in false advertising, debt collection harassment, telemarketing abuses, invasions of privacy, and other abuses that do not result necessarily in monetary losses.
Consumer laws are only as effective as their enforcement mechanisms. The limited resources of the Attorney General’s Office prevents it from seeking redress for all wrongs. Therefore, a secondary means – the private lawsuit – is needed as an additional layer of deterrence. Without it, consumers are left with rights that have no remedies, and that threatens the continued existence of those very rights. By outright elimination of class action suits, even where a loss of money has occurred, the bill handicaps individual consumers who alone do not have the resources to fight powerful, well-financed corporations for consumer wrongs.
Finally, the retroactive provision of the bill (which may be unconstitutional) will have the effect of dismissing active cases of alleged wrongful conduct, thus giving the companies involved amnesty for their past violations, and leaving injured consumers with no avenue for redress.
We urge you to reject S. 919, which will irreparably weaken consumer rights by undermining enforcement of many of the state’s consumer laws and regulations.
Very truly yours,
Edgar Dworsky, Consumer World, 617-666-5958
Deirdre Cummings, MASSPIRG, 617-292-4800
Paul Schlaver, Massachusetts Consumers’ Coalition, 617-349-6152
Stuart Rossman, National Consumer Law Center, on behalf of it’s low income and elderly clients, 617-542-8010