Needed Changes to the Michigan Consumer Protection Act
The Michigan Consumer Protection Act (MCPA) was enacted as a part of a national movement to provide remedies to consumers who were being taken advantage of by overreaching businesses. Businesses could engage in small scale frauds and cheats that would be impractical for consumers to sue over, but at the same time generate enormous profits when operationalized at scale. At the same time, there was a recognition that businesses had the the ability to keep attorneys or insurance policies in place that could be used as a deterrent to law suit. As a whole, because of their ability to absorb costs that could arise from fraud, there was no deterrent to stop the cheating. As a results states began passing consumer protection laws like the MCPA.
After its enactment, the MCPA function remarkably well, protecting consumers for almost thirty years. Its unique remedies and protections rendered it one of the most effective consumer statutes in the country. In the hands of one of the most skilled attorney generals in the country -- Frank Kelly -- the MCPA became a bulwark of protections for Michigan consumers.
However, in 1999, a republican majority of the Michigan Supreme Court undertook a judicial revision to the statute, effectively expanding the MCPA's exemptions beyond their intended scope, and excluding most businesses from the reach of the law. Under the new interpretation, virtually no business could be required to comply.
Since then the MCPA has become a Frankenstein statute. Legislators who wish to appear to take on difficult problems place provisions barring the bad conduct in the MCPA, safe in the knowledge that those provisions will have no conceivable impact on businesses.
The following is a listing of corrections needed to allow this statute to fulfill its mandate of protecting consumers.
- Remove the Exemption for Regulated Businesses.
- Add an affirmative defense that practices are lawful under another statute.
- Exemplary damages of not less than treble actual damages for willful violations.
- Make the failure to promptly effectuate a settlement an unfair act, with 30 days being presumptively untimely.
- Add insurance companies to the list of covered businesses.
- Add violation of any other law a violation of the MCPA.