Consumer Protection and The Consumer Protection Act
The Michigan Consumer Protection Act that passed in 1976 was one of the most powerful unfair and deceptive acts and practices (UDAP) statutes in the country. It prohibited 29 types of conduct as unfair and deceptive practices in trade or commerce. The Act served the Michigan consumer very well until 1999 when the Michigan Supreme Court became more conservative. In the Act's exemption section was the following:
This act shall not apply to:
A transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States.
The Michigan Supreme Court applied the above exemption clause very broadly and effectively gutted the Act. The Court explained its ruling as follows:
Contrary to the “common-sense reading” of this provision by the Court of Appeals, we conclude that the relevant inquiry is not whether the specific misconduct alleged by the plaintiffs is “specifically authorized.” Rather, it is whether the general transaction is specifically authorized by law, regardless of whether the specific misconduct alleged is prohibited.
Perhaps the legal reasoning of the Michigan Supreme Court is not easily understood. In plain English the Court ruled the Act did not apply to any business that is licensed or regulated. The result is quite clear. The Act is almost worthless and gives the consumer no relief or protection through the legal system and courts. The consumer's current option for remedial action is to take the complaint to a peer dominated state regulatory board where the harmed consumer usually fairs poorly.
The Michigan Consumer Protection Act can be re-written to modify or eliminate the section of the Act that the Supreme Court used to render the Act worthless, and again have viable protections for the consumer. This has not happened because the Republicans like the Act in its current worthless form. That is why it is important to elect someone like myself who will stand up for the consumer.
The framers of Michigan's 1963 Constitution did not have the consumer's best interest because they wrote that the majority of members of each regulatory board must be from the group the board regulates. It is the fox guarding the hen house. That is why consumers fair poorly when they bring complaints before these boards. I have proposed that the Michigan Constitution be amended so that it states that the majority of members of each regulatory board shall not be from the group the board regulates.
Ted Golden, M.D.
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