The Tennessee Consumer Protection Act
June 4, 2014
A Bit of Background
These days, there still seems to be a bit of confusion about the TCPA, because there was a bit of media chatter (perhaps not enough), last year, about the TCPA getting “nerfed,” so to speak. In March of 2013, Don Barexa summarized the changes well on his blog:
The 2011 tort reform legislation implemented several changes to the TCPA, such as eliminating a private right of action for unfair acts or deceptive practices involving the marketing or sale of securities. The TCPA was also amended to specifically prohibit class action lawsuits for alleged TCPA violations and to exempt the insurance industry from TCPA coverage. …
The most significant change in 2011 was the elimination of the right to bring a private action for a violation of the “catch-all” provision found at Tenn. Code Ann. § 47-18-104(b)(27). This provision makes it a violation of the TCPA to engage “in any other act or practice which is deceptive to the consumer or to any other person.” Prior to the effective date of the amendment, this “catch-all” was often used as the basis to allege a TCPA violation where the actions of the defendant did not violate one of the specifically proscribed unfair or deceptive acts listed in the TCPA. The 2011 amendment provides that the “catch-all” provision is now only enforcable by the Tennessee Attorney General.
Before I dive into a discussion of today’s TCPA, here are a few interesting facts about the Tennessee Consumer Protection Act (or “TCPA”).
- The TCPA is codified at Tennessee Code Annotated (T.C.A.) § 47-18-104.
- T.C.A. § 47-18-104 lists around fifty (50) “unfair” or “deceptive” acts or practices that affect the conduct of trade or commerce in Tennessee.
- A person who violates the TCPA is a “Class B misdemeanant,” meaning they are guilty of a Class B misdemeanor.
- A Class B misdemeanor is punishable by a jail sentence of not greater than six (6) months or
- A fine not to exceed five hundred dollars ($500), or
- Or both, unless otherwise provided by statute.
- Criminal prosecutions are rarely brought for violations of the TCPA; so violators are typically at greater risk of civil liability.
If you believe a business has violated the TCPA, you can report the alleged violation with the Consumer Affairs Division of the Tennessee Department of Commerce and Insurance. Their contact information is:
500 James Robertson Pkwy
Nashville, TN 37243-0600
Business Hours: Monday through Friday, 7:00 AM – 5:00 PM CST
The State of Tennessee, through the above-named office, can bring charges for a criminal violation of the TCPA, but, as I said, above, that rarely happens. More commonly, if a person has suffered a loss because of a person’s (or a business’s) violation of the TCPA, they file a lawsuit to recover money damages from the violator. A person who suffers a loss “may bring an action individually”–that is, they may file a lawsuit–“to recover actual damages.” Tenn. Code Ann. § 47-18-109(a)(1). Perhaps more concerning to those facing a TCPA lawsuit, a willful or knowing violation can result in the trebling (tripling) of actual damages. Tenn. Code Ann. § 47-18-109(a)(3).
If one prefers to seek punitive damages, he can opt to do so, but seeking punitive damages will prevent you from getting treble damages–it’s one or the other, but not both. As a client, you need to tell your attorney which you prefer; as an attorney, you need to make sure you clearly understand whether your client prefers treble damages or punitive damages. Concrete Spaces Inc. v. Sender, 2 S.W. 3d 901 (Tenn. 1999).
If you are accused of violating the TCPA, you need to make sure that, if it is available to you, you must plead with particularity the affirmative defense of fraud, under Tennessee Rule of Civil Procedure 9.02. It could be argued a TCPA violation constitutes fraud. Humphries v. West End Terrace, Inc., 795 S.W.2d 128 (Tenn. App. 1990). If your business is being sued for fraud, or if you believe you have a fraud claim against a business, including–perhaps, a claim related to a TCPA violation–you need legal counsel.
You especially need to seek legal counsel and should consider preventive legal services if your business is in one of the industries concerned with providing goods or services specifically mentioned in the TCPA, including but not limited to providing goods or services related to: beauty pageants, health clubs, buyers’ clubs, unsolicited merchandise, credit services businesses, personal services, water treatment devices, kerosene and motor fuels quality inspection, consumer protection warranty extensions, consumer telemarketing protections, employment agencies, wireless telecommunication devices, identity theft deterrence, unsolicited loans, and structured settlements. The TCPA has specific provisions that related to these and other industries, beyond the fifty or so provisions that apply to all commerce and trade in Tennessee.
Tort reform has nerfed some TCPA claims, but a violation of the TCPA can be crippling to a business. It is crucial that businesses take a proactive approach to regulatory compliance by having preventive business legal services. Strategic use of preventive business legal services can reduce the chance that your business will suffer a loss relating to a violation of the TCPA that would be far more expensive than the cost of the preventive business legal services.
To get started with preventive business legal services from Executive Legal Professionals, call us today at (615) 669-6566 or drop us a line, and we will follow up with you as soon as we can. If you’d like to schedule a no-obligation consultation with Noel Bagwell, our Founder & President, just click the button on the right. Mr. Bagwell would love to have an opportunity to meet with you to discuss (1) how preventive legal services from Executive Legal Professionals differ from traditional business legal services and from the “prepaid legal” or “legal insurance” products about which you might have heard and (2) how ELP can customize a preventive business legal services plan to fit your business’s unique needs. Click or call today!
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