Consumer protection law regulates the financial relationship between individual consumers and the businesses that sell goods and services, such as loans, mortgages, and other forms of credit. All consumer protection laws are intended to hold businesses responsible for fraudulent, unfair, and deceptive practices. There are a variety of laws at both the federal and state levels that regulate consumer affairs. In Minnesota, individual consumers and groups of consumers may bring private suits to enforce the rights guaranteed by Minnesota's numerous consumer protection laws.
We're currently investigating certain legal issues related to reverse mortgages. If you have questions or concerns about a reverse mortgage, please contact us at 612-436-9018.
What are some examples of "consumer law?"
- Common law fraud
- Unfair and deceptive trade practice statutes
- Consumer credit and lending laws
- Statutes regulating loans and mortgages
- Consumer warranty law
- Equal access to credit/credit discrimination
- Fair credit reporting
- Debt collection abuses
- Bankruptcy
Predatory Lending
One especially prevalent and troubling form of unfair business activity is predatory lending, which typically refers to the practice of a lender using deception to convince unassuming borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to fight back. A financial service provider making predatory loans may systematically fail to disclose the true terms and conditions of the borrower's financial obligations or otherwise conceal the risks from the borrower; other illegal practices include excessive fees, abusive prepayment penalties, unnecessary products, and mandatory arbitration of any disputes. Unwary consumers subjected to these loans frequently go through devastating foreclosures. Although predatory lending is most often used in the context of home financing, the term also applies to payday loans, credit cards or other forms of consumer debt, and overdraft loans, when the interest rates are considered unreasonably high.
Consumer Fraud and Deceptive Trade Practices
The Federal Trade Commission regulates federal laws designed to prohibit a series of specific practices prohibited in interstate commerce. The Minnesota Deceptive Trade Practices Act governs commercial transactions involving a consumer purchasing or leasing goods or services for personal, household, or family purposes. The Act protects consumers against deceptive, unfair, fraudulent, and unconscionable practices intended to create confusion about virtually any aspect of the goods or services.
How do I select a consumer protection advocate?
Because of the complexity of the field it is rare that one attorney or firm will be willing or able to practice in all areas of the law. One good place to begin is consulting the National Association of Consumer Advocates ("NACA") online. NACA, is a non-profit association of attorneys and non-attorney advocates devoted to protecting the interests of consumers. You might also consider the National Association of Consumer Bankruptcy Attorneys, the National Association of State Utility Consumer Advocates, the National Consumer Law Center, or the National consumer League. Most of these organizations make their membership lists public or will make referrals. There are also numerous public interest groups who, although not attorneys, will assist in advocating for the rights of consumers. Often these agencies can be just as effective as an attorney.
Can I afford to hire an attorney?
Many, but not all, consumer protection statutes provide for a successful litigant to recover his or her attorney's fees from the defendant. Some consumer injuries are sufficiently large to justify an attorney accepting the case on a contingency fee basis (the attorney is paid out of the recovery). Sometimes the abuse is so widespread it justifies a class action which may also involve a contingency fee. Some people's income qualifies them for free legal assistance through a legal aid society. However, some cases simply do not involve sufficient damages to justify hiring an attorney and are best handled through conciliation (small claims) court or a public interest advocacy agency. Do not be afraid to ask an attorney about these alternatives; many (but not all) will provide a free initial consultation to address these and other questions.
