Wednesday, November 25, 2009

HB 1150 testimony

Testimony to the Economic Matters Committee
HB 1150 Consumer Protection – Damages for Violations of the Maryland Consumer Protection Act
Position: Favorable

March 11, 2010
The Honorable Dereck E. Davis, Chair
House Economic Matters Committee
House Office Building, Room 231
Annapolis, MD 21401
cc: Members, Economic Matters Committee

Honorable Chair Davis and Members of the Economic Matters Committee:

The Maryland Consumer Rights Coalition (MCRC) is a statewide coalition of individuals and organizations that advances and protects the interests of consumers through education, advocacy, and training programs. MCRC works to ensure fairness and safety in the marketplace. Our members include consumer advocates, practitioners, and low-and-moderate income families throughout Maryland.

The purpose of Maryland’s Consumer Protection Act (CPA) is to protect consumers from individuals or firms engaged in unfair or deceptive practices. There are numerous examples of unfair and deceptive practices that have been raised this session from sub-prime loans; to foreclosure and loan modification scams; to payday lenders; to Refund Anticipation Loans; to debt settlement.

In many respects, Maryland’s CPA is a strong, effective statute. Maryland’s CPA has a clear scope with broad prohibitions for unfair and deceptive acts and appropriate rule-making authority for the state. Moreover, the statute allows public enforcement without onerous preconditions for consumers to meet. Current law also provides equitable relief and restitution for consumers.

However, the CPA falls short in terms of the civil penalties and statutory damages it provides. A substantial civil penalty deters repeat violations. A business that uses unfair or deceptive practices to take consumers’ money is likely to continue to do so unless a civil penalty is applied in addition to restitution. According to a 2009 report by the National Consumer Law Center, 36 states had stronger civil penalties in their CPA statutes than Maryland.

The same report notes that twenty-five states and the District of Columbia authorize double or treble damages for consumers. Virginia, Pennsylvania, New York, and New Jersey statutes authorize enhanced damages. In the region, Delaware is the only other state that does not have double or treble damages.

In addition to deterring repeat violations of the CPA, HB 1150 will also provide an incentive for private attorneys to take on more consumer cases. Consequently, more consumers will have access to justice and restitution within the state and the Attorney General’s Office will be able to devote its resources to other critical consumer issues as more attorneys take on these cases.

MCRC urges the Committee to issue a favorable report on HB 1150 to enhance consumer protections throughout the state.

Respectfully submitted,

Marceline White
Executive Director, MCRC


    Subscribe to MCRC blog updates via email; click here.

No comments:

Post a Comment