A consumer-rights organization in Kansas City sent a letter to state Sen. Caleb Rowden, R-Columbia, this week expressing concern over a bill the group said would strip consumers of the right to sue companies that sell goods fraudulently.
Heartland Center for Jobs and Freedom said in the letter that the bill would repeal consumers' right to sue companies that fraudulently sell items like cars and homes. The center also said the bill could make it harder for customers to band together in class-action lawsuits.
Introduced by Rowden in January, Senate Bill 832 would make the Missouri Merchandising Practices Act not apply to any transaction permitted or regulated by the Federal Trade Commission, a state agency or a federal agency. This effectively would neuter the Missouri Merchandising Practices Act, the letter sent to Rowden claimed.
"Between the FTC and other regulatory agencies there would be no businesses that would fall outside this exemption," Carol Carter, deputy director of the National Consumer Law Center, said in the letter. "This sweeping exemption is would amount to a repeal of Missouri consumers' right to enforce the MMPA."
Rowden's office did not return multiple calls seeking comment.
Based in Kansas City, Heartland Center handles employment and consumer cases on behalf of low-wage workers. Heartland Center Executive Director Gina Chiala told the News Tribune that consumers still could complain to federal and state agencies when they believe they've been defrauded. These agencies aren't equipped to handle the volume of complaints that could come, though, nor to obtain compensation for consumers, Chiala said.
"The chances that the Consumer Financial Protection Bureau is going to pursue their case is extremely low," Chiala said.
Rowden's bill also would require consumers to prove they acted reasonably in transactions later deemed to be fraudulent. The change would require the consumer to prove the unlawful action caused him or her to enter into the transaction.
Carter said in the letter that consumers who learn of fraud after transactions would no longer be protected.
"Allowing fraudsters to escape liability by blaming the victim would invite them to keep targeting vulnerable Missourians," Carter said in the letter.
Chiala and Carter also said the bill would make it harder for consumers to form classes for class-action lawsuits because the bill would require each person to prove unfair or deceptive practices caused them to enter a transaction. The Missouri Merchandising Practices Act allows courts to grant punitive damages to consumers to curb future wrongdoing by sellers.
Rowden's bill would only allow members of a class to receive compensatory damages that cover the cost of the good or service received and take away the ability to sue for punitive damages. Chiala said these changes would make it harder for consumers damaged in amounts of hundreds or thousands of dollars to find attorneys to take cases.
"It would really eliminate class action cases," Chiala said. "There are lots of damages that fall outside the definition that this bill prescribes and consumers would be deprived of being able to seek those damages."
The Senate Government Reform Committee passed the bill Feb. 7. The Senate still needs to read the bill once more before a final vote can be taken.
Correction on May 7, 2018: Some quotes attributed in this story to Carol Carter were originally misattributed in the original version of this article. The error has since been corrected in the text above.