Consumer Protection in the CNMI Gus Harb Assistant Attorney General Why do we need Consumer Protection laws? • 2007 FTC Report: In the U.S., 30.2 million adult victims (13.5 % of adult population) of consumer fraud in 2007 • Consumers do not always have enough info. to make a reasoned judgment about goods/services – Vulnerable populations more likely to experience fraud- i.e.: minorities, seniors, uneducated persons • Consumer fraud restricts economic growth – Creates an unhealthy business climate – Harmful to small business owners, who are consumers of goods/services from other merchants CNMI Consumer Protection Act 4 CMC §§ 5101-5123 • Purpose of the law: 1) Prohibit practices by merchants which deceive, mislead or confuse consumers 2) Clarify the relationship between consumers & merchants 3) Regulate business practices to promote an organized market environment 4) Provide a mechanism for resolving disputes between merchants & consumers 5) Provide civil & criminal remedies and penalties for violations of the law Role of the Attorney General’s Office • Designated Consumer Counsel within OAG- established by law • Consumer Counsel Duties: 1) Coordinate consumer protection programs Community outreach 2) Prosecute those who violate the Consumer Protection Act civil & criminal proceedings AG may also authorize investigations; issue subpoenas; administer oaths; conduct hearings; establish rules & regulations • CNMI Consumer Protection Act gives the Attorney General authority to litigate on behalf of the people of the CNMI Illegal Practices under the CNMI Consumer Protection Act • + 30 specific prohibited practices in the law… here are a few: • Representing that goods are original/new if they are expired, deteriorated, altered, reconditioned, reclaimed, or used Illegal Practices under the CNMI Consumer Protection Act • Disparaging the goods, services or business of another by false or misleading representation of facts Illegal Practices under the CNMI Consumer Protection Act • Selling expired merchandise without displaying a notice that the merchandise has expired or selling expired merchandise at more than half of the original retail price Illegal Practices under the CNMI Consumer Protection Act • Increasing the price of goods, solely on the basis of a shortage of supply caused by natural disaster or any other emergency situation Illegal Practices under the CNMI Consumer Protection Act • Representing that a part, replacement, or repair service is needed when it is not Illegal Practices under the CNMI Consumer Protection Act • making a false or misleading statement (which person knew or should have known was false/misleading) with the intent to dispose of property, to perform services or to induce the public to enter into an obligation Remedies for consumers under the Consumer Protection Act • Temporary or Permanent Injunction: used to restrain and/or prevent a violation of the Consumer Protection Act • Stops the harm • Brought forth by AG before the Superior Court • Private or Class Action lawsuit: brought by a consumer or a class of consumers aggrieved as a result of a violation of the Act • Equitable relief (to make the consumer “whole”) Penalties for violations of the Consumer Protection Act • Civil Penalties – Brought by the AG in the name of the people of the Commonwealth – Fine of up to $2,500 for each violation – Fine of up to $10,000 for violation of an Injunction Order • Criminal Penalties – Any merchant who knowingly or recklessly violates the Act is subject to a fine of up to $2,000 and/or 6 months imprisonments upon conviction for each violation – Each violation of the Act is a separate offense – When a corporation is subject to criminal prosecution- any officer, agent or legal entity who knowingly and willfully authorized the illegal activity is also subject to the same penalty Moving Forward… • Know your rights as a consumer and inform others of their rights – CNMI Consumer Protection Act (established in Public Law No. 6-46) is available at: http://www.cnmilaw.org/pdf/public_laws/06/pl06-46.pdf – Attend future OAG consumer protection outreach programs – contact me at the Attorney General’s Office with any questions or concerns • Office Phone: (670) 664-2341 • Email: firstname.lastname@example.org Moving Forward… • Report all incidents of potential consumer protection fraud to the Attorney General’s Office – Online incident report form available on OAG website at http://oagcnmi.net/consumers.asp – Contact me at the AG’s Office • Office Phone: (670) 664-2341 • Email: email@example.com Thank you for listening! Any Questions/Comments?