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: gharb.cnmi.ago@gmail.com
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: gharb.cnmi.ago@gmail.com
Thank you for listening!
Any Questions/Comments?