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California Consumer Protection Laws

Posted by Dmitry Gorin | Apr 02, 2024

California has long been at the forefront of consumer protection, enacting strict laws to safeguard its residents from unfair, deceptive, and fraudulent business practices. 

The California Consumers Legal Remedies Act protects consumers from false advertising, fraud, and other unfair business practices. This law allows consumers to bring individual or class action lawsuits to recover damages and stop unlawful practices.

California Consumer Protection Laws
Consumer protection laws prohibit false advertising, fraud, and other unfair business practices.

For example, some unfair and deceptive practices include selling used goods as new, passing off goods or services as those of another, deliberately recommending unnecessary replacement or repair of goods, and making false or misleading statements about someone else's products.

Any consumer suffering damage due to an act prohibited by the Consumers Legal Remedies Act can bring a suit. Both individual lawsuits and class actions are possible. The court might award court costs and attorney's fees to a plaintiff. 

The statute of limitations to sue for a cause of action is three years from the commission of the unfair practice. Notably, however, at least 30 days before filing a lawsuit for damages, the consumer must notify the defendant through certified mail and request that the business correct, repair, replace, or rectify the goods or services alleged to violate the CLRA.

After the business receives the notice, it has 30 days to remedy the situation or agree to do so. It must also actually do so within a reasonable time frame and cease to engage in unfair or deceptive practices.

Individuals or entities accused of violating these laws face penalties ranging from stiff fines to criminal charges in some cases. Let's discuss some of the most relevant laws California has in place to protect consumers. 

What are California's Deceptive Trade Practices Laws?

Navigating the marketplace with integrity is crucial for businesses to maintain consumer trust and avoid legal pitfalls. To that end, California has enacted a series of trade practices laws designed to combat and prevent dishonest business practices that could mislead consumers.

Definition and Examples of Deceptive Trade Practices 

At the heart of these laws is prohibiting any act or practice that deceives, misleads, or misinforms consumers. This includes a wide range of activities such as:

  • False advertising,
  • Bait-and-switch tactics,
  • Fraudulent misrepresentation of products or services,
  • The sale of counterfeit or pirated goods,
  • Passing off goods or services as those of another,
  • Misrepresentation of a professional affiliation or endorsement,
  • Using deceptive representations or designations of geographic origin,
  • Representing that used or reconditioned goods are new,
  • Representing that goods or services are of a particular quality or grade if they are not,
  • Disparaging the goods, services, or business of another by false or misleading representation,
  • Advertising goods or services with intent not to sell them as advertised,
  • Misrepresenting the authority of a salesperson or representative to negotiate the final terms of a customer transaction,
  • Unsolicited prerecorded messages by phone (robocalling) without identifying the caller.

An example of a deceptive trade practice could be advertising a product at a certain price without intending to sell it at that price or significantly downplaying its potential risks.

What are the Legal Repercussions for Violations?

California enforces ethical trade practices through statutes like the Consumer Legal Remedies Act (CLRA). This act enables consumers to seek damages, injunctive relief, and attorney's fees for deceptive practices.

Violations can lead to financial liabilities for businesses, including compensatory and punitive damages and litigation costs. California also has statutes criminalizing fraud, with violations potentially resulting in criminal charges and jail time.

What are Consumer Privacy Rights Laws?

In an era where data is often referred to as the new oil, California protects consumer privacy through the California Consumer Privacy Act (CCPA) and its subsequent amendment and expansion, the California Privacy Rights Act (CPRA). These laws establish a strict framework to safeguard consumer data and ensure transparency in its handling.

The CCPA and CPRA provide Californians with new rights over their personal data. Consumers can ask businesses to reveal what data is collected, used, shared, or sold and to whom. 

They can also request the deletion of their data and opt out of its sale. The CPRA also gives them the right to correct inaccurate data and restricts the use of sensitive information. 

Under this law, businesses that generate gross annual revenues over $25 million or possess or sell large amounts of consumer data must provide notices to consumers at or before the point of collection detailing the categories of personal information to be collected and the purposes for which they will be used. 

Businesses must also establish and maintain secure procedures and practices to protect personal information from unauthorized access and disclosures. 

What are the Consequences for Non-Compliance?

Violating the CCPA and CPRA can result in significant fines. If not fixed within 30 days of notification:

  • $7,500 fines per intentional violation and
  • $2,500 per unintentional violation.

The laws also grant consumers the right to take legal action in cases of unauthorized access, theft, or disclosure of their personal information due to a business's failure to maintain proper security measures.

What are California's Lemon Laws?

California's “lemon law” is primarily codified under the Song-Beverly Consumer Warranty Act, protecting consumers who purchase or lease new vehicles. The essence of these laws is to ensure that any vehicle sold with a warranty that fails to perform as promised under the warranty terms can be either replaced or refunded.

Applicability

The Lemon Law applies to new and used vehicles sold or leased in California that are still under the manufacturer's original warranty. This includes cars, trucks, SUVs, motorhome chassis, cabs, and drivetrains.

California's Lemon Laws

To fall under this law, vehicles must exhibit substantial defects that impair their use, value, or safety and have not been repairable after a reasonable number of attempts by an authorized dealer.

Obligations of Manufacturers and Dealers

When a vehicle is deemed a “lemon,” manufacturers must offer a replacement vehicle of similar value or a refund. The law specifies repair attempt limits: at least two for safety defects and four for substantial defects or over 30 days out of service.

Manufacturers and dealers are also obliged to cooperate with the dispute resolution process, which may involve arbitration as a step before litigation. They must ensure transparency regarding the repair process and maintain detailed records of all repair attempts and communications with the vehicle owner.

Potential Penalties and Remedies for Violations

Manufacturers or dealers violating the lemon law may face penalties, such as repurchasing the defective vehicle at its total price, including taxes and fees, minus a usage fee for miles driven pre-repair. They might also need to cover the consumer's attorney fees, promoting legal support. In severe cases, civil penalties up to double the damages may apply.

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About the Author

Dmitry Gorin

Dmitry Gorin is a licensed attorney, who has been involved in criminal trial work and pretrial litigation since 1994. Before becoming partner in Eisner Gorin LLP, Mr. Gorin was a Senior Deputy District Attorney in Los Angeles Courts for more than ten years. As a criminal tri...

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