I. The Problem: Small Scams
What do you do when you’ve been scammed? Maybe it’s an auto shop that promised some repairs to your car, took your money, and then never did the work. Maybe it’s a contractor that gave you a contract to sign but never followed it himself. Maybe it’s a debt collector that tries to collect money you don’t owe.
Can you hire a lawyer? Sure, you can try – but you’ll find out that legal fees quickly become more expensive than the problem you’re trying to solve! So do you just have to let it go, write it off, and leave the scammer or the fraudster out there hurting other people?
That’s not very fair! Fortunately, there’s a solution. It’s little known, but very powerful: it’s an Indiana law called the Indiana Deceptive Consumer Sales Act, or the “DCSA” and it appears at Indiana Code 24-5-0.5. The DCSA lets lawyers help people who are victims of small scams, because the scammer, and not the victim, has to pay the lawyer’s fees.
II. The Solution: Introduction to the DCSA
The basic idea of the DCSA is simple: businesses shouldn’t defraud their customers. It’s not fair to the customers (obviously!) and it’s also not fair to honest businesses, which have to compete with shady characters who cut corners. So Indiana, like many other states, enacted a law against unfair, deceptive, and abusive practices. These laws are sometimes called “UDAP” statutes. Every state has one; there’s also a “model” UDAP statute for states to copy. The DCSA is Indiana’s UDAP law.
The DCSA starts by saying that “[a] supplier may not commit an unfair, abusive, or deceptive act, omission, or practice in connection with a consumer transaction.” Ind. Code § 24-5-0.5-3(a). That’s the basic rule: don’t be unfair!
OK, that’s a good start, but there are two follow-up questions: 1) who can’t be unfair to whom? And 2) what, specifically, counts as “unfair”?
The DCSA answers both questions.
III. Who and Whom: Coverage of the DCSA
A. Which businesses are covered by the Indiana DCSA?
The DCSA rule applies to “supplier[s].” Ind. Code § 24-5-0.5-3(a). “Supplier” is defined elsewhere in the law: a “supplier” is “[a] seller, lessor, assignor, or other person who regularly engages in or solicits consumer transactions, including soliciting a consumer transaction by using a telephone facsimile machine to transmit an unsolicited advertisement. The term includes a manufacturer, wholesaler, or retailer, whether or not the person deals directly with the consumer.” Ind. Code § 24-5-0.5-2(a)(3)(A). So . . . basically every business. An ordinary retail shop, a landlord, a telemarketer, a parts factory – they’re all suppliers under the law!
B. Which consumers or customers are covered by the Indiana DCSA?
The DCSA is a little odd because it doesn’t actually say that business must not defraud people. Instead it says a supplier can’t do unfair things “in connection with a consumer transaction.” Ind. Code § 24-5-0.5-3(a).
A “consumer transaction” is generally defined as (1) “a sale, lease, assignment, award by chance, or other disposition of an item of personal property, real property, a service, or an intangible” OR “or a solicitation to supply any of these things.” (2) “to a person” (3) “for purposes that are primarily personal, familial, charitable, agricultural, or household.” Ind. Code § 24-5-0.5-2(a)(1). I’ve straightened that paragraph out and added some numbers to make it readable: the real law is a bit harder to read.
There are three pieces (or, in legal speak “elements”) to that definition. First, the transaction has to be a certain type: a sale, lease, etc. of personal property, real property, etc. That’s very broad! Anything will count. And a “solicitation,” like an offer or advertisement, counts too. Second, “to a person.” Well, a “person” is defined at Ind. Code § 24-5-0.5-2(a)(2) to mean any real person and any corporation, organization, trust, etc. So again, that’s very broad! Anybody counts. Third, then, “for purposes that are primarily personal.” That’s less broad: business transactions don’t count! The Indiana DCSA means what it says in the title: it’s a law against deceptive consumer sales. It’s not for business-to-business disputes.
(As an aside, or “just in case you weren’t sure,” the DCSA gives us three situations that are definitely consumer transactions, even if they don’t fit neatly into the main definition. So a “consumer transaction” includes transactions of structured settlement rights; unsolicited fax advertisements; and debt collectors’ collections or attempted collections of debt. Ind. Code § 24-5-0.5-2(a)(1)(A)-(C).)
The definition of “consumer transaction” gives us a good enough idea of who the DCSA covers on the customer, consumer, or victim side. Also, though, the DCSA limits who can sue: only “a person” “relying” on an unfair act can sue, and only for damages suffered “as a consumer.” Ind. Code § 24-5-0.5-4(a). That makes it pretty clear that the DCSA only protects consumers, and only protects the consumer actually involved in the transaction. And that makes sense: the state legislature probably didn’t want to have everybody suing about everything all the time: they wanted defrauded consumers to be able to sue to help fix their own problems.
C. Are debt collectors covered by the Indiana DCSA?
A “debt collector” is a “supplier” and so is covered under the Indiana DCSA. Ind. Code § 24-5-0.5-2(a)(3)(B). OK, and who counts as a “debt collector”? The DCSA says “debt collector” means what 15 U.S.C. 1692(a)(6) says it means. Ind. Code § 24-5-0.5-2(a)(13). So you have to follow up that reference to 15 U.S.C. 1692 (the “U.S.C.” means “United States Code,” which means it’s a federal law, not an Indiana law). If you do, you learn that 15 U.S.C. 1692a is part of the federal “Fair Debt Collections Practices Act” (the “FDCPA”), which is another powerful pro-consumer law that applies to debt collectors. So Indiana’s DCSA borrows its definition of “debt collector” from the FDCPA. Generally, the FDCPA defines a debt collector as someone in the business of collecting debts or who often collects debts “owed another.” 15 U.S.C. 1692a(6). But an original creditor – the person who extended credit / made the debt in the first place – doesn’t (usually) count. 15 U.S.C. 1692a(6).
What about debt collection law firms? Undre the FDCPA a law firm, even a debt collection law firm, doesn’t count as a “debt collector” when it’s serving legal papers. 15 U.S.C. 1692a(6)(D). (But it can count as a debt collector when it communicates with the debtor in other contexts.) So the FDCPA has a small carve-out for lawyers. Indiana’s DCSA goes a little bit further in protecting debt collection lawyers. It says no Indiana attorney (at least while working as an attorney) counts as a “debt collector,” period, whether serving legal papers or not. Ind. Code § 24-5-0.5-2(a)(13). (It seems like an Indiana lawyer who had a side business as a debt collector, separate from the practice of law, would count as a “debt collector” even under the DCSA, but I haven’t found any cases that say for sure.)
Indiana’s DCSA also says that a “debt buyer” is a “debt collector” covered by the statute. Ind. Code § 24-5-0.5-2(a)(13). And it points you to the definition of “debt buyer” in a different section of Indiana law, Ind. Code § 24-5-15.5-3. If you follow that reference, you learn that “debt buyer” means “a person that is regularly engaged in the business of purchasing debt for collection purposes,” Ind. Code § 24-5-15.5-3(a), no matter how that person goes about trying to collect the debts. So there’s lots of overlap between that Indiana “debt buyer” definition and the FDCPA “debt collector” definition, but they’re both in the DCSA to ensure broad coverage.
IV. What is an Unfair, Deceptive, or Abusive Practice under the DCSA?
A. The basic scheme: one definition and 43 examples
The real question, isn’t it? What is an “unfair, abusive, or deceptive act, omission, or practice” that a supplier “may not commit”? Ind. Code § 24-5-0.5-3(a).
The DCSA sets up its definition as a two-parter. First it says no “unfair, abusive or deceptive acts” of whatever sort they may be. Just a very broad definition. That’s in Ind. Code § 24-5-0.5-3(a). Then it says “without limiting” that broad definition, here’s a list of acts that are definitely unfair, abusive, or deceptive. And the DCSA lists forty-three (43!) examples of acts that are illegal. (As of this writing: the state legislature adds new acts to the list pretty regularly.) That’s Ind. Code § 24-5-0.5-3(b).
Here’s a key point, then: an act can be “unfair, abusive, or deceptive,” thus illegal under the DCSA, even though it’s not listed in section 3(b)’s forty-three examples. The statute is very clear about that! (In practice, defendants and judges might be more skeptical of a consumer attorney’s attempt to include unenumerated acts . . . even though the DCSA itself says it should be “liberally construed” to “protect consumers,” Ind. Code § 24-5-0.5-1.)
B. The enumerated “unfair practices”
The consumer is on sure footing with the listed, or enumerated, unfair practices in Ind. Code § 24-5-0.5-3(b). Nobody is going to argue that actions on the 3(b) list aren’t covered by the DCSA. So what’s in the DCSA’s list of explicitly prohibited practices? All sorts of things!
The first dozen or so examples of what is prohibited by the Indiana DCSA are explained in the law itself, without cross references to other sections. These are all general bad acts—the sort of things that an honest business just doesn’t do. So, for example, it’s illegal for a business to claim its products have features they don’t have, Ind. Code § 24-5-05.-3(b)(1); to lie about the quality of its products, -3(b)(2); to sell something used as “new”, -3(b)(3); to say that something needs a repair when it really doesn’t, -3(b)(5); to lie about whether and which warranties are included, -3(b)(8); to give a false estimate of the cost of repairs, -3(b)(12); to tinker with a product against the customer’s orders, -3(b)(14).
You can read the whole list here.
Then, after those first examples, the DCSA starts cross-referencing other Indiana and federal laws. So it says “if you violate this other law, you’ve also breached the DCSA.” That’s important because of how powerful the DCSA remedies are: it’s usually good for the consumer to be able to say that the business violated the DCSA in addition to whatever else the business did.
Some of the cross-references are major: for instance, 3(b)(20) says any violation of the FDCPA (that federal debt collection law I mentioned earlier) is a violation of Indiana’s DCSA. (The DCSA doesn’t let consumers sue under 3(b)(20), though, which is a problem I’ll address later on). Another big one is 3(b)(23), which incorporates the Indiana law on door-to-door salesmen, Ind. Code § 24-5-10. Also 3(b)(38), a fairly recent addition, which incorporates the Indiana law on what debt buyers need to show in order to collect against debtors in Indiana courts, Ind. Code § 24-5-15.5.
Some other cross-references are obscure: intrastate inmate calling services, 3(b)(41), or the sale of dogs by retail pet stores, 3(b)(42).
Now, the practical problem with this cross-reference scheme is that, to know what the DCSA prohibits, you have to follow up the references so you know what the other law prohibits. It does you no good to say “a violation of the debt buyer law is a violation of the DCSA” – you have to know what violates the debt buyer law. And with so many cross-references, that’s quite a job! I doubt there’s a single lawyer in Indiana who knows all the different provisions referenced in the DCSA. The cross-references turn a fairly self-contained set of provisions into a sprawling monster.
Taken all together, though, it’s safe to say that in general Indiana laws protecting consumers are incorporated into, and actionable under, the DCSA. And the basic initial list of unfair acts contains most, though certainly not all, of the sorts of things that a consumer would find unfair. So the Indiana DCSA protects you, as a consumer, from almost every type of unfair business practice you’re likely to encounter – if you know where to look.
V. Conclusion
In this article, I’ve explained how the DCSA is set up, what it covers, and some of its basic provisions. In the next part of this multi-part series, I’m going to answer the next practical question: if you’ve been the victim of a fraud or a scam, and you know that the business violated the DCSA, what can you do about it? I’m going to write about how to bring an Indiana DCSA lawsuit, who can sue, when, and how.
That’s coming soon.
In the meantime, if you or someone you know has been the victim of a fraud, a scam, or other unfair business practices, you can call Stautz Law for a free consultation about your case. Indiana DCSA and consumer attorney Andy Stautz may be able to take your case on a contingency fee basis, with no cost to you upfront.