I. Introduction
Last time we talked about the basics of the Indiana Deceptive Consumer Sales Act (“DCSA”). You can read that article here. I wrote about how the DCSA works, whom the DCSA protects and whom it protects against, and what frauds and scams might be illegal under the law.
In this, the second article in the series, I’m going to explain how to enforce your rights under the DCSA. So you’ve spotted a violation of the law; you know the sketchy business is guilty; and you want to use the law to help set things right. We’re going to walk through the pre-suit notice condition, how a cure and offer to cure work under the Indiana DCSA, and whether you can sue under the DCSA. Lastly, I’ll talk about the remedies the law provides: in other words, what damages can you win in an Indiana DCSA case and how are damages calculated.
II. Cured, Uncured, and Incurable Deceptive Acts
A. What is a “Cure” under the DCSA?
The Indiana DCSA is designed to resolve consumer disputes quickly and fairly. One of the ways it does that is by offering different routes to solve disputes: some disputes are small and can be fixed right away; others are big, or involve really bad behavior, and they need a more serious resolution, even if that takes longer to achieve. To understand how these different routes work, you need to understand the different categories of deceptive acts under the statute.
The DCSA assumes you have a “deceptive act.” You, the consumer, tried to make a deal with a business, but something about the deal went wrong. (If you remember the first article, you’ll know that under the DCSA terms, the business is called a “supplier” and the deal is called a “consumer transaction.”)
And what do you want to have happen with the deceptive act? You want it fixed, obviously. That’s what the DCSA calls a “cure.” A “cure” is when the business (aka “supplier”) fixes whatever went wrong: either by changing the terms of the deal, or letting you back out of it, or paying you for your time, trouble, and damages. Ind. Code § 24-5-0.5-2(a)(%).
B. “Curing” Deceptive Acts Gives the Business a Chance to Make Things Right
If you’re a consumer who’s been the victim of a bad deal, the easiest way to fix things would be for the business to admit it was wrong and set things right. No-brainer. You’d tell the business what it did wrong, the business would admit its mistake, and they’d fix it. Well, guess what? The DCSA makes you try to take that approach.
For the DCSA to help you, then, the first thing you need to do is try to get the business to fix things straight away. The law says you have to send a written notice to the business that “state[s] fully the nature of the alleged deceptive act and the actual damage suffered therefrom.” Ind. Code § 24-5-0.5-5(a). In other words, you have to tell the business “hey, here’s what went wrong, and here’s how it hurt me.”
(There’s no real name for the written notice. I call in an “invitation to cure,” but really as you’ll see it’s an invitation of an offer to cure . . . but that’s just unwieldy. We need a better term.)
But the time limits are strict! Once you find out the problem, you only have six months to send the business that written notice. Ind. Code § 24-5-0.5-5(a). And if a year has passed, you’re too late, even if you didn’t discover the problem. Id. (That’s not very fair . . . but it’s how the law is.)
Once you’ve sent the written notice, the business has thirty days to respond with how it will fix the problem. Ind. Code § 24-5-0.5-2(a)(7)(B). Its response is an “offer to cure.” The “offer to cure” needs to include both a proposal to make you, the consumer, whole for your losses (which can be a payment of money, a modification of the deal, or anything, really) and an additional payment for attorney fees. Ind. Code § 24-5-0.5-2(a)(6).
The attorney fee provision is telling. The DCSA assumes that you find a lawyer to represent you, and it makes the business – the perpetrator of the deceptive act – responsible for the cost to you of the lawyer. The attorney fees in an offer to cure are 10% of whatever the rest of the offer is worth, except with a minimum of $500 and a maximum of $4,000. Ind. Code § 24-5-0.5-2(a)(6)(B).
So the ideal situation under the DCSA is this: a business does you wrong. You find out about it right away, and you promptly send the business a letter explaining what happened. The business responds, also promptly, with an offer to make things right, which you accept, and which pays you for the time and trouble of the whole thing.
C. No Dice: Uncured and Incurable Acts
What happens when that doesn’t work?
A business that doesn’t offer to cure within thirty days of the written notice (or which does offer to cure, but doesn’t follow through and actually deliver the cure it offered) is in trouble. The deceptive act you wrote about goes from being “curable” to being “uncured.” Ind. Code § 24-5-0.5-2(a)(7).
The DCSA doesn’t let you sue for a curable act. It says you can’t bring suit unless the “deceptive act shall have become an uncured deceptive act.” Ind. Code § 24-5-0.5-5(a). But once you’ve given notice and the business hasn’t fixed the problem, then it’s game on: there’s no limitation on your ability to sue.
Alternately, you could be in a situation where the business wouldn’t try to fix its mistake even if you explained it to them. For instance, a case of outright fraud. If the business’ whole scheme is to cheat people, then you’re not going to get anywhere by asking them not to cheat you. The written notice and invitation to cure song and dance is a big waste of time.
That’s why the DCSA has a separate category of deceptive acts called “incurable” deceptive acts. An “incurable” deceptive act is a deceptive act that is “part of a scheme, artifice, or device with intent to defraud or mislead.” Ind. Code § 24-5-0.5-2(a)(8). Basically, any deliberate fraud. “Incurable” acts don’t need to go through the whole invitation-to-cure process. The DCSA assumes the business wouldn’t cure them even if it had the chance to. So you can go right ahead and sue. § 24-5-0.5-5(a).
III. Lawsuits and Remedies under the DCSA
Once you’ve gone through the invitation-to-cure process (or you’ve bypassed it because the deceptive act is “incurable”), you’re allowed to sue under the DCSA. A DCSA is a civil lawsuit – that means it’s about money, not jail – between you and the deceptive business (again, “supplier” in DCSA terms).
What you’re going for in your lawsuit is the same as what you were going for in the invitation-to-cure phase: a fix for the actual damages you suffered, and some extra to pay the lawyer you had to hire to get things fixed. Ind. Code § 24-5-0.5-4(a).
That presupposes a couple things. You have to have “rel[ied]” on the deceptive act. Ind. Code § 24-5-0.5-4(a). And your right is to have your “actual damages” remedied. Id. Those two parts work together: you don’t have actual damages unless something went wrong and hurt you; you weren’t hurt unless you were somehow “relying” on something that turned out to be deceptive.
The DCSA sets a minimum recovery of $500 for actual damages. So if you were deceived about a pack of gum, your actual damages might be $1. But the fact that you had to bring a lawsuit to fix the deception (when any sane business would have refunded you long ago) is, according to the DCSA, worth $500. The idea is that even small dishonesty should be set right.
Also, if you win the court can award you extra damages, as something of a penalty against the business, for deceptive acts that are “willful.” Those extra damages can be up to three times your actual damages, or $1,000, whichever is greater. So, to go back to the pack of gum example, you could recover $500 in “minimum” actual damages and $1,000 in willfulness damages, all over a $1 transaction. Those penalties are steep, because the DCSA takes its job seriously.
Finally, the DCSA lets you get your attorney’s fees paid by the other side if you win. Ind. Code § 24-5-0.5-4(a). This is called a “fee-shifting provision,” and it’s really, really important! Usually, in the United States, each side of a lawsuit pays its own lawyers, win or lose. That’s the “American Rule.” (The British do it differently, hence the name.) If you have to pay your own lawyer, though, you’re not going to get justice for a small fraud, because it’s going to be more expensive to hire a lawyer than the fraud was actually worth.
Just to give you some idea, an ordinary lawyer might charge $300 or $400 an hour to work on a civil case, and it might take 40 hours to take a simple case to trial. Well, that’s $12,000 in legal fees at least! And if the case is about a car repair that was $800, there’s no way you’d pay to do it. It’d only make sense to pay for 2 hours of lawyer time before you’ve spent more than you’ll recover even if you win. You see the problem.
Fee-shifting fixes that problem: you can have that $800 case, and the lawyer can try it for you, and if you win, the other side – the bad business – has to pay the fee. So the lawyer will be willing to work on your case, and you’ll be able to get justice on your claim.
A. A Side-Note on Fee-Shifting and Ethics
To ward off the potential for abuse, the DCSA cuts off fee-shifting if you reject a good offer to cure. Ind. Code § 24-5-0.5-4(k). Let’s say your damages are $500, and, after you send your written notice inviting an offer to cure, the business responds with an offer to cure for $1,001: your $500 in damages, the $500 in minimum attorney fees, and $1 for good measure. You should accept that, right? It’s a fair offer! It does what the DCSA is supposed to do: it makes you whole and pays you a little extra for the hassle of finding a lawyer to fix things.
But let’s say an unethical lawyer tells you not to accept it—even though it’s a good offer for you and he’s supposed to be working in your best interest—in the hopes of running up a huge bill for attorney fees. And that lawyer puts tons of hours into the case, takes it to trial, and a jury awards you . . . $500, just like you were entitled to all along. In that case, the DCSA says, you can’t get your attorney fees paid by the other side. Because you didn’t do better, after all, than the business was willing to give you right away.
Note that the fee-shifting cut off only applies when you don’t do better in the end. So if a business offers to “cure” your $500 in damages for $100, and you (rightly) reject it, then you’re still allowed your attorney fees if you win $500 at trial, or even just $101. A business can’t cut off the fee-shifting unless it makes a real, honest, substantial offer to cure that actually fixes your problem.
IV. Conclusion
The DCSA has a reasonable and intuitive system for you, the wronged or defrauded consumer, to protect your rights. It starts with a quick, fairly informal process where you ask the business to set things right. If that invitation to “cure” doesn’t work, or if it was going to be futile all along, the DCSA lets you escalate to a civil lawsuit.
Once in court, your remedies with the DCSA are powerful. You’re entitled to actual damages, penalty damages for willful violations, and attorney fees under the vitally important fee-shifting provision. That triple threat gives you great leverage to negotiate a favorable settlement with a business, scammer, or fraudster, and should help you find justice at trial, if necessary.
We’ve got two more articles to come in this DCSA series. Next time we’ll talk about holes and gaps in the DCSA, as well as some unresolved questions about the law. Then we’ll talk about practicalities: what it looks like to hire a lawyer for your fraud case, your deceptive business case, or the like.
As always, you can call Stautz Law for a free consultation about your situation. Indiana consumer protection attorney Andy Stautz is here to field your questions, tell you about your rights, and evaluate your case. You might have a case the firm can take on contingency, with no cost to you up front.