How Massachusetts General Law 93A Affects Internet Businesses

Massachusetts General Act 93A, called the Consumer Protection Practice Regulation, is designed to protect those consumers who are otherwise unaware of their legal rights. Mass. Gen. Act 93A . As originally created, 93A did not create a private lawsuit, an issue that was quickly resolved by the Legislature, and now consumers and businesses can use 93A as a basis for exercising their rights through a private lawsuit.
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Unlike some other states, the Massachusetts Consumer Statute provides for an explicit, not implied, right to sue companies they believe have been the victims of fraudulent or fraudulent acts. Consumer protection is often easy to spot with standard companies, such as: bait & switch advertising, defect detection, pricing, faulty warranty requirements, and adverse return / refund policies.
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It becomes much more difficult to determine when a consumer law requirement based on mass law 93A exists when a business is only involved in e-commerce, and especially when that business is not located in the state.
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When evaluating a potential consumer protection claim, it is important to keep in mind that the necessary elements differ for the business and for the consumer. The consumer must follow certain procedural and substantive requirements set out in section 9 of the Act.
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Among other elements, Section 9 requires a 30-day claim letter showing that they are in fact a consumer, unfair or deceptive practice and showing harm.
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Businesses, especially Internet businesses, differ substantially in their required elements. Section 11 sets out the requirements for a 93A business request and requires that a business issue:

  1. That they are “business” – (involved in the conduct of any trade or trade);
  2. That the defendant participated in an “unfair competition method” or that the defendants’ actions were “unfair” or “deceptive;”
  3. That these actions took place primarily and mainly within Massachusetts (the burden is on the defendant to rebut this presumption as a defense); i
  4. That these actions resulted in the business plaintiff’s loss of money or property, real or personal, for the purpose of causing damages for the money; or
  5. That these actions “may result in such loss of money or property.”

Mass. Gen. Act 93A
Due to the openness of the internet and the anonymity involved, it can be extremely difficult to show that a particular method was unfair or deceptive.
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It is more difficult, especially in the context of an online business, to show that a particular act results in damage or loss. As online transactions vary in amount and as the market continues to expand, it can be extremely difficult to portray actual loss, or even the potential for loss.
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As each element must be present before the petition is filed, the cautious representative will investigate the facts of the case before initiating petition 93A. Without properly placed elements, most judges will dismiss the case at the earliest opportunity.

In addition, Internet businesses present unique jurisdictional issues that may confuse the use of 93A for consumer protection purposes. For there to be any hope that 93A will apply to an online business, a “dishonest or deceptive act” must occur primarily or significantly within the Commonwealth of Massachusetts. When neither the deceptive / dishonest act nor the harm is caused in MA, the consumer protection claim will be barred under 93A, even if the victim is a resident or place of business of Massachusetts. In the recent case of Massachusetts Superior Court of Fillmore v. Leasecomm Corp. , a judge dismissed a consumer protection claim filed by a Massachusetts company against a California company because allegedly deceptive sales tactics and unfair contracts were used in California. Fillmore v. Leasecomm Corp. , 18 Mass. L. Rptr. 560, 2004 WL 3091642 (Mass. Super. Ct. Nov. 15, 2004). In Fillmore , plaintiffs’ submissions failed at the center of gravity; test applied for jurisdictional purposes, so the claim was denied. When deciding whether or not to file a Massachusetts consumer protection claim, it is best to first look at the act, damages, and jurisdiction. The more that happened in Massachusetts jurisdiction, the more likely it was that the claim could continue. However, Massachusetts courts are considered favored Massachusetts companies when all the elements, including jurisdictions, are met.
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If the contract were to be performed in Massachusetts and the damage occurred in Massachusetts, then the competent element would be fulfilled and the court would look to the applicant, as did the Massachusetts Court of Appeals at Auto Shine Car Wash Sys. v. Nice Nice Car Wash, Inc. At Auto Shine, parties often met in Massachusetts, and misrepresentation originated in Massachusetts. The court ruled in favor of the plaintiff for double damages because there was a deliberate and willful violation of the mass of General Law ch. 93A 58 Mass. The application. Ct. 685 (Mass Appeals, Ct. 2003).

Filing a consumer protection claim represents a significantly increased level of evidence and jurisdiction when your client is a business entity. Keep an eye out for the consequences and potential wasted time you can use when applying without completing each element. Just because Massachusetts provides an explicit right for businesses to file claims does not mean that judges will be willing to ignore even the smallest discrepancies in demanding claims.