Deceptive Trade Practices Act changes will harm Arkansas consumers

The Arkansas General Assembly made national news this year over the prospect of allowing spectators to arm themselves at college sporting events. Many of those who supported the idea argued that citizens should be allowed to carry concealed weapons for the defense of themselves and their families because they could not trust the government to protect their safety.

Ironically, at the same time that issues about personal protection were dominating the session, the legislature also passed a bill that eviscerated the state’s primary consumer-protection law by removing the right of citizens to bring private lawsuits to protect themselves from widespread, deceptive practices. By passing HB 1742 (now Act 986), the legislature stripped consumers of the ability to join together or prosecute representative actions to address illegal business activities.

The Deceptive Trade Practices Act (DTPA) is the only comprehensive consumer-protection remedy in our state code. It generally prohibits any unfair or deceptive business practice and expressly forbids various types of unlawful acts. Some of the detrimental exploits proscribed by the DTPA include bait-and-switch tactics, false advertising, pyramid schemes and price gouging. These prohibited activities are devices directed to deceive and injure large numbers of consumers. Even though the economic damages suffered by individual consumers may have been relatively small, the DTPA allowed them to join together to target a deceptive practice in a single lawsuit. This saved the judicial system from the possibility of dozens or even hundreds of identical lawsuits by allowing an assembly of claims in a single procedure.

More importantly, the aggregation of many consumers’ claims in a single lawsuit made it more likely that a successful ruling would terminate the unlawful conduct. Much like our criminal laws, one of the benefits of consumer-protection statutes is their capacity to deter improper behavior.

A few hours after the 9-11 terrorist attacks, some Arkansas gas stations increased fuel prices by as much as $5.00 a gallon. One motorist took exception and filed a DTPA claim against one of the businesses. The consumer prosecuted the case on behalf of all other customers who had fallen victim to this price-gouging scheme. Because of his DTPA filing, many of the consumers who had been overcharged were able to receive a refund. More importantly, the DTPA served as an effective apparatus to stop the unlawful activity and served as a deterrent to prevent others from engaging in that type of misconduct in the future.

As a result of the legislature’s recent abolishment of joined claims under the DTPA, private consumers no longer possess an effective deterrent against companies which engage in price-gouging, false advertising or similar deceptive practices. Now, if a consumer suffers small monetary damages at the hands of an unscrupulous business, his only viable remedy may be to ask the government (namely the Attorney General’s office) for help.

Gun rights are certainly an important issue, but guns should not be the only tool to protect citizens from the loss of rights or property. While carrying a gun may protect against human threats, consumers who get scammed or defrauded by a deceitful corporation may now just have to accept that victimization and hope that the government comes to the rescue.

The DTPA was designed specifically to protect consumers. HB 1742 shrinks that protection and will only benefit rogue companies that choose to engage in widespread, deceptive conduct.

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Editor’s note: Todd Turner is an attorney with Arkadelphia-based Arnold, Batson, Turner & Turner, P.A. The opinions expressed are those of the author.