Author(s)
Source
Florida Law Review, Vol. 63, No. 1, pp. 163-192, 2011
Summary
This article compares legal protections for consumers at the state and federal levels.
Policy Relevance
State-level consumer protection acts favor consumers against businesses much to a greater degree than does the Federal Trade Commission.
Main Points
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All states in the United States have passed consumer protection acts (CPAs), most between the late 1960s and 1981.
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These acts were often passed to compensate for what was seen as an ineffective Federal Trade Commission (FTC).
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Despite a model CPA law (UTPCPL), there was great variation in the CPAs enacted across states, and CPAs have been frequently amended.
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By the 1990s, a backlash had developed; critics alleged that CPAs permitted frivolous and abusive lawsuits at the expense of businesses.
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CPAs had expanded consumer leverage in courts, often lowering burdens of proof for finding against businesses, and permitting large damages and class actions.
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In this study, a panel of legal experts compared CPA rulings to FTC standards to evaluate the degree to which CPAs favored consumers beyond federal guidelines. The panel evaluated cases presently being litigated under state CPAs, and old cases decided unambiguously in favor of consumers.
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In each sample, less than half of the complaints met the FTC standard for illegal behavior by businesses.
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When illegal behavior was found in decided cases, the behavior would have resulted in FTC action only half the time.
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These findings probably reflect the degree to which CPAs favor consumers beyond the standards of the FTC, although other factors may have some explanatory power.