Associate
If you’re reading this, chances are you’ve received a letter in the mail claiming to be a “Demand Letter” or a letter sent under the guise of Chapter 93A. The Massachusetts Consumer Protection Act, i.e., Massachusetts General Laws Chapter 93A, is a broad piece of legislation which is designed to prevent “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Any business in the state of Massachusetts could be targeted by consumers who feel they have been “deceived” or treated “unfairly.” What does the law mean when it uses these terms, and how do you respond to an allegation that your business has violated this law? Not all demand letters are Chapter 93A letters, so what distinguishes them, and why does the distinction matter? If you received a demand letter and it references Chapter 93A or the Massachusetts Consumer Protection Act, here are some things to keep in mind:
1. What Is a Chapter 93A Claim?
The Massachusetts Consumer Protection Act, i.e., Chapter 93A, is a separate and distinct claim that any person or business can make against another business. Its general purpose is to protect consumers who have been damaged by a business’s wrongdoing and further damaged by the business behaving in a way that was “deceptive” or “unfair.” For instance, a consumer might claim that the business lied or knowingly behaved wrongly. There is no strict definition of what it means to commit an “unfair or deceptive practice,” and it often depends on the specific facts involved. An attorney with experience in this area can evaluate the claim and give guidance based on their knowledge and past experience.
2. How Does a Chapter 93A Claim Begin?
If you’ve received a demand letter, this does not necessarily mean you have been sued…yet. If a person believes that your business has violated Chapter 93A, the law says that they must first send a demand letter:
Section 9(3) At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent.
However, this rule only applies if a person is suing a business. If one business is suing another business, Section 9 does not apply. Therefore, the first step is to ask: Who is making the allegation? Is it a business or is it an individual? If you have been served with a lawsuit from a person, and you never received a demand letter, you should speak to an attorney to discuss whether you might be able to have the case dismissed outright. Likewise, if you are an individual and you believe you have a claim, you will need to talk to an attorney about drafting a demand letter before you can go any further.
Sometimes a business will still send a demand letter before filing suit, even if it does not have to. If you have received a demand letter — or any letter that references Chapter 93A — you should speak to an attorney right away. Your response can impact your rights.
3. I Received a Demand Letter — Now What?
If you have received a demand letter, the clock has started. You now have 30 days to respond to the letter if you want to limit the potential damages down the road.
Any person receiving such a demand for relief who, within thirty days of the mailing or delivery of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning its rejection and thereby limit any recovery to the relief tendered if the court finds that the relief tendered was reasonable in relation to the injury actually suffered by the petitioner.
This means that if you make a reasonable settlement offer within 30 days, and the Plaintiff rejects it, a court may later limit their recovery to only what you originally offered – even if they win the case. Even if you don’t think you did anything wrong, a settlement offer might help you down the road if the Plaintiff files suit. An attorney can help you evaluate what offer might be reasonable, and this number varies depending on the facts of each individual case. There is no rule that states what a reasonable offer of settlement is, but an experienced attorney can use their past experiences to help predict a reasonable number, given your circumstances.
4. But Why Should I Offer to Settle If I Did Nothing Wrong?
Normally, if you are sued in Massachusetts, the Plaintiff can only recover whatever amount of money puts them back to where they would have been if they had not been injured. This is referred to as damages. In some cases, this number is very clear. If Person A broke something worth $100, then Person A might need to pay back the $100, or replace the item. However, this is NOT the case for a Chapter 93A claim, which has specific language allowing a Plaintiff to recover up to three times their regular damages:
[I]f the court finds for the petitioner, recovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater; or up to three but not less than two times such amount if the court finds that the use or employment of the act or practice was a willful or knowing violation of said section two or that the refusal to grant relief upon demand was made in bad faith…If the Plaintiff succeeds on their claim, a Defendant could be looking at owing up to three but not less than two times the usual damages. But it doesn’t end there.
In addition to the potential treble damages, a Chapter 93A claim is one of the few claims in Massachusetts where a Plaintiff is entitled to recover the full cost of their attorney’s fees if they win. It does not matter if the claim is for $100 or $100,000. If the Plaintiff wins any money whatsoever, the Defendant now pays for all the legal fees. This is why it’s important to get your own attorney involved early, and to discuss your options before it’s too late — and before the Plaintiff’s legal fees start to add up.
5. Conclusion
If you have received a letter that claims to be a demand letter — or otherwise mentions Chapter 93A — you should contact an attorney right away to preserve your rights and ensure you won’t have to pay three times the damages. There is a limited time to act, and the clock may have already started running. You should not ignore a demand letter, or the next document you receive could be a lawsuit.