I. Common Law Fraud
– Generally: even if you don’t fit the requirements of “consumer” you may still have Fraud at your disposal.
i. “consumer”: individuals purchasing goods and services for personal, household, or family use.
ii. Fit within the definition of the proscribed activity of the statute
i. Misrepresentation of an existing fact
ii. Scienter (either knew or should have known that the statement was a lie or had reckless disregard for the truth)
iii. Justifiable Reliance
iv. Actual Damages
i. Majority Rule: “benefit of the bargain”: about expectancy. Allows recovery of what he would have received had the representations he relied upon been true. (includes lost profits)
ii. Minorty Rule: out of pocket- the difference in value btw what he gave as consideration and what he actually received. Reliance type expenditures.
iii. Recission: Nonmonetary/ equitable remedy. Do away with the contract and give back what you have left and any money paid
iv. Punitives are sometimes allowed when the court is tryin to deter (when there is actual malice or reckless disregard for consequences)
v. South Carolina: difference btw actual value at time of sale and value expected.
vi. Attorney fees: not usually recoverable except when:
1. If provided for under the consumer law statute
2. If provided for under the contract
3. Intentional fraud
vii. When there is Silent Fraud: the creation of a constructive trust, or reformation of the contract, recision.
II. Motor Vehicle Information and Cost Savings Act (Odometer Act) (49 U.S.C. 32701-)
– Generally: shows shift from cl fraud to statutory provisions bc it was becoming a bigger problem. The statute would provide incentives to attorneys. (1973)
– “transforer”: whether by sale, gift, or other means. Very broad.
– No violation if the car is 10 years old at time of transaction
– “constructive knowledge” is all that is required: knowledge can be proven by the transforor being in dominion and control + the odometer being rolled back. requires dealers to now go back and investigate.
– Prohibited Conduct
ii. Rolling back
iii. Selling devices that are used to roll back
iv. Driving a car with false odometer reading with intent to defraud a buyer.
– Required Disclosures
i. Keeping accurate records
ii. Must disclose the actual mileage or disclose that the actual mileage is not known. (§32705)
– Remedies: (§32709)
i. Attorney fees are covered.
ii. Civil penalty: each penalty is subject to $2,000 fine (up to $100,000)
1. civil actions by private persons (32710)
iii. Criminal penalty: fine and imprisonment for not more than 3 years.
iv. Violation with intent to defraud: treble damages (3x the actual or a minimum of $1,500) are permitted. Plaintiff must prove “intent to defraud” + violation of act.
III. Postal Reorganization Act: Unordered Merchandise (39 U.S.C.A.s 3009)
i. Only applies to good delivered by t
2. To obligate a cosigner unless the cosigner is infomre dprior to becoming obligated, which in the case of open end credit shall mean prior to the time that the agreement creating the liability for future charges is executed, of the nature of his or her liability.
3. Not a violation if the “notice to cosigner” is given (form provided in the statute §444.3.
VI. Uniform and South Carolina Deceptive Trade Practices Act (39-5-10)
i. Will refer to §5 of the FTC in determining what is an unfair trade practice
ii. Called the “little unfair trade practices act” which says more or less that unfair/deceptive trade practices are illegeal and that we will interpret them in line with §5.
iii. Special unfair trade prac rule that applies only to automobiles: allows treble damages but if you can prove it was intentional you can get 5x the damages.
iv. 39-5-39: can hold attorney’s liable for false or deceptive trade practices and advertising.
– Purpose and Prohibited Conduct
i. Bait-n-switch is commonly actionaable
i. Allows the AG to bring suits.
ii. Allows for citizen suits- but courts now require there be a “public interest requirement” before it SC Unfair Trade Practices Act will be invoked.
iii. “public interest requirement” satisfied by showing: