Expansion of Consumer Protections in PA
Last year, our Pittsburgh lawyers wrote about how proving “fraudulent” intent is no longer necessary to maintain a claim for violation of PA’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL” or “CPL” or “Act”). Rather, the Act is a “strict liability statute.” This means, the Act makes a merchant liable for any harm suffered by a consumer who relies on the merchant’s statement, even if rendered without any fraudulent intent.
The Effect of Silence
But what about a merchant who makes no statement at all — fraudulent or otherwise — and simply remains silent? Without a word uttered by a merchant, can a court apply the Act to make a merchant liable to pay triple damages for the customer’s confusion — plus the consumer’s attorney fee?
For example, let’s say a bank silently lets you think your credit card interest rate is only 10%, when the bank intends to charge you 25%? Recently, the Superior Court of PA addressed whether a merchant’s silence, alone, can support a claim under the Act.
Halpern v. Ricoh U.S.A., Inc.
In Halpern v. RICOH USA, INC., 2023 P.A. Super 139 (Pa. Super. Ct. 2023), the Plaintiff purchased a camera thinking it had a Teflon component that would take 100,000 pictures. Only, the Defendant manufacturer had switched to a polyester component, only able to take under 9,000 pictures. After five years of use, the camera had failed. But as to the camera purchase, the defendant-manufacturer had no representation whatsoever as to whether the component was polyester or Teflon.
Importantly, on appeal, the Superior Court in Halpern noted:
Based on that plain language, the [Act] prohibits more than just “false or deceptive statements.” Trial Court Opinion, 3/7/23, at 4. The [Act] declares deceptive conduct by a vendor unlawful if it is likely to create confusion or misunderstanding.
Citing Romeo v. Pittsburgh Assocs., 787 A.2d 1027, 1033 (Pa. Super. 2001), the Superior Court noted that the defendant must be under some duty to speak, for silence to constitute an Act violation. However, the court found no allegation of a duty on the part of the camera manufacturer to disclose whether the component was polyester versus Teflon, Thus, ultimately, the Superior Court held: “Buyer has clearly failed to state a claim that [the camera manufacturer] violated the catch-all provision of the CPL by its silence regarding the defective camera.”
Still, this opens the door for an Act claim so long as the Plaintiff alleges a duty on the part of the Defendant to disclose information, despite remaining silent.
Examples of the Duty to Speak
A merchant who advertises about the good quality of his product’s components may, arguably, have a duty to identify the components in current advertising, especially if the components had been identified in prior advertising. The same would go for a credit card company that advertises a “competitive” interest rate. However in truth, the interest rate was higher than a recently advertised rate by the same credit card company.
They key will be looking for other representations to consumers by the business or merchant, which might give the company a duty to speak about the instant transaction.
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