New life breathed into Colorado Consumer Protection Act claims

The State of Colorado enacted the Colorado Consumer Protection Act to provide remedies against merchants, salespersons, repairmen, and others who employ deceptive trade practices to take advantage of, exploit, and prey on unsuspecting consumers. For decades after the law was enacted, there were relatively few claims asserted under it. Then, in the late 1990s, the Colorado Supreme Court handed down a decision that made it more difficult for plaintiffs to prevail on such claims, and even fewer cases were brought under the law. In the last few years, however, there has been a resurgence of Consumer Protection Act claims, and the court appears to have eased the burden necessary to prevail.

The Act provides protections against more than 60 deceptive trade practices, including making false representations as to the quality, source, condition, price, or ingredients contained in goods; failing to deliver goods in a timely manner; refusing to show or offer goods or services as advertised; guaranteeing goods without clearly and conspicuously explaining the nature of the guarantee, including the definition of a “lifetime” guarantee, or offering a guarantee on goods that is inconsistent with their actual service life, durability and performance; failing to disclose information about goods in order to induce a consumer to purchase them; failing to obtain required governmental licenses; falsely representing a person has won or is eligible to win an award or prize as a result of a contest, promotion, sweepstakes, or drawing; falsely stating the results of a radon test; and representing hemp or hemp oil as either retail or medical marijuana.

Note, the above list is merely illustrative. The law provides many more examples of deceptive trade practices, as well as a provision that the practices listed therein are themselves non-exhaustive. Moreover, it is important to note that the law does not only apply to sales of goods, but provision of services, and real estate, as well.

Of particular concern is new home construction. New home purchases are not subject to the same regulation as other home sales, which fall under the purview of the Colorado Real Estate Commission, and thus do not utilize the standard Colorado real estate contract. Instead, builders may sell properties through salespeople and often include incredibly egregious, unscrupulous and even illegal terms in their contracts with homebuyers. Recently, this firm filed a complaint against a prolific Colorado construction company asserting several Consumer Protection Act Claims arising from the contract the construction company had in place with each of its homebuyers. The contract included a one-year limited warranty where Colorado law provides a six-year warranty, express disclaimers of the implied warranty of workmanlike construction and habitability without further explanation, an express waiver of any claims, i.e. legal action, homebuyers can bring when they find their new home was shoddily built, and an extremely unfair arbitration provision that stacked the deck substantially in the builder’s favor—all of which are illegal and void as against public policy under Colorado law.

In order to prevail on a consumer protection act claim, a plaintiff must show the following:

1. Conduct by the defendant that constitutes a deceptive trade practice;
2. The deceptive trade practice must occur “in the course of such person’s business, vocation or occupation”;
3. The challenged practice must significantly impact the public as actual or potential consumers of the defendant’s goods, services or property;
4. The plaintiff must suffer injury to a legally protected interest; and
5. The plaintiff must be able to show that the defendant’s actions in violation of the Act caused the plaintiff’s injuries.

The penalties for engaging in a deceptive trade practice are harsh, and could include three times the victim’s actual damages sustained, as well as attorney fees and costs.

If you feel you have been the victim of a deceptive trade practice, we can help you. Contact us at either 303-678-0560 or 970-304-0075 to discuss your case further.