11.2 ANALYSIS OF A CLAIM
11.201 Application of the VCPA. The VCPA only covers certain consumers, suppliers, and goods and services. Before filing a VCPA action, plaintiff's counsel should carefully analyze the transaction to ensure that the plaintiffs and the transaction at issue fall within the ambit of the statute. There also may be opportunities for defense counsel to demur or move for summary judgment on a VCPA claim brought by or against a person or entity that does not meet the criteria of the VCPA or involving a transaction that falls outside its definition of "consumer transaction."
11.202 Key Definitions.
A. "Business Opportunity." The VCPA regulates a "business opportunity," defined as "the sale of any products, equipment, supplies or services which are sold to an individual for the purpose of enabling such individual to start a business to be operated out of his residence." 9 The prohibition specifically does not apply to any business opportunity that is subject to the Business Opportunity Sales Act. 10
B. "Consumer Transactions." The VCPA regulates consumer transactions between individual consumers and suppliers of goods and
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services. The VCPA defines "consumer transactions" as: (i) the advertisement, sale, lease, license or offering for sale, lease, or license of goods or services to be used primarily for personal, family, or household purposes; (ii) transactions involving the advertisement, offer, or sale to an individual of a business opportunity; (iii) transactions involving the advertisement, offer, or sale of employment services; (iv) layaway agreements; and (v) transactions involving the advertisement, sale, lease, or license, or the offering for sale, lease, or license, of goods or services to a church or other religious body. 11 Consequently, the VCPA's definition of "consumer transaction" limits its protection only to individual consumers and religious bodies. 12
Although the VCPA defines "person" as "any natural person, corporation, trust, partnership, association and any other legal entity," 13 a corporation rarely qualifies for protection as a plaintiff under the VCPA because a business would not use goods and services for personal, family, or household purposes, or otherwise be involved in the other four types of transactions listed in section 59.1-198 of the Virginia Code. 14 There have been, however, a few cases where businesses have successfully pursued VCPA claims, particularly in situations where the defendant misrepresents its goods or services as those of a direct competitor. 15 One federal court also has
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permitted an insurer to pursue a claim based on the company's right of subrogation to their insured homeowners' VCPA action. 16
C. "Goods" and "Services." The VCPA defines "goods" as "all real, personal or mixed property, tangible or intangible." 17 Recognizing the need to cover new technology, the Virginia General Assembly amended the original definition of intangible property to include computer information. 18 Along with other modifications, the amendments stated that the leasing and licensing of computer information, programs, databases, and other computer-related transactions are within the scope of the VCPA. 19 "Services" are defined to include, without limitation, "work performed in the business or occupation of the supplier" or performed by an agent of the supplier if the charges for that service are passed on to the consumer or purchaser, or "the subject of an 'access contract' as defined in § 59.1-501.2." 20 Multiple Virginia courts have held that legal services—and possibly any service licensed under state law—do not fall within this definition. 21
D. "Supplier." The VCPA defines a "supplier" as a "seller, lessor or licensor who advertises, solicits or engages in consumer transactions, or a manufacturer, distributor or licensor who advertises and sells, leases or licenses goods or services to be resold, leased or sublicensed by other persons in consumer transactions." 22 The VCPA does not apply to individuals who do not make a business out of supplying goods and services in consumer trans-actions. 23 Furthermore, publishers, radio and television stations, advertising agencies, and entities that transmit or process advertising are also exempt from liability if they lack knowledge of the false nature of the advertising. 24
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11.203 Unfair Business Practices Prohibited. The VCPA is e and specifically prohibits over fifty unfair business practices, not limited to: .
| • | Misrepresenting goods or services as those of another. 25 | |
| • | Misrepresenting the source, sponsorship, approval, or certification of goods or services. 26 | |
| • | Misrepresenting the affiliation, connection, or association of the supplier, or of the goods or services, with another. 27 | |
| • | Misrepresenting the geographic origin of goods and services. 28 | |
| • | Misrepresenting that goods or services have certain quantities, characteristics, ingredients, uses, or bene-fits. 29 | |
| • | Misrepresenting that goods or services are of a particular standard, quality, grade, style, or model. 30 | |
| • | Advertising or offering for sale goods that are used, secondhand, repossessed, defective, blemished, deteriorated, or reconditioned or that are "seconds," irregulars, imperfects, or "not first class," without clearly and unequivocally indicating their true condition. 31 |
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| • | Advertising goods or services with intent not to sell them as advertised or with intent not to sell at the price or upon the terms advertised. 32 | |
| • | Making false or misleading statements of fact concerning the reasons for, existence of, or amounts of price reductions. 33 | |
| • | Misrepresenting that repairs, alterations, modifications, or services have been performed or parts installed. 34 | |
| • | Misrepresenting by the use of any written or documentary material that appears to be an invoice or bill for merchandise or services previously ordered. 35 | |
| • | Using in any manner the words "wholesale," "wholesaler," "factory," or "manufacturer" in the supplier's name, or to describe the nature of the supplier's business, unless the supplier is actually engaged primarily in selling at wholesale or in manufacturing the advertised goods or services. 36 | |
| • | Using a liquidated damages clause, penalty clause, or waiver of defense or attempting to collect any liquidated damages or penalties under this type of clause in a contract or lease when such a provision is void or unenforceable either under Virginia or federal law. 37 In 2016, the General Assembly added a requirement that consumers be provided the language required under 16 C.F.R. § 433.2, the Federal Trade Commission's so- |
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| • | called "Holder Rule," which makes certain holders of consumer contracts liable to consumers who are damaged by misrepresentations of the original seller. 38 | |
| • | Using any other deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction. 39 | |
| • | Failing to disclose all conditions or fees relating to the return of goods for refund, exchange, or credit or to a layaway agreement. 40 | |
| • | Failing to provide written notice to a consumer of an existing open-end credit balance in excess of $5 on an account maintained by the supplier and resulting from the consumer's overpayment on the account. The supplier has 60 days to provide the written notification. 41 | |
| • | Failing to adhere to the terms and conditions of a written agreement that a supplier has entered into with a consumer to resolve a dispute that arose in connection with a consumer transaction. 42 | |
| • | Using the consumer's Social Security number as the consumer's account number with the supplier if the consumer has requested in writing that the supplier use an alternate number. 43 |
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| • | Violating any provision of over fifty Virginia statutes designed to protect consumers. 44 |
11.204 Violations of Other Virginia Statutes. Violating numerous other Virginia consumer protection laws may also constitute a violation of the VCPA. The following statutes are included within the coverage of the VCPA:
A. Sale of Certain Animals. Section 59.1-200(A)(15) of the Virginia Code covers violations of several provisions of the animal welfare law relating to the sale of certain animals by pet dealers as codified in sections 3.2-6512, 3.2-6513, and 3.2-6516.
Under section 3.2-6512, it is a violation of the VCPA for a pet dealer to sell a dog or cat stating, promising, or representing that the animal is registered or capable of being registered with any animal pedigree registry organization, without providing the consumer with a pet dealer's animal history certificate at the time the consumer takes possession of the animal. The information in the pet dealer's animal history certificate required is for informational purposes, and the pet dealer is not responsible for the accuracy of the information unless he or she knows or has reason to know that the information is wrong. A pet shop or a licensed USDA dealer that is operating in Virginia must post the breeder's name city, state, and USDA license number in a conspicuous place on or near the cage of any dog or cat available for sale or in any Internet advertising. 45 Section 3.2-6515 contains a notice that must be given to the purchaser concerning the right to return an animal that a vet has certified as unfit for purchase or to receive a refund of the purchase price. Alternatively, the consumer may choose to retain the animal and receive reimbursement for veterinary fees up to the amount of the purchase price. Under section 3.2-6513, it is a violation of the VCPA for a pet dealer to provide false or misleading information in an animal history certificate.
Section 3.2-6516 provides that it is a violation of the VCPA for a pet dealer to represent that a dog or cat is registered or capable of...
