Ohio consumers are on the losing end of a bill just signed into law Monday (2 April 2012) by Governor John Kasich (R). HB 275 known as the “right to cure” law has serious flaws that harm consumers and give the green light to businesses to use deceptive sales practices on consumers.
Specifically, this bill lets the defendant business make an offer to cure in an amount equal to the amount they cheated the consumer out of, plus not more than $2500 toward legal fees. That might seem like a good thing to people who don’t (yet) know what it is like to be cheated by a business. Legal costs often far exceed $2500. But more importantly, this allows a cheating business to “get away with” only losing what they would have “lost” by just doing business honestly in the first place.
Ordinarily, the “right to cure” exists when the business transaction is being done, or if there was a genuine mistake, that right exists when initially communicated to by the consumer about the error. Now businesses can hold out curing their evil deeds until after the consumer sues, knowing most consumers give up by that point.
So, in other words, businesses can still cheat consumers en masse knowing that only some of them will sue. For those that sue, they can now easily limit their loses to what they gained from cheating … only for those that do sue. The risk of cheating is now virtually eliminated.
Now, legitimate businesses that want to be honest are put at a disadvantage. Businesses that cut corners, cheat, deceive, and commit fraud no longer have most of the risks associated with these activities, and can cut costs to attract innocent consumers who have no way to know they are being cheated away from honest businesses. It’s a “race to the bottom”.
This is also going to increase the burden on Ohio courts. Because there will now be more businesses using deceptive practices and cheating consumers, and because they can defer their “final cure” until they are actually sued, they will simply refuse to do before being sued. There is now no effective penalty for not making reasonable efforts to solve issues before it goes to court. So more cases will end up in court.
Additionally, the Ohio Attorney General will end up having to deal with more cases as more deceptive businesses get bolder in their methods to cheat consumers. This just increases the workload and thus the expenses of government. Or maybe the Attorney General will cut back on consumer protections, too.
Republicans have so often claimed they want lawsuit reform and to reduce the number of cases. This law shows a different uglier face of the Republicans, preferring to favor businesses over consumers even if it undercuts other agendas of their own.
If you live in Ohio, you can see if your state representative voted against your consumer rights, or not: