The Minnesota Consumer Fraud Act (“CFA”) provides protection for Minnesota consumers. The CFA makes it unlawful for any person to act, use or employ “any fraud, unfair or unconscionable practice, false pretense, false promise, misrepresentation, misleading statement or deceptive practice.” See Minn. Stat. § 325F.69, subdiv. 1.
The CFA also protects consumers against specific sales tactics and marketplace transactions. For example, chain referral selling (multilevel marketing), soliciting payment without providing goods or services, and perpetual going-out-of-business sales are all prohibited.
Can you sue for violations of the Minnesota Consumer Fraud Act?
In limited circumstances, you can sue for a violation of the Minnesota Consumer Fraud Act.
The language in the Minnesota Consumer Fraud Act is very broad, which has allowed Minnesota courts to apply the law to a wide variety of circumstances. Thus, courts have occasionally held that violations of other consumer protection laws incorporate the remedies available under the CFA, including the right to a private cause of action.
Since a 2023 amendment, the Minnesota Consumer Fraud Act expressly provides a private cause of action to consumers. Minn. Stat. § 325F.70, subdiv. 3 lets a consumer injured by a violation of sections 325F.68 to 325F.70, in connection with a sale of merchandise for personal, family, household, or agricultural purposes, bring a civil action and recover damages, costs, disbursements, investigation costs, and reasonable attorney fees, and the statute declares that such an action benefits the public.
The attorney general is responsible for enforcement and prosecution of consumer fraud generally, and courts sometimes allow restitution to consumers in these cases. In addition to the consumer’s own private action, a private action under the CFA is available under the “private attorney general” statute, and successful parties can recover damages, costs, disbursements, and reasonable attorney’s fees. To learn more, read the case of Buetow v. A.L.S. Enterprises, Inc., Civ. No. 07-3970, United States District Court, District of Minnesota, August 17, 2012.
Where is the Minnesota Consumer Fraud Act located?
The Minnesota Consumer Fraud Act is generally a reference to Minnesota Statutes sections 325F.68 to 325F.70.
It may also refer to the broader Minnesota Consumer Protection Act, which is generally a reference to Minnesota Statutes Chapter 325F. Chapter 325F contains many topical consumer protection laws addressing specific industries including automobiles and pets.
What does the Minnesota Consumer Fraud Act say?
The Minnesota Consumer Fraud Act provides:
The act, use, or employment by any person of any fraud, unfair or unconscionable practice, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable as provided in section 325F.70.
Minn. Stat. § 325F.69, subdiv. 1.
What are key limitations on the Minnesota Consumer Fraud Act?
The main restriction on the scope of the Minnesota Consumer Fraud Act is that the conduct at issue must have occurred “in connection to the sale of merchandise.” This requirement has three different parts:
- The transaction at issue must involve merchandise.
- It must involve a sale of that merchandise.
- Any conduct must be involved in connection with the sale of that merchandise.
How is ‘merchandise’ defined?
Merchandise is defined under the Minnesota Consumer Fraud Act very broadly and means “any objects, wares, goods, commodities, intangibles, real estate, loans or services.” All physical goods also qualify as merchandise. The following items have been considered merchandise in Minnesota case law: securities, educational services, insurance, real estate, prescription drug sales, and phone prize solicitation.
How is ‘sale’ defined?
A sale under the Minnesota Consumer Fraud Act is defined as “any sale, offer for sale, or attempts to sell any merchandise for any consideration.”
How is ‘in connection with the sale of merchandise’ defined?
One of the main elements that is disputed in the Minnesota Consumer Fraud Act case is whether the conduct was in connection to the sale of the merchandise required under the Minnesota Consumer Fraud Act.
A number of decisions have dismissed a plaintiff’s claims for failing to show that the fraud was in connection with the sale of merchandise. In Banbury v. Omnitrition Int. Inc., 533 N.W.2d 876 (Minn. App. 1995), the Minnesota Court of Appeals affirmed a district court’s granting of summary judgment in favor of the defendant under the Minnesota Consumer Fraud Act holding that the act does not apply to all allegations of fraud and that the plaintiffs did “not allege that Omnitrition made any misrepresentation about the sale of merchandise, but only about their distributorship relationship.”
