Consumer Protection

Minnesota Statutes Chapter 325G contains a series of consumer protection provisions. Many of these protections exist in other states in similar forms. This panel deals with protections focussing on sales. The chapter contains other protections dealing with credit cards and other consumer problems.

Chapter 325 Table of Contents Link

Here are some of those protections.

Unsolicited Goods: When a company sends products not requested by a consumer, it does so at considerable risk. Minnesota Statutes Section 325G.01 states:

Unless otherwise agreed, where unsolicited goods are addressed to and sent to a person, the person has a right to refuse to accept delivery of the goods and is not bound to return such goods to the sender. The receipt of such unsolicited goods shall for all purposes be deemed an unconditional gift to the recipient who may use or dispose of the same in any manner the recipient sees fit without any obligation to the sender.

Need we say more? Notice that this result differs markedly from the Uniform Commercial Code result, wherein delivery of goods and acceptance of those goods would likely result in formation of a contract.

Home solicitation sales: Some consumers feel especially vulnerable when invaded by unexpected salespersons. They may feel defenseless at home. They may not be prepared to say no. For this reason, Minnesota, like many other states imposes special protections to consumers who purchase (or lease) goods in their own home. In order to qualify as a home solicitation sale

the product must be purchased primarily for personal, family or household purposes, and not for agricultural purposes.
# The purchase price of more than $25
The seller must personally solicit the sale, and
The buyer's agreement or offer to purchase must be made at a place other than the seller's place of business

Exemptions. The Home Solicitation Law does not apply to:

A sale consummated at home, after negotiations were conducted at the store
A sale in which the buyer has initiated the contact and the goods or services are needed to meet a bona fide immediate personal emergency. Certain papers must be filled out, and there are limitations.
A sale in which the buyer has initiated the contact and specifically requested the seller to visit the buyer's home for the purpose of repairing or performing maintenance upon the buyer's property, but only with respect to the goods actually requested.
A sale in which the buyer has initiated the contact either by oral, telephone, or written request (other than on a form provided by the seller), and requested the seller to visit the buyer's home for the purpose of negotiating the purchase of the specific good or service requested. Again, specific limitations apply.
A sale of insurance, securities, or real property or a sale by public auction or
A sale of a motor vehicle when the buyer's agreement or offer to purchase is made at a place other than the buyer's place of residence.

If the home solicitation statute applies then the buyer has a right to cancel the sale until midnight of the third business day after the day on which the home solicitation sale occurs. The buyer should give written notice of cancellation to the seller at the address stated in the agreement or offer to purchase. Notice of cancellation, if given by mail, is effective upon deposit in a mailbox, properly addressed to the seller and postage prepaid. Notice of cancellation need not take a particular form and is sufficient if it indicates, by any form of written expression, the intention of the buyer not to be bound by the home solicitation sale.

After cancellation, the seller must tender return of payments made (as well as cancellation of credit instruments) in return for purchased goods in good condition. If the seller fails to comply, under certain circumstances the buyer may keep the merchandise without obligation to pay.

Restrictions on Consumer Credit Sales. (Section 325G.16)

Minnesota law prohibits a seller or lessor from taking a negotiable instrument other than a check as evidence of the obligation of the buyer or lessee. A negotiable instrument is a note or other similar instrument which can be "negotiated" that is passed along to another holder, in the same way a check can be. The effect of this law is to prevent the seller from negotiating the note to a lender who would then otherwise take free of the consumer's defenses against defects in the product. The statute also prohibits any of the following in a consumer contract document:

waiver of claims or defenses
acceleration for reasons other than default
confession of judgment or assignment of wages
waiver of causes of action for illegal acts committed during repossession
certain other waivers of legal remedies

Any assignee of the contract or obligation relating to the consumer credit sale remains subject to all claims and defenses of the consumer against the seller arising from the sale, notwithstanding any agreement to the contrary, but the liability cannot exceed the amount of the balance due.

Deficiency Judgments: When you buy on credit, the seller often takes a security interest, which gives it the right to repossess the merchandise upon repayment. After repossession, the seller may, under certain circumstances, claim a deficiency judgment for the difference between the unpaid debt and the amount that the seller obtains from reselling the repossessed merchandise. Because there has been a history of considerable abuse of this right in consumer transactions, many states limit the right to take a deficiency judgment after repossession incident to a consumer transaction. Minnesota Statutes section 325G.21-22 provides such protections, but does not apply to certain "open end credit plans." Under this provision, the seller has an option with respect to covered consumer credit transactions. If the seller or lender repossesses or voluntarily accepts surrender of personal property in which the seller or lender has a security interest arising out of a consumer credit transaction and the aggregate amount of the credit extended in the transaction was $3,000 or less, the buyer is not personally liable to the seller or lender for the unpaid balance of the debt arising from the consumer credit transaction, and the seller or lender is not obligated to resell the collateral. These amounts have an inflationary index.

Alternatively if the seller or lender elects to bring an action and obtains judgment against the buyer for a debt arising from a consumer credit transaction, then (a) the seller or lender may not repossess the collateral, and (b) the collateral is not subject to levy or sale on execution or similar proceedings pursuant to the judgment.

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