The Missouri Merchandising Practices Act: Is it time for reform?

Don’t like the “slack-fill” in your potato chip bag? Well, luckily for you, under the current Missouri Merchandising Practices Act (MMPA), you can sue for that! Plaintiffs’ attorneys have been filing “slack-fill” lawsuits in Missouri for years. For example, in 2016 a case was brought against Hershey for slack fill in Reese’s Pieces and Whoppers containers. The case survived a motion to dismiss by the Western District of Missouri under the MMPA despite the fact that packaging showed the amount in every serving, the number of servings, and the weight of the packaging. Ultimately, the plaintiff lost. The judge said the plaintiff was not really harmed because he knew about the “slack-fill” and bought the candies anyway. Frivolous cases like these clog the judicial system and do not serve to protect consumers.

Bills aimed at reforming the Missouri Merchandising Practices Act were proposed in 2016, 2017, and 2018. Senate Bill 276, introduced on January 17, 2019, would set up a “reliance standard,” which means that consumers must prove that the unlawful acts of businesses misled them into purchases, resulting in damages. Consumers who cannot prove causation may find their cases dismissed.

Consumers would also have to show that they acted reasonably during a transaction. A court may dismiss a claim where the claim fails to show a likelihood that the alleged unlawful act would mislead a reasonable consumer. Furthermore, consumers must show individual damages with sufficiently objective evidence to allow the loss to be calculated with a reasonable degree of certainty. The amount of recoverable damage would be determined by the consumer’s “out-of-pocket loss,” which the bill defined as the difference between what the consumer paid and what the market value of the product or service actually is.

The goal of the SB 276 is to prevent frivolous suits and promote a standard that exists in other states Proponents of the bill reason that the MMPA is currently so broad that it has opened the door for “junk lawsuits,” lining the pockets of trial attorneys instead of fulfilling its consumer protection mission.

The Missouri Chamber of Commerce and Industry has backed MMPA reform efforts for several years. Opponents of the bill are concerned that the proposed legislation would strip consumers of their ability to sue fraudulent businesses.

To read more about the rise of slack-fill cases, see:

Bratton v. Hershey Co., 2:16-CV-4322-C-NKL, 2017 WL 2126864 (W.D. Mo. May 16, 2017).

Repairing Missouri’s Broken Consumer Protection Law, Missouri Business Headlines, Missouri Chamber of Commerce and Industry,

Repairing Missouri’s broken consumer protection law

Legislation to Curtail Robocalls!

Recently, I was interviewed by KOMU, local NBC affiliate, on Robocalls.  In the full interview, I discussed new legislation — but that part did not end up in the broadcast.  I nonetheless wanted to follow up and share the information.

A bipartisan bill has been introduced and reintroduced in Congress to address the growing problem of “spoofed” robocalls that use fraudulent caller identification information to disguise the caller’s true identity.

As the National Consumer Law Center announced:  “Led by Senators Thune (R-S.D.) and Markey (D-Mass.), the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act (S. 151) would direct the Federal Communications Commission (FCC) to develop rules requiring providers of telephone voice services to implement an effective framework for authenticating calls to better enable them to identify and stop unwanted calls before they reach the consumer. It would also increase potential civil forfeitures and criminal fines for intentional violations of the Telephone Consumer Privacy Act (TCPA).

Consumer Reports, the National Consumer Law Center, Consumer Federation of America, and Consumer Action welcomed the progress in the effort against unwanted robocalls.

“Unwanted robocalls harass Americans every day, too often with scams that take advantage of consumers, and yet phone companies drag their feet and fail to truly solve the problem,” said Maureen Mahoney, policy analyst for Consumer Reports. “The TRACED Act takes an important step in ensuring that all phone companies implement technology that will help stop “spoofed” calls, a technique employed by scammers to foil robocall mitigation efforts. Consumer Reports supports this bipartisan effort to address the robocall problem.”

“Once passed, this bill will help tens of millions of Americans reclaim the use of their telephones from the scourge of unwanted and fraudulent robocalls,” said Margot Saunders, senior policy counsel for the National Consumer Law Center. “On behalf of our low-income clients, we strongly support this bill and very much appreciate the efforts of Chairman Thune and Senator Markey to address the serious problem of caller-id spoofing.”

“Authenticating that a call is coming from the source that it purports to be is crucial in the fight against illegal robocalls, which often fraudulently spoof their caller ID,” said Susan Grant, Director of Consumer Protection and Privacy at the Consumer Federation of America. “This bill will move carriers forward to implement call authentication and provide stronger enforcement tools to use against robocallers who flout the law.”

“Spoofed robocalls are the reason that consumers are unwilling to answer their phones these days,” said Consumer Action’s Deputy Director of National Priorities Ruth Susswein. “The TRACED Act is the kind of legislation that consumers have been waiting for – with tools to curb invasive robocalls, hold abusers accountable and help consumers block bad actors from their phone lines.””

See the Press Release at

Consumer Complaints in Missouri

Often people forget that they can file consumer complaints with the state.  For example, in Missouri, consumers should let the state Attorney General’s Office know about unscrupulous businesses and individuals. They rely on consumers to act as partners in rooting out fraud and helping  bring criminals and scammers to justice.

As it says on “The Consumer Complaint Form is available for online submission or pdf format. If possible, please complete the PDF form by computer. If you don’t fill it out by computer, type or hand-print clearly in dark ink. Incomplete or unclear forms will be returned. Be sure to enclose copies of important documents concerning your transaction such as contracts, invoices, warranties, brochures and canceled checks. Do not send originals.

Call the Consumer Protection Hotline at 1-800-392-8222 for more information about filing a complaint.”

Check this out:  Top 10 Consumer Complaints.

Consumer Law Professors Join Forces to Protect the Complaints Database

Professor Amy J. Schmitz joined forces with other consumer law experts Prof. Pamela Foohey of Indiana University Maurer School of Law and Prof. Angela Littwin of University of Texas School of Law to serve as the primary drafters of a response to the Consumer Financial Protection Bureau (CFPB)’s request for information regarding the CFPB’s reporting practices of consumer complaint information. The response explains how publicly releasing information about consumer complaints is essential to the CFPB’s primary purpose of ensuring that “markets for financial products and services are fair, transparent, and competitive.” The response primarily focuses on the benefits of the CFPB’s public consumer complaint database. The response also details the benefits of adding more data to the database, of continuing to publish reports based on complaint data, of publishing more tailored reports based on the complaint data, and of evaluating the design of the online interfaces through which consumers lodge complaints and access the database. These improvements will further enhance the operation of a fair, transparent, and efficient marketplace. The response has been submitted to the CFPB, but is also available to the public at”

Consumer Complaints

The Washington Post recently interviewed Professor Amy J. Schmitz on her research related to consumer protection, and means for obtaining remedies.  You can read the article in the Washington Post at

New Changes to Protections for Borrowers of Private Student Loans

Section 601 of Public Law No. 115-174 amends the Truth in Lending Act by prohibiting a private student loan lender from declaring a default or accelerating a debt against a student loan borrower on the basis of the co-signer’s bankruptcy or death. A second provision releases the co-signer’s obligation upon the student’s death.  Nonetheless, these protections only apply to loans extended after November 20, 2018. In addition, the protections do not apply to private student loans consolidating other private student loans or to spouse co-signers where the spouse’s signature is needed to perfect the security interest in a loan.

Under another provision, students who successfully complete a loan rehabilitation program may request that negative credit reporting information about a private student loan be excluded from the consumer’s report. A loan rehabilitation program is one where the student makes a number of consecutive on-time payments on the loan.

Despite this, one should be aware that private student loan lenders are not required to offer a loan rehabilitation program and there are no specific standards for such a program.  In fact, the lender apparently is not even required to help remove the default in the student’s credit file even when the student completes the program and requests the changes in the student’s credit report.

At the same time, the rehabilitation program adds an additional risk for students. If a student begins making payments under such a program after the statute of limitations has run on the private student loan, then the payments may revive the limitations period.  This means that the student could again be subject to a collection lawsuit.

College Textbooks – Worth Their Weight in Gold?

Anyone who has either been in college recently or has had a child in college knows that textbooks are expensive. Some textbooks cost well over $200. Many students continue to purchase textbooks from their campus bookstore and then resell those books back to the university. The main reason is simply the convenience of purchasing the books near where you have the courses and not having to order them in advance. Unfortunately, campus bookstores often charge far more for books regardless of condition (New, Used, or Rental) than online retailers. Moreover, the campus bookstores also will pay far less for them at the end of the semester than other sources will.

What is the most cost effective way to purchase textbooks?

For any student looking to save money on their books, there are three simple steps. First, the student must determine the textbooks’ ISBN numbers, which can be used to find that textbook elsewhere. Many campus bookstores offer online book lists with ISBN numbers based on a student’s schedule. Second, the student needs to compare prices on a website, such as, or just search online retailers, such as Barnes & Noble or Amazon. Third, the student needs to order the books at least 2 weeks before classes begin.

Students always have the option of renting a textbook, rather than purchase the textbook. Websites, such as Amazon or, may have an option to rent the textbook for less than purchasing the book. This choice comes down to the preference of the student. If the student plans on making many notes and highlights in the book while studying, renters may charge the student. However, the student would not be responsible for reselling the book at the end of the year.

I, personally, recommend purchasing the textbook used around 3 weeks before courses start to get a lower price than right before classes start. Also, I recommend purchasing over renting textbooks, because a student may recover more money by reselling the books than students can initially save by renting.

What is the most cost effective way to resell textbooks?

Finals are over and students have 100lbs of textbooks that they never want to open again. Students have several options for reselling textbooks. Students may sell to the campus bookstore, a textbook company, or to another student. First, as mentioned above, reselling a book to the campus bookstore is not going to pay the most. Fortunately, some bookstores offer a minimum buyback price for those books which can only be purchased from the bookstore or are no longer used. For example, your marketing class requires you to pick up a book unique to your university. So you have to purchase the book from the campus bookstore. When classes are over, the marketing class decides to use a different book in the future. The student can go to the campus bookstore during their buyback and still sell the book back for $5.00 or some other minimum. Second, many textbook companies will set up on campuses at the end of the semester offering to buy textbooks for students. Most of their offers will be higher the campus bookstore’s offer. However, these tend to be picky about what books they purchase, and will not buy above a certain number of books. Third, the best way to recover your price of a textbook is to resell the book yourself to another student. Selling through an online retailer, such as Amazon, will cost a fee, but you will make far more money than reselling a book to a bookstore to act as a middleman.  However, this method requires much more effort than the first two. The student will have to ship the textbook to the other student and there is a chance the textbook will not sell.

This past semester I resold my books through Amazon and recovered most of my money. So, since I chose Amazon, I created a sellers account and then priced my books at the lowest price (or lowest price+shipping). The closer the school year comes, the more expensive books tend to get. Therefore, unlike when purchasing books, you should sell your books closer to classes beginning.

The Newhandshake: Online Dispute Resolution and the Future of Consumer Protection

We used to buy goods and services in person.  We’d introduce ourselves, look each other in the eye, and negotiate the terms of the transaction.  If we thought it was a good deal, we’d seal it with a handshake.  That handshake was more than a kind gesture – it signaled that if any problem arose, both sides were committed to getting it resolved quickly and fairly.  That handshake was our personal trustmark.

Nowadays, it’s harder to close deals with a handshake.  We can buy items from all over the world with just a few swipes on our iPhones, but when problems arise (as they inevitably do) the next step is often unclear.  On the internet it is difficult, if not impossible, to tell the good merchants from the bad merchants, and the processes for resolving disputes are often confusing or hard to find.  Customer service can feel like a runaround (e.g. long hold times, unfair refund policies) and formal redress mechanisms that work in the face-to-face world, like the courts, are generally impractical for online purchases — especially when purchases are low value and cross several legal jurisdictions.

The New Handshake: Online Dispute Resolution and the Future of Consumer Protection focuses on this lack of trust and access to remedies for online transactions.  This groundbreaking book proposes a design for a “New Handshake” for the online world.  This New Handshake uses Online Dispute Resolution (ODR) to provide fast and fair resolutions for low-dollar claims, such as those in most B2C (Business-to-Consumer) contexts.  This revolutionary system is designed to operate independently of the courts, thereby eliminating procedural complexities and choice of law concerns.  Furthermore, it can be integrated directly into the websites where transactions take place. It would provide consumers with free access to remedies, while saving businesses from costs and complexities of court.  The New Handshake aims to rebuild trust in the B2C marketplace, and provide a blueprint for the future of online consumer protection.

This is not your typical “law” or “business” book.  Instead, is a collaborative effort of a business leader and a law professor.   The result is essential reading for:
Online merchants
Payment providers
Customer services
Law and business students
Consumer advocates
Policy makers
ODR systems designers
The New Handshake can be purchased on the ABA website here:

Pay to Play in Consumer Arbitration

Some companies that include predispute arbitration clauses in their contracts have refused to pay these arbitration costs as a defendant in consumer cases.  In the case of the AAA,  nonpayment of fees will result in the AAA refusing to administer the arbitration.  Additionally, consumer claimants in such cases can then raise the same dispute in court, arguing that the arbitration requirement no longer applies because of the defendant’s material breach.

Roach v. BM Motoring, LLC, 2017 WL 931430 (N.J. Mar. 9, 2017), provides an example of what happens when a defendant refuses to pay arbitration costs.  In that case, the New Jersey Supreme Court joined other courts that find the defendant’s refusal to pay arbitration costs waives the arbitration requirement by materially breaching the agreement. See e.g. Pre-Paid Legal Services, Inc. v. Cahill, 786 F.3d 1287 (10th Cir. 2015).  The defendant car dealership included an arbitration provision in its consumer contracts that required arbitration in accordance with AAA rules, but did not explicitly require arbitration before the AAA. Nonetheless, the defendant failed to pay the AAA’s filing fees and arbitrator compensation deposit when a consumer filed a complaint against the dealership with the AAA.   Indeed, the defendant ignored the AAA’s notices — leading the AAA to send  the parties a letter stating that because of this failure it would not administer the arbitration or any other consumer disputes involving the dealership.  The consumers then filed their claims in state court and the dealership moved to compel arbitration. The New Jersey Supreme Court concluded on appeal that the dealership was precluded from enforcing the arbitration agreement.

Confirmation of Pay to Play

The Roach court confirmed basic contract law:  when a party breaches a material term of an agreement, the non-breaching party is relieved of its obligations under the agreement. The court then concluded that the arbitration terms (by requiring use of AAA rules) permitted arbitration before the AAA, even if the AAA was not stated as the exclusive forum for the arbitration.  Accordingly,  the court would not disturb the consumers’ choice to arbitrate with the AAA. The dealership materially breached the agreement where the consumer paid the consumer’s filing fee and the dealer did not pay its fees.  Therefore, the consumers were then free to litigate their claims in court.

CFPB warnings regarding college-sponsored accounts

Notably, some of the nation’s largest colleges and universities continue to maintain deals with large banks that allow for the marketing of products that may not be in the best financial interests of their students and that contain costly features.  Key findings from the Bureau’s report and analysis of college marketing deals for prepaid and debit accounts include:

  • Dozens of bank deals with colleges fail to limit costly fees:  The Bureau found that dozens of deals with banks for school-sponsored accounts, including deals at some of the nation’s largest colleges and universities, do not place limits on account fees, such as overdraft fees, out-of-network ATM fees, or other common charges. These costly fees remain a concern at dozens of campuses, even as safer and more affordable alternatives are widely available at many other schools across the county.
  • Some students may pay hundreds of dollars per year in overdraft fees: College students may pay hundreds per year in overdraft fees when using student banking products. This is particularly concerning given that a growing body of evidence suggests that small financial shocks—such as a few hundred dollars— can cause significant financial hardship for students and even deter college completion. Further, the Bureau’s analysis found that fees associated with school-sponsored accounts can collectively cost a college student body hundreds of thousands of dollars per year.
  • Deals provide financial benefits for banks and schools but offer few, if any, financial benefits for students: The Bureau found marketing agreements between colleges and banks often contain extensive details about how the school and the bank can profit. Contracts frequently include details on revenue sharing and other payments made in exchange for exclusive marketing access to colleges’ student population. At the same time, many of these agreements do not require banks to offer safe and affordable accounts—and may drive students to high-cost products.
  • Some schools fail to disclose key details of marketing deals with banks: Most colleges were required by the Department of Education to publicly disclose marketing contracts by Sept. 1, 2016. However, the CFPB found that some agreements publicly announced by banks or colleges were not included in the Department of Education’s public database of agreements, suggesting that some schools did not submit their agreements to the Department before the agency’s disclosure website launched.

This is a good time to remind readers that the CFPB published a Safe Student Account Toolkit to help colleges evaluate whether to co-sponsor a prepaid or checking account with a financial institution. The Safe Student Account Toolkit is available at: