Protecting Your Business from Consumer Protection Litigation in Oregon

Protecting Your Business from Consumer Protection Litigation in Oregon

If your business engages in the sale of “real estate, goods, or services” or collection matters with Oregon consumers, your business is subject to statutory consumer protection contained in Oregon’s Unlawful Trade Practices Act (UTPA), ORS 646.605, et. al.  The UTPA contains broad enforcement authority and tools for the Oregon Department of Justice (DOJ) to investigate, enjoin, prosecute, and penalize businesses that engage in prohibited trade practices.

Basically, your business can be shut down prior to a trial on the merits (i.e. via an injunction) and, if found in violation, subject to civil penalties of up to $25,000.00 per violation, plus attorney’s fees, and restitution.  A pre-trial discovery device called a Civil Investigative Demand (CID) can also be issued pre-suit and require your business to provide the DOJ with documents and other business materials as part of its investigation, which can be very burdensome and costly to comply with.  There is also a private right of action under the UTPA for consumers, which allows them to hire their own attorneys and sue your business and seek the recovery of their attorney’s fee if they prevail.  This is in addition to the DOJ own enforcement action. Here is a link to related UTPA penalties:

So, what does your business need to be aware of in order to best comply with the UTPA and avoid these business-killing risks?  First, you should educate yourself about what conduct is generally prohibited. Please see:

In short, you must avoid deceptive, misleading, and unconscionable trade practices as they relate to household real estate, goods, or services and related statutory collection prohibitions.  You should also consult with (or hire) general business counsel to review your business processes and any potential legal exposure prior to problems arising. Remember: “An ounce of prevention…”

Of important note: prohibited conduct under the UTPA is broadly defined and applies to large classes of specific conduct.  There are also common industries that are commonly investigated like: telecommunication companies, phone solicitors, used car dealers, contractors, and various other sellers of household real estate, goods, or services and bill collectors.   

Therefore, consumer businesses should operate by the golden rule of treating their customers fairly, openly, promptly, and honestly.  This can help your business avoid many problems to begin with. When disputes do arise, you should attempt to resolve them in the same manner and directly with your customer or the consumer.  The risk of not doing so is that these folks may hurt your business not only through bad reviews and public criticism, but may file a consumer complaint with the DOJ which can be done easily by phone or online.  The DOJ investigates its consumer complaints.

If your business is contacted by the DOJ, the DOJ recommends you respond accordingly:

When violations are deemed founded, the DOJ typically tries to resolve those matters through a legal contract called an Assurance of Voluntary Compliance (AVC) prior to filing a formal lawsuit.  While an AVC is not considered a legal admission of liability, it brings with it some risk since any future violation of an AVC is itself actionable under the UTPA if other complaints occur later.   Your business will also be required to pay restitution and some fines at a minimum under an AVC. Therefore, you should immediately consult with legal counsel and respond timely if you are ever contacted by the DOJ regarding any alleged UTPA violations.  

Overall, it is good that Oregon has enforced consumer protection with Oregon’s Unlawful Trade Practices Act (UTPA), which is good for both consumers and businesses. It encourages businesses to operate in a fair and ethical manner, with harsh repercussions if violations allegedly occur.


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