Consumer Fraud Act

The Minnesota Consumer Fraud Act states:

the act, use, or employment by any person under any fraud, false pretense, false promise, false representation, misleading statement, or deceptive practice, with the intent that others rely thereon and in connection with the sale of any merchandise, where or not any person has in fact been misled, deceived, or damaged thereby, is enjoinable

Stat. §325F.69, Subd. 1.

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Minnesota Consumer Fraud Act provides protection for Minnesota consumers. Interestingly, the Minnesota Consumer Fraud Act does not provide a private cause of action to individual consumers. However, in limited circumstances, private remedies may be available through the private attorney general statute.

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:

  1. The transaction at issue must involve merchandise.
  2. It must involve a sale of that merchandise.
  3. Any conduct must be involved in connection with the sale of that merchandise.

Merchandise

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.

Sale

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.”

In Connection with the Sale of Merchandise

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 plaintiff’s claim was “not related to the sale merchandise, but dealt with issues involving the plaintiff and defendant distributorship relationship.”