Changes to Ohio’s Consumer Sales Practices Act Take Effect April 6, 2017

Ohio’s Consumer Sales Practices Act (the “CSPA”), codified under Chapter 1345 of the Ohio Revised Code prohibits “suppliers” from committing unfair or deceptive acts or practices in connection with a consumer transaction. [1] The CSPA also includes a section specific to “home solicitation sales,” which provides consumers with a statutory three-day right to cancel most sales where the contract is signed at the consumer’s residence. [2] Section 1345.02 of the CSPA includes a non-exclusive list of specific acts and practices that are conclusively “unfair and deceptive” and therefore violate the CSPA. [3]

Ohio Senate Bill 227, which becomes effective on April 6, 2017, adds a new practice that is conclusively “unfair and deceptive” under Section 1345.02 of the CSPA:

• [T]he failure of a supplier to obtain or maintain any registration, license, bond, or insurance required by state law or local ordinance for the supplier to engage in the supplier’s trade or profession is an unfair or deceptive act or practice.

In short, after April 6, even the most conscientious supplier can violate the CSPA simply by failing to timely renew any registration, license, bond or insurance that the supplier is required to maintain under state or local law. So, in addition to maintaining licenses to perform services such as HVAC, electrical, plumbing or refrigeration work, suppliers of home services must make sure to maintain any local contractor’s licenses or bonds. Otherwise, they will be in violation of the CSPA, which could entitle the consumer to treble damages and reasonable attorney’s fees.

The CSPA also governs “home solicitation sales” – a sale of consumer goods or services in which the seller engages in a personal solicitation at the residence of the buyer. [4] In connection with every home solicitation sale, the seller must notify the buyer of his or her right to cancel the sale and provide the buyer with a “Notice of Cancellation” form that the buyer can use to cancel the sale. [5] Both the warning notice and the form to cancel have specific statutory requirements.

Senate Bill 227 updates the home solicitation sale Notice of Cancellation requirements to include fax or e-mail, which the supplier must provide. In turn, the buyer can now cancel the sale by delivering the Notice of Cancellation “in person or manually” or by “facsimile transmission or electronic mail” to the seller.

If you would like us to help you evaluate Ohio Consumer Sales Practice Act issues facing your business, please contact Frantz Ward partner Mark Rodio.

[1]  The CSPA defines “supplier” as “a seller, lessor, assignor, franchisor, or other person engaged in the business of effecting or soliciting consumer transactions, whether or not the person deals directly with the consumer.”
[2]  R.C. 1345.01(C).
[3]  R.C. 1345.01(B) – (F).
[4]  R.C. 1345.21(A).
[5]  R.C. 1345.23(B).