Kentucky Consumer Protection Laws: Lemon Law, Refunds, Repairs and Scams

Kentucky's lemon law covers new motor vehicles bought or leased by a Kentucky resident in Kentucky. It does not cover motor homes, motorcycles, mopeds, farm tractors, vehicles with more than two axles, or vehicles substantially altered after the first sale. If the manufacturer cannot fix a defect that substantially impairs the vehicle's use, value or safety after a reasonable number of attempts within the first 12,000 miles or 12 months after delivery (whichever comes first), the buyer must report the defect in writing to the manufacturer. A reasonable number of attempts is presumed if the same defect was repaired four or more times and still exists, or the vehicle was out of service for repair of the same defect for a total of at least 30 calendar days. The manufacturer must then, at the buyer's choice, replace the vehicle or take it back and refund the full purchase price (including finance charges, sales tax, and license and registration fees), minus a reasonable allowance for use. Disputes over refund or replacement must first go through the manufacturer's dispute resolution program before a lawsuit. A lawsuit must be filed within two years after original delivery, and a court may award attorney's fees to a winning buyer.

For a home solicitation sale (a sale where the seller personally solicits the buyer at the buyer's home and the buyer agrees there), the buyer may cancel until midnight of the third business day after signing, by written notice to the seller at the address in the agreement; a mailed notice counts when mailed. The seller must give a written agreement with a "BUYER'S RIGHT TO CANCEL" statement, and until it does, the buyer can cancel by any means. The right does not apply if the buyer asked for immediate emergency goods or services and the seller has already substantially begun work. For home solicitation loans secured by the buyer's principal home, the cancellation period runs until midnight of the tenth business day after the later of the loan closing or delivery of the federal Truth in Lending disclosures. Separately, a person who signs a contract with a contractor for property repairs to be paid from insurance may cancel before midnight of the fifth business day after receiving written notice from the insurer that all or part of the claim is not covered.

The Kentucky Consumer Protection Act declares unfair, false, misleading or deceptive acts or practices in trade or commerce unlawful; "unfair" means unconscionable. A person who buys or leases goods or services mainly for personal, family or household purposes and loses money or property because of an unlawful practice may sue to recover actual damages and may seek equitable relief. The law does not limit the right to seek punitive damages where appropriate, and the court may award reasonable attorney's fees and costs to the prevailing party. The suit must be filed within one year after any Attorney General action ends or within two years after the violation, whichever is later.

When the Governor declares a state of emergency (or certain federal emergencies are declared), the Governor may put the price gouging law into effect by executive order for 15 days in the emergency area, and may extend it for up to three more 15-day periods. During that time, no one may sell, rent or offer consumer food, emergency cleanup goods or services, emergency supplies, medical supplies, home heating oil, building materials, housing, transportation, freight and storage services, gasoline and other motor fuels, direct care staff services, or repair or reconstruction services at a price grossly in excess of the pre-emergency price and unrelated to increased costs. A price is not a violation if it is related to added costs, is 10% or less above the pre-emergency price, is 10% or less above the seller's costs plus normal markup, follows market or seasonal fluctuations, or was set by a contract made before the order. A willful violation carries a civil penalty of up to $5,000 for the first violation and up to $10,000 for each later violation, with a total of no more than $25,000 in any 24-hour period.

A merchant may not sell a gift card with an expiration date less than one year after the date it is issued. No service charges or fees (including dormancy, latency or administrative fees) that reduce the card's value may be charged until the expiration date has passed. A gift card sold without a printed expiration date is valid until redeemed or replaced. Certain cards sold at a discount to employers or charities, sold by charities for fundraising, or given by employers to employees may expire sooner, but not less than 120 days after issue. The law does not cover prepaid phone cards, bank-issued general-use prepaid cards, or free promotional cards. A merchant that charges a prohibited fee is liable to the cardholder for the lost value, court costs and reasonable attorney's fees.

Debt adjusters must register with the Attorney General and renew each year (fee $250), keep a separate trust account, pass customer payments to creditors within 30 days unless told otherwise, undergo an annual independent audit, and carry insurance and a $25,000 surety bond. Fee limits: no more than $75 for initial set-up, no more than $50 per calendar year for consultation, and a periodic fee no greater than 8.5% of the amount paid each month for creditors or $30, whichever is greater (these amounts may be adjusted yearly for inflation). For debts secured by a mortgage on a home, no fee may be taken before all promised services are completed. The contract must be in writing, and the debtor may cancel until midnight of the 14th day after signing.

For contracts for goods or services on a home or other real estate that are expected to be paid from a property insurance claim, the contractor must give the owner a written notice of the right to cancel and a cancellation form, may not require advance payment until the cancellation period ends, and must return any payments within 10 days after cancellation. The owner may cancel before midnight of the fifth business day after receiving written notice from the insurer that all or part of the claim is not covered. These contractors may not act as public adjusters, offer to pay or rebate the insurance deductible, or give the insured gifts or other compensation worth more than $100. After a declared emergency that damages property, the Attorney General may order roofing, siding, water damage, and tree or debris removal contractors working in the area to register with the Attorney General, and such contractors may not solicit in person in the area for 90 days after the declaration without the property owner's prior approval.

A business must notify Kentucky residents whose unencrypted personal information was, or is reasonably believed to have been, acquired by an unauthorized person in a breach that actually causes, or is reasonably believed to cause, identity theft or fraud. Personal information means a name combined with a Social Security number, driver's license number, or a financial account or card number with the code needed to access it. Notice must be given in the most expedient time possible and without unreasonable delay; it may be delayed if law enforcement determines notice would impede a criminal investigation. If more than 1,000 people must be notified at one time, the business must also notify the nationwide consumer reporting agencies. Businesses covered by the federal Gramm-Leach-Bliley Act or HIPAA are exempt.

The Attorney General's office asks consumers to first try to resolve the problem with the business. Complaints, including requests for mediation, can be filed online with the Consumer Complaint & Mediation Request form; include the business's address, a description of the problem, what you want the business to do, and copies (not originals) of documents. If the complaint is suitable for mediation, the office asks the business to respond, but if the business does not cooperate the office generally can only keep the complaint on file. The office cannot give individuals legal advice, act as a private attorney, or file a lawsuit only to recover money for one person. Separate forms exist for utility complaints and data privacy complaints, and telemarketing (no-call) complaints go through nocall.ky.gov. Landlord-tenant disputes are not handled through mediation.

1) Written notice: if the manufacturer or its agents cannot fix the defect after a reasonable number of attempts during the first 12,000 miles or 12 months after delivery, whichever is earlier, the buyer must report the defect to the manufacturer in writing. 2) Final repair attempt: no separate final-repair step is described. 3) Arbitration is required: disputes over refund or replacement must go through the manufacturer's informal dispute resolution system before the buyer can go to court. Every manufacturer must offer such a system, at no cost to the buyer, for disputes arising in the first 2 years or 25,000 miles of ownership, whichever comes first; it must offer an oral hearing unless the buyer agrees in writing to a decision on documents. A program that complies with federal rules (16 C.F.R. Part 703) and offers an oral hearing also qualifies. The decision binds the manufacturer but not the buyer, unless the manufacturer makes its system binding on both sides and the buyer signs a bold-type disclosure before submitting the dispute. Kentucky has no state-run arbitration program; the Attorney General enforces these requirements. 4) Deadline: any lemon law action must be started within two years after the new vehicle was originally delivered to the buyer. A court may award reasonable attorney's fees to a winning plaintiff.