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

The new car lemon law covers motor vehicles sold or leased by a dealer or manufacturer; auto homes, off-road vehicles and vehicles used primarily for business are excluded. The protection period is one year or 15,000 miles from original delivery, whichever comes first. A reasonable number of repair attempts is presumed if the same defect was repaired three or more times and continues, or the vehicle was out of service for a total of 15 or more business days during that period; the manufacturer then gets one final repair chance of up to seven business days. If the defect is not fixed, the manufacturer must either replace the vehicle or refund the full contract price (including trade-in credit and incidental costs) minus an allowance for use; the consumer may refuse a replacement and choose a refund. A consumer can request state-certified arbitration within 18 months of original delivery.

Dealers may not sell a used car unless it comes with a written warranty covering defects that impair safety or use. The warranty lasts 90 days or 3,750 miles if the car has under 40,000 miles; 60 days or 2,500 miles for 40,000 to under 80,000 miles; and 30 days or 1,250 miles for 80,000 to under 125,000 miles (whichever comes first). The consumer may be charged no more than $100 per covered defect. If the dealer cannot fix the same defect in three attempts, or the car is out of service more than 10 business days for that defect, the dealer must accept return of the car and refund the purchase price minus 15 cents per mile driven. The law does not apply to used cars sold by a dealer for less than $700, and it excludes auto homes, off-road vehicles, motorcycles and vehicles used primarily for business. The law states it does not limit implied warranties, and the buyer must receive written notice of the warranties, including the implied warranty of merchantability.

For personal, family or household purchases or leases over $25 that are signed somewhere other than the seller's place of business, the buyer may cancel for any reason until midnight of the third business day after signing, by written notice mailed or delivered to the seller's address in the agreement. The seller must give a detachable cancellation form. Within 10 business days after receiving the cancellation, the seller must refund all payments, return any trade-in and cancel any security interest.

The Massachusetts Consumer Protection Act (Chapter 93A) prohibits unfair methods of competition and unfair or deceptive acts or practices in trade or commerce. Consumers who are harmed can sue. At least 30 days before filing, the consumer must send the business a written demand for relief, and the business has 30 days to make a written settlement offer. A winning consumer recovers actual damages or $25, whichever is greater, plus reasonable attorney's fees and costs; the court may award two to three times damages if the violation was willful or knowing, or if the business refused a demand in bad faith.

Under Attorney General regulations, a repair shop must have the customer's signed written authorization listing the specific repairs (or tell the customer the repairs and total price before starting if written authorization cannot be obtained). If the price will be more than $10 above the authorized price, the shop must notify the customer and get authorization before continuing. Before authorization, the shop must tell the customer of the right to have replaced parts returned (or inspected, if they must go back to the manufacturer under a warranty or rebuild arrangement). When work is done, the shop must provide a dated, itemized bill listing repairs, parts with prices, and labor.

Attorney General regulations make it an unfair or deceptive practice (1) for a petroleum-related business to sell petroleum products at an unconscionably high price during a market emergency, and (2) during a declared statewide or national emergency, for any business in the chain of distribution to sell goods or services necessary for public health, safety or welfare to consumers at an unconscionably high price. A price is unconscionably high if it is grossly higher than the business's pre-emergency price or the price available from others, and the difference is not substantially due to higher supplier costs or abnormal market disruption costs.

Gift certificates (including stored-value gift cards) sold in Massachusetts must be valid for at least 7 years after issuance, and the issue and expiration dates must be clearly shown (for electronic cards, they may be on the receipt or available online or by toll-free phone). A certificate without a clearly available expiration date is redeemable forever. For non-reloadable cards, once 90% or more of the value has been used, and for reloadable cards once $5 or less remains, the holder may choose to take the balance in cash. Selling a certificate with a redemption period under 7 years, or refusing to redeem one before it expires, can bring a fine of up to $300.

Massachusetts regulations do not set a required return period, but sellers must clearly and conspicuously disclose their refund, return or cancellation policy to the buyer before the sale is completed. Failing to disclose the policy, misrepresenting it, or not honoring promised refund or return privileges is an unfair or deceptive practice.

Credit services (credit repair) organizations may not charge or receive any payment before fully and satisfactorily performing the agreed services, unless they have a surety bond of at least $10,000 and a trust account at a federally insured bank in Massachusetts. They also may not charge just for referring a buyer to a creditor, advise buyers to make false statements about their credit, or use deceptive practices.

Contractors doing residential contracting on existing owner-occupied homes with one to four units must be registered with the state. Work over $1,000 requires a written contract signed by all parties, including the contractor's registration number, start and completion dates, a detailed description of the work, the total price and a payment schedule; work may not begin until the owner has a signed copy. The advance deposit may not be more than one-third of the total price, or the actual cost of special-order materials if greater. The contract must tell the owner about any applicable three-day cancellation right. A Residential Contractor's Guaranty Fund exists.

A business or agency that owns or licenses personal information about a Massachusetts resident must give notice when it knows or has reason to know of a security breach or of unauthorized acquisition or use of the information. Notice must be given as soon as practicable and without unreasonable delay to the Attorney General, the Director of Consumer Affairs and Business Regulation, and the affected residents. The consumer notice must explain the right to a police report and how to get a free security freeze, and must not describe the nature of the breach or the number of residents affected.

1) Notice: no manufacturer, agent or dealer may require the consumer to give notice directly to the manufacturer before using state-certified new car arbitration. 2) Final repair attempt: once the repair limits are met (three or more repairs of the same defect, or 15 or more business days out of service, during the term of protection), the manufacturer gets one additional opportunity, of no more than seven business days, to fix the defect; it starts on the day the manufacturer first knows or should have known the limits were reached. 3) Arbitration: the Office of Consumer Affairs and Business Regulation runs state-certified new car arbitration through a professional arbitrator or arbitration firm appointed by its director. All manufacturers must take part if the consumer requests arbitration within 18 months after the vehicle was originally delivered. A written finding is due within 45 days after the director receives the request. If the vehicle qualifies, the manufacturer must deliver the refund or replacement within 21 days or appeal to superior court within 21 days, posting a bond. A consumer dissatisfied with the finding may file a claim under the state consumer protection law (Chapter 93A). 4) Deadline: the only filing deadline stated in the section is the 18-month window for requiring the manufacturer to arbitrate.