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

Michigan's lemon law covers new passenger vehicles, SUVs, pickup trucks and vans bought or leased in Michigan (or by a Michigan resident) that come with a manufacturer's express warranty; motor homes, buses, other trucks and vehicles with fewer than four wheels are excluded. Business buyers are covered only if they buy or lease fewer than 10 new vehicles a year. The defect must be reported during the express warranty or within one year of delivery, whichever is earlier. A reasonable number of attempts is presumed if the same defect was repaired four or more times within two years and still exists (the consumer must give written notice after the third attempt, and the manufacturer then gets 5 business days to fix it), or the vehicle was out of service for 30 or more days during the warranty or first year. The manufacturer must then, within 30 days, replace the vehicle with a comparable one or refund the purchase price (the consumer may demand a refund), including collateral charges and towing/rental costs, minus a reasonable allowance for use.

In a home solicitation sale, the buyer may cancel at any time before midnight of the third business day after the transaction by mailing or delivering a signed and dated cancellation notice or other written notice. The seller must return payments, any trade-in and any negotiable instruments within 10 business days after receiving the notice.

The Michigan Consumer Protection Act (Act 331 of 1976) prohibits unfair, unconscionable or deceptive practices in trade or commerce. A person who suffers a loss may sue for actual damages or $250, whichever is greater, plus reasonable attorney fees; class actions are limited to actual damages. Any person may also seek an injunction or a declaratory judgment. A lawsuit must be filed within 6 years after the practice or within 1 year after the last payment in the transaction, whichever ends later.

Under the Motor Vehicle Service and Repair Act, a repair facility must give the customer a written estimate before starting work. The customer's consent (written or oral) is needed before charging more than the estimate, except that, unless the customer specifically asks otherwise, consent is not required when the overage is no more than 10% or $50, whichever is less. The facility must return replaced parts to the customer when the work is done, except for parts exempted for size or weight, parts that must go back to a manufacturer under a warranty or exchange, and fuel tanks. When the vehicle is returned, the customer must get a written statement listing the repairs, estimated and actual costs, replaced parts and their condition, and the mechanics' names.

Michigan has no separate emergency price-gouging statute in the sections reviewed, but the Consumer Protection Act lists as an unfair practice charging a consumer a price that is grossly in excess of the price at which similar property or services are sold. This rule is not limited to emergencies.

A retailer may not sell a consumer a gift certificate or gift card that expires in less than 5 years. Retailers may not charge an inactivity fee or other service fee for holding or using a gift certificate; a fee paid at purchase is allowed only if it is not deducted from the card's value. Any terms and conditions must be disclosed to the buyer. These rules do not cover bank-issued general-use prepaid cards.

Under the Credit Services Protection Act, a credit services organization may not take payment before completing all services it agreed to perform (or, for help obtaining credit, before the loan or credit closes), must perform the agreed services within 90 days of the contract (with limited exceptions for ongoing service contracts), must use a compliant written contract, and may not promise to delete accurate negative information, advise false statements to credit bureaus or creditors, or create a new credit identity.

People who, for pay, repair, alter, add to or improve residential structures (residential maintenance and alteration contractors) or build homes (residential builders) must be licensed by the state. Exemptions include owners working on their own property and projects under $600. Working without a required license is a misdemeanor with a fine of $5,000 to $25,000 and possible jail time.

Under the Identity Theft Protection Act, a business or agency that owns or licenses a database must notify each affected Michigan resident without unreasonable delay after discovering a breach of unencrypted personal information, unless it determines the breach has not caused and is not likely to cause substantial loss, injury or identity theft. Delay is allowed only to determine the scope and restore the system, or at law enforcement's request. Notice may be written, electronic (in some cases) or by live phone call, and must describe the breach and the information involved. If more than 1,000 residents are notified, the nationwide consumer reporting agencies must also be told. Knowingly failing to give notice can bring a civil fine of up to $250 per failure, capped at $750,000 per breach.

The Michigan Department of Attorney General has an online complaint portal for submitting complaints.

1) Report the defect: the consumer must first report the defect to the manufacturer or a new-vehicle dealer during the express warranty term or within 1 year after delivery to the original consumer, whichever is earlier. 2) Written notice and final repair attempt: before seeking a refund or replacement, the consumer (or a representative) must send the manufacturer written notice by return-receipt service of the need for repair, so the manufacturer has a chance to fix it. Notice is due any time after the third repair attempt for the same defect, or after the vehicle has been out of service in a repair facility for at least 25 days. The manufacturer must tell the consumer as soon as reasonably possible of a reasonably accessible repair facility, and then has 5 business days after the vehicle is delivered there to make the repair. 3) Arbitration: Michigan has no state-run lemon law arbitration program. If the manufacturer has or takes part in an informal dispute program that complies with federal rules (16 C.F.R. Part 703), binds the manufacturer to any decision the consumer agrees to, and lets the consumer reject the decision and pursue lemon law remedies, the lemon law does not apply to a consumer who has not first used that program. 4) Deadline: the lemon law act does not state a separate deadline to sue.