The Kansas Consumer Protection act (KCPA)

[Hal Jordan]

I live in Kansas and had no idea that the Kansas courts had passed a law that has more teeth than the FDCPA and allows for residents of kansas to sue (in addition to the FDCPA) for up to $10K per suit!

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The Kansas Consumer Protection Act (“KCPA”)


The Kansas Consumer Protection Act (“KCPA”) provides a solution to the limitations and weaknesses of the FDCPA. First, the KCPA provides for actual or civil penalties of up to $10,000 for each violation of the KCPA, whichever is greater. K.S.A. § 50-636 (a). This civil penalty can be enhanced to $20,000 per violation if the aggrieved plaintiff is either disabled or elderly (60 years of age or older). K.S.A. § 50-677. The KCPA has lower standard of proof than fraud, as clear and convincing evidence is not required.



Second, the statute of limitations for the KCPA is three years rather than the one year limitation for the FDCPA. It should be noted that there is case law supporting the discovery rule as applied to KCPA actions. Alexander v. Certified Master Builder Corporation, 43 F.Supp.2d 1242 (D.Kan. 1999). In Alexander, Chief Judge Van Bebber held that the discovery rule is applied to a KCPA claim because it is a fraud-based claim. 43 F.Supp.2d at 1249. Judge Van Bebber’s rationale and holding applying the discovery rule to KCPA claims was extended by Judge Lungstrum in Rubin v. Riffe Homes, Inc., 1999 WL 588182, *3 (D.Kan. 1999). Specifically, Judge Lungstrum held: “In light of the KCPA’s creation of a claim similar, but not identical, to a common law fraud claim, the court is persuaded to follow Alexander and apply a discovery rule to KCPA claims.” Id. Judge Lungstrum further reasoned that “[t]he alleged fraud is considered “discovered,” thereby triggering the statute of limitations, when “the act giving rise to the cause of action causes substantial injury, or, if the fact of injury is not reasonably ascertainable until sometime after the initial act, … [when] the fact of injury becomes reasonably ascertainable to the injured party”.” Id.; quoting Schrag v. Dinges, 788 F.Supp. 1453, 1549 (D.Kan. 1992). “Or, as the Kansas Supreme Court has stated, the discovery of fraud is simultaneous with the discovery of the injury resulting from the fraud.” Id., citing Jennings v. Jennings, 211 Kan. 515, 527, 507 P.2d 241 (1973). “Accordingly, a plaintiff is considered to have discovered the fraud when he or she knew or, with reasonable diligence, should have know of the act or conduct giving rise to the injury.” Id., citing Wolf v. Brungardt, 215 Kan. 272, 524 P.2d 726 (1974). Finally, the United States District Court, District of Columbia, held in a case examining the KCPA that “Kansas law supports plaintiff’s contention that fraud-based conduct is relevant to the discovery rule, not in and of itself, but because such conduct tends to conceal from the plaintiff that it has suffered injury or that defendant’s activities have caused such injury.” In re: Vitamins Antitrust Litigation, 200 WL 1524912, *3 (D.D.C. 2000).



Third, most violations of the KCPA under an either deceptive or unconscionable practices theory do not require proving intent. Haag v. Dry Basement, Inc., 11 Kan.App.2d 649, 650, 732 P.2d 392, rev. denied 241 Kan. 838 (1987). The KCPA can also be violated irrespective of whether a consumer was actually misled or relied upon the deceptive act or practice. In short, under the KCPA there is no factual or legal issue regarding a defendant collection agency’s “bona fide error” affirmative defense.



The Kansas Supreme Court has previously held that “an independent debt collection agency falls within the definition of a ‘supplier’ and is subject to the provisions of the KCPA” if three conditions are satisfied:



(1) The debt sought to be enforced came into being as a result of the consumer transaction;
(2) The parties to the original consumer transaction were a “supplier” and a “consumer” as defined by the act; and
(3) The conduct complained of, either deceptive or unconscionable, occurred during the collection of, or an attempt to collect, a debt which arose from the consumer transaction and was owed to the original supplier.


State ex rel. Miller v. Midwest Serv. Bur. of Topeka, Inc., 229 Kan. 322, 329, 623 P.2d 1343, 1349 (1981). In Miller, the Kansas Supreme Court reviewed the legislative history of the KCPA and found that the legislature did not intend to preclude the application of the KCPA to debt collection activities. Id. at 328. The Kansas Supreme Court reasoned that that a “debt collector is obviously engaged in enforcing a consumer transaction,” which clearly meets the definition of a “supplier” contained in the KCPA. Id. at 324; see Kan. Stat. Ann. § 50-624(i) (supplier included any “other person who, in the ordinary course of business, solicits, engages in or enforces consumer transactions, whether or not dealing directly with the consumer”).



The KCPA is to be liberally construed to protect Kansas consumers from suppliers who commit deceptive and unconscionable acts. K.S.A. § 50-623 (b). Further, Kansas courts have liberally construed the KCPA in favor of consumers to encompass a variety of transactions. See State ex rel. Stephan v. Brotherhood Bank & Trust Co., 8 Kan.App.2d 57, 60, 649 P.2d 419, 422 (1982) (“Although the legislative history is open to several interpretations, the guiding principle to be applied in interpreting the KCPA is that the act is to be liberally construed in favor of the consumer.”). It is important to note that this application of the KCPA to “independent debt collectors” has been extended to attorneys. Rachoza v. Gallas & Shultz, 1998 WL 171280 *6 (D.Kan. 1998).



K.S.A. 50-626: Deceptive acts and practices.

(a) No supplier shall engage in any deceptive act or practice in connection with a consumer transaction.

(b) Deceptive acts and practices include, but are not limited to, the following, each of which is hereby declared to be a violation of this act, whether or not any consumer has in fact been misled:

(1) Representations made knowingly or with reason to know that:

(A) Property or services have sponsorship, approval, accessories, characteristics, ingredients, uses, benefits or quantities that they do not have;

(B) the supplier has a sponsorship, approval, status, affiliation or connection that the supplier does not have;

(C) property is original or new, if such property has been deteriorated, altered, reconditioned, repossessed or is second-hand or otherwise used to an extent that is materially different from the representation;

(D) property or services are of particular standard, quality, grade, style or model, if they are of another which differs materially from the representation;

(E) the consumer will receive a rebate, discount or other benefit as an inducement for entering into a consumer transaction in return for giving the supplier the names of prospective consumers or otherwise helping the supplier to enter into other consumer transactions, if receipt of benefit is contingent on an event occurring after the consumer enters into the transaction;

(F) property or services has uses, benefits or characteristics unless the supplier relied upon and possesses a reasonable basis for making such representation; or

(G) use, benefit or characteristic of property or services has been proven or otherwise substantiated unless the supplier relied upon and possesses the type and amount of proof or substantiation represented to exist;

(2) the willful use, in any oral or written representation, of exaggeration, falsehood, innuendo or ambiguity as to a material fact;

(3) the willful failure to state a material fact, or the willful concealment, suppression or omission of a material fact;

(4) disparaging the property, services or business of another by making, knowingly or with reason to know, false or misleading representations of material facts;

(5) offering property or services without intent to sell them;

(6) offering property or services without intent to supply reasonable, expectable public demand, unless the offer discloses the limitation;

(7) making false or misleading representations, knowingly or with reason to know, of fact concerning the reason for, existence of or amounts of price reductions, or the price in comparison to prices of competitors or one's own price at a past or future time;

(8) falsely stating, knowingly or with reason to know, that a consumer transaction involves consumer rights, remedies or obligations;

(9) falsely stating, knowingly or with reason to know, that services, replacements or repairs are needed;

(10) falsely stating, knowingly or with reason to know, the reasons for offering or supplying property or services at sale or discount prices;

(11) sending or delivering a solicitation for goods or services which could reasonably be interpreted or construed as a bill, invoice or statement of account due, unless:

(A) Such solicitation contains the following notice, on its face, in conspicuous and legible type in contrast by typography, layout or color with other printing on its face:

"THIS IS A SOLICITATION FOR THE PURCHASE OF GOODS OR SERVICES AND NOT A BILL, INVOICE OR STATEMENT OF ACCOUNT DUE. YOU ARE UNDER NO OBLIGATION TO MAKE ANY PAYMENTS UNLESS YOU ACCEPT THIS OFFER"; and

(B) such solicitation, if made by any classified telephone directory service not affiliated with a local telephone service in the area of service, contains the following notice, on its face, in a prominent and conspicuous manner:

"____________________________________ IS NOT AFFILIATED WITH

(name of telephone directory service)

ANY LOCAL TELEPHONE COMPANY";

(12) using, in any printed advertisement, an assumed or fictitious name for the conduct of such person's business that includes the name of any municipality, community or region or other description of the municipality, community or region in this state in such a manner as to suggest that such person's business is located in such municipality, community or region unless: (A) Such person's business is, in fact, located in such municipality, community or region; or (B) such person includes in any such printed advertisement the complete street and city address of the location from which such person's business is actually conducted. If located outside of Kansas, the state in which such person's business is located also shall be included. The provisions of this subsection shall not apply to the use of any trademark or service mark registered under the laws of this state or under federal law; any such name that, when applied to the goods or services of such person's business, is merely descriptive of them; or any such name that is merely a surname. Nothing in this subsection shall be construed to impose any liability on any publisher when such publisher had no knowledge the business was not, in fact, located in such municipality, community or region; and

(13) (A) making an oral solicitation for products or services based on a mortgage trigger lead unless the solicitation clearly and conspicuously states in the initial phase of the solicitation that the solicitor is not affiliated with the lender or broker with which the consumer initially applied and that the solicitation is based on personal information about the consumer that was purchased, directly or indirectly, from a consumer reporting agency without the knowledge or permission of the lender or broker with which the consumer initially applied;

(B) making a written solicitation for products or services based on a mortgage trigger lead unless the solicitation clearly and conspicuously states on the first page of the solicitation that the solicitor is not affiliated with the lender or broker with which the consumer initially applied and that the solicitation is based on personal information about the consumer that was purchased, directly or indirectly, from a consumer reporting agency without the knowledge or permission of the lender or broker with which the consumer initially applied. Clear and conspicuous shall include legible type in contrast by typography, layout or color with other printing on the first page of the correspondence; and

(C) any solicitor under clause (A) or (B) shall be in compliance with the provisions of the Kansas mortgage business act, unless otherwise exempted from such act, and any other law or regulation.



K.S.A. 50-627: Unconscionable acts and practices.

(a) No supplier shall engage in any unconscionable act or practice in connection with a consumer transaction. An unconscionable act or practice violates this act whether it occurs before, during or after the transaction.

(b) The unconscionability of an act or practice is a question for the court. In determining whether an act or practice is unconscionable, the court shall consider circumstances of which the supplier knew or had reason to know, such as, but not limited to the following that:

(1) The supplier took advantage of the inability of the consumer reasonably to protect the consumer's interests because of the consumer's physical infirmity, ignorance, illiteracy, inability to understand the language of an agreement or similar factor;

(2) when the consumer transaction was entered into, the price grossly exceeded the price at which similar property or services were readily obtainable in similar transactions by similar consumers;

(3) the consumer was unable to receive a material benefit from the subject of the transaction;

(4) when the consumer transaction was entered into, there was no reasonable probability of payment of the obligation in full by the consumer;

(5) the transaction the supplier induced the consumer to enter into was excessively onesided in favor of the supplier;

(6) the supplier made a misleading statement of opinion on which the consumer was likely to rely to the consumer's detriment; and

(7) except as provided by K.S.A. 50-639, and amendments thereto, the supplier excluded, modified or otherwise attempted to limit either the implied warranties of merchantability and fitness for a particular purpose or any remedy provided by law for a breach of those warranties.



KSA 50-634: Private remedies.

(a) Whether a consumer seeks or is entitled to damages or otherwise has an adequate remedy at law or in equity, a consumer aggrieved by an alleged violation of this act may bring an action to:

(1) Obtain a declaratory judgment that an act or practice violates this act; or

(2) enjoin or obtain a restraining order against a supplier who has violated, is violating or is likely to violate this act.

(b) A consumer who is aggrieved by a violation of this act may recover, but not in a class action, damages or a civil penalty as provided in subsection (a) of K.S.A. 50-636 and amendments thereto, whichever is greater.

(c) Whether a consumer seeks or is entitled to recover damages or has an adequate remedy at law, a consumer may bring a class action for declaratory judgment, an injunction and appropriate ancillary relief, except damages, against an act or practice that violates this act.

(d) A consumer who suffers loss as a result of a violation of this act may bring a class action for the damages caused by an act or practice:

(1) Violating any of the acts or practices specifically proscribed in K.S.A. 50-626, 50-627 and 50-640, and amendments thereto, or

(2) declared to violate K.S.A. 50-626 or 50-627, and amendments thereto, by a final judgment of any district court or the supreme court of this state that was either officially reported or made available for public dissemination under subsection (a)(3) of K.S.A. 50-630 and amendments thereto by the attorney general 10 days before the consumer transactions on which the action is based, or

(3) with respect to a supplier who agreed to it, was prohibited specifically by the terms of a consent judgment which became final before the consumer transactions on which the action is based.

(e) Except for services performed by the office of the attorney general or the office of a county or district attorney, the court may award to the prevailing party reasonable attorney fees, including those on appeal, limited to the work reasonably performed if:

(1) The consumer complaining of the act or practice that violates this act has brought or maintained an action the consumer knew to be groundless and the prevailing party is the supplier; or a supplier has committed an act or practice that violates this act and the prevailing party is the consumer; and

(2) an action under this section has been terminated by a judgment, or settled.

(f) Except for consent judgments, a final judgment in favor of the attorney general under K.S.A. 50-632 and amendments thereto is admissible as prima facie evidence of the facts on which it is based in later proceedings under this section against the same supplier or a supplier in privity.

(g) Notice of an action commenced pursuant to subsection (b) or (c), or an appeal of such action, shall be given to the attorney general, but failure to do so shall not provide a defendant a defense in such action.