The Virginia Consumer Protection Act (“VCPA”) has long been thought of as a statute that addressed fraud in consumer transactions. But as the Supreme Court of Virginia clarified in a ruling last month, “the VCPA’s proscription of conduct by suppliers in consumer transactions extends considerably beyond fraud.”
A plain reading of the statute shows this to be the case. The VCPA, by its terms, prohibits broadly not just acts of fraud but the use of “any other deception, …false pretense, false promise, or misrepresentation in connection with a consumer transaction.” (See Va. Code § 59.1-200 (14)).
Why is this significant? Pleading and proving a fraud claim is difficult as it requires clear and convincing evidence that the defendant made (1) a false representation, (2) of a material fact, (3) intentionally and knowingly, (4) with intent to mislead, and that the misled party (5) reasonably relied on the statement, (6) to his detriment (i.e., incurring damages). It is not necessary under the VCPA to prove all of these elements as a prerequisite to recovery. It is sufficient to prove deception in connection with a consumer transaction resulting in damages.
As the Virginia Supreme Court reasoned in Owens v. Fantomworks, the legislative purpose of the VCPA was primarily to make it easier for consumers to recover damages against sellers, not simply to re-state the common law of fraud. The VCPA therefore does not require consumers to prove, for example, that misrepresentations were made knowingly or with the intent to deceive.
Detrimental reliance, however, is still required. Although the VCPA does not explicitly mention reliance, the section creating a private cause of action states that “[a]ny person who suffers loss as the result of a violation of this chapter shall be entitled to initiate an action to recover actual damages, or $500, whichever is greater.” (59.1-204). In other words, for a plaintiff to recover damages under the VCPA, he must have suffered a loss caused by the deception. The causal connection cannot exist without the consumer’s reliance on the statement, so reliance and damages are required elements of recovery under the VCPA.