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Federal Deception Law: Virgin Islands

This is a version of the 2005 uniform act.

V.I. Code Ann. tit. 12A §§ 401 to 441

Administrator: Lieutenant governor.

Scope & Key Definitions: Substantially similar to uniform act. § 402.

Exceptions: Substantially similar to 2005 act. §§ 402, 403.

Registration/Licensing: Substantially similar to uniform act. §§ 404, 405, 413, 414.

Disclosures: Substantially similar to uniform act. §§ 417, 418, 421, 430.

Pre-Agreement Services: Substantially similar to uniform act. § 417.

Federal Deception Law: Virginia

Va. Code Ann. §§ 6.2-2000 to 6.2025

Administrator: Commissioner of Financial Institutions.

Scope & Key Definitions: Debt Management Plans. Debt pooling and distribution service: an arrangement in which a consumer gives money or control of funds to a person for distribution to the consumer’s creditors. Debt settlement: action taken to obtain debt forgiveness or a reduction of payments, charges or fees. § 6.2-2000.

Federal Deception Law: Washington

Washington has two statutes, one regulating debt adjusters and one regulating third parties administering bank accounts for, among others, debt adjusters.

Wash. Rev. Code. §§ 18.28.010 to 18.28.900 (debt adjusters)

Administrator: Department of Financial Institutions.

Federal Deception Law: West Virginia

W.Va. Code § 61-10-23

Scope & Key Definitions: Debt pooling: charging for providing advice or a plan by which debtor deposits funds with debt pooler for distribution to creditors.

Exceptions: Licensed attorneys.

Registration/Licensing: No.

Disclosures: Not specified.

Pre-Agreement Services: Not specified.

Contract Terms: Not specified.

Cancellation/Termination/Refund Rights: Not specified.

Handling of Funds: Not specified.

Federal Deception Law: Wisconsin

Wis. Stat. § 218.02

Administrator: Division of Banking.

Scope & Key Definitions: Adjustment Service Companies: engaging the business, for a surcharge or other consideration, of pro-rating debtor’s income to creditors or purchasing debtor’s debts. § 218.02(1)(a).

Exceptions: Not specified.

Registration/Licensing: License required. The Division of Banking may require licensees to obtain a bond in the sum of not more than $5000. §§ 218.02(2).

Disclosures: Not specified.

Federal Deception Law: Wyoming

Wyo. Stat. Ann. §§ 33-14-101 to 33-14-103

Scope & Key Definitions: Debt adjustment, budget counseling, debt management or debt pooling: for a fee, offer or provide services to effect the adjustment, compromise or discharge of any debt, or receive from debtor and disburse to creditors money or anything of value. § 33-13-101.

Exceptions: Tax-exempt nonprofit counseling services; attorneys authorized to practice in Wyoming, and partnerships or professional corporations all members of which are attorneys. § 33-14-101, 33-14-102.

Federal Deception Law: 9.1 Introduction

Chapter 8, infra, analyzes federal Racketeer Influenced and Corrupt Organizations Act (RICO) statutes. This chapter analyzes their state counterparts—state RICO statutes and state civil theft laws.

Federal Deception Law: 9.2.1 Strategic Advantages of State RICO Statutes As Compared to Federal RICO

State RICO laws offer a number of strategic advantages over a federal RICO claim. A consumer who prefers to stay in state court may not wish to file a federal RICO claim, as it creates federal question jurisdiction. As a result, a defendant can remove the case to federal court. A state RICO claim, however, does not usually create federal question jurisdiction,4 so the claim can be removed to federal court only if there is another basis—such as diversity of citizenship—for federal jurisdiction.

Federal Deception Law: 9.2.2 Strategic Advantages of State RICO Laws As Compared to UDAP Statutes

State RICO laws offer an approach to fill in some of the gaps in state unfair and deceptive acts and practices (UDAP) statutes:

Private right of action. Although there is a private right of action under every state’s UDAP statute, there are gaps and exclusions in many states. Iowa, for example, precludes private UDAP claims against banks, insurance companies, and a number of other potential defendants. Many state UDAP statutes do not afford a private cause of action for non-consumer transactions. The state RICO statute may provide a cause of action in these situations.

Federal Deception Law: 9.4.1 Predicate Offenses

The typical state RICO statute lists a variety of state offenses that constitute predicate offenses, and some add certain federal crimes as predicate offenses. Many state RICO statutes include the same offenses as federal RICO, providing a parallel cause of action to a federal RICO claim. Some state RICO statutes also allow a claim to be based upon collection of an unlawful debt.32

Federal Deception Law: 9.4.2 Pattern Requirements

Some state RICO statutes are explicit about matters as to which federal RICO is silent or vague, such as the meaning of a “pattern of racketeering activity.”50 Hawaii’s RICO statute requires only one predicate offense.51 Others require at least three predicate offenses.52 A pattern under the Florida53 and Idaho54 RICO statutes is at least two p

Federal Deception Law: 9.4.3 Enterprise Requirements

Some courts, in interpreting state RICO statutes, simply follow U.S. Supreme Court definitions of “enterprise.”78 However, many state RICO statutes have simplified requirements about the relationship between the defendant’s racketeering acts and an enterprise.

Federal Deception Law: 9.5 Statute of Limitations

Most state RICO statutes set forth a statute of limitations period as well as a requirement for the timing between predicate offenses. Statutes of limitations vary from one year to ten years and are typically about five years.111 Most are tolled while related cases are pending. Some state RICO statutes also extend the time allowed between predicate offenses when the offender has been incarcerated.

Federal Deception Law: 9.6.1 Jurisdictional and Procedural Issues

State RICO actions will generally be tried in state court, but in the alternative a state RICO claim can usually supplement a related federal RICO claim in federal court.120 The Eleventh Circuit has held that federal courts have original jurisdiction over a state RICO claim that alleges only federal crimes as predicate offenses and raises very substantial federal questions, and that such a case is removable to federal court.121

Federal Deception Law: 9.7 Application of State RICO Statutes to Consumer Fraud

Like federal RICO statutes, state RICO statutes constitute a proper weapon for use against “garden variety” fraud.164 Indeed, many state RICO statutes explicitly list fraud, usury, and violations of certain consumer protection statutes as predicate offenses.165 These statutes demonstrate the legislative intent to treat consumer fraud as organized crime and to afford victimized consumers the powerful remedies of the RICO laws.

Federal Deception Law: 9.8 State Civil Theft Statutes

A number of states have civil theft laws that offer a private cause of action for conduct that violates state criminal laws. Because there is no requirement that there be an enumerated nexus to an enterprise, and there is no pattern requirement, these statutes are often more appropriate than state or federal RICO statutes for consumer claims. For transactions within their scope, these statutes may provide significant advantages over the state UDAP statute.

Federal Deception Law: 12.1.1 Federal Antitrust Laws

Federal antitrust law is comprised of a series of federal statutes prohibiting various types of anti-competitive commercial activity. The most important of these are the Sherman Act, the Clayton Act, and the Robinson-Patman Act.

Federal Deception Law: 12.1.2 State Antitrust Laws

Following the Supreme Court’s Illinois Brick decision, discussed in § 12.1.1, supra, many states enacted so-called “Illinois Brick Repealer Statutes,” expressly authorizing recovery of damages under state antitrust law to “indirect purchasers” of a price-fixed product.9 In California v.

Federal Deception Law: 12.3 Plain English Statutes

A number of states have enacted plain language laws39 that apply broadly to many types of transactions.40 Other states have plain language requirements that apply to certain types of transactions, such as rent-to-own (RTO), insurance, consumer credit, and hearing aids transactions.41

Federal Deception Law: 12.4.1 Introduction

Recent immigrants are often new to the English language as well. Many scam artists prey on this vulnerability, coercing non-English-speaking consumers to sign contracts or other documents that they do not understand. There are a number of ways to challenge contract transactions based on language barriers, including federal requirements, state statutes mandating the use of a non-English language, state UDAP laws, contract claims and defenses, and affirmative fraud claims.