Consumer Protection

How the Maryland Consumer Protection Act Protects Tenants

The Maryland Consumer Protection Act (MCPA) protects “consumers” from several wrongful actions by “merchants,” including wrongful actions regarding “consumer realty.”  The term consumer includes lessees (tenants are lessees) and the term merchants includes landlords.  Consumer realty means real property that is primarily used for personal, household, family or agricultural purposes.

The MCPA states that a merchant may not engage in any “unfair or deceptive trade practice” when renting, selling, or offering to rent or sell consumer realty.  These practices are illegal whether or not the tenant is actually deceived or tricked in any way.

An unfair or deceptive trade practice includes the following: 

  • A false or misleading oral or written statement, visual description, or other             representation that has the capacity, tendency or effect of deceiving or misleading       
  • Representation that realty has a sponsorship, characteristic, or use that it does not have, or that it is of a particular standard, quality, or style that it is
  • Failure to state a material fact if the failure deceives or tends to
  • Use of a clause in a contract, including a lease, which waives the consumer's right to use a legal defense.

Examples are failure to disclose health and safety issues such as defective door locks and the lack of fire exits.

However, the MCPA’s protections are limited to only a violation that occurs during the establishment of the landlord/tenant relationship.  Richwind Joint Venture v. Brunson, 645 A.2d 1147, 335 Md. 661 (1994).   The court stated that at the time the lease is entered into, the landlord has superior knowledge.  However, the tenant has superior knowledge while in exclusive possession of the leased premises. 

A tenant (consumer) who believes to be a victim of an unfair or deceptive trade practice may file a complaint to get payment for losses resulting from the unfair or deceptive practice. In addition to this payment, a judge may award the tenant attorney’s fees if the tenant’s lawsuit is successful.

The Basics of Debt Collection

The Federal Fair Debt Collection Practices Act (FDCPA) was created to stop abusive debt collection practices.  According to the FDCPA, a debt collector is someone whose principal purpose is to collect debts or who regularly attempts to collect debts.  Generally the FDCPA applies only to third party debt collectors, not internal collectors for an original creditor. 

If a debt collector communicates with a person other than the consumer, the debt collector must identify themselves, but they do not have to disclose their employer, unless specifically asked.  Moreover, the debt collector cannot tell the third party that the debtor owes a debt nor can a debt collector send mail to a third party that divulges that the debtor owes a debt.  The debt collector is limited to asking the third party for the consumer’s location.  If the debt collector learns that the consumer has an attorney and can readily ascertain the attorney’s contact information, the debt collector cannot communicate with a third party to ascertain the consumer’s location, unless the attorney fails to respond within a reasonable period of time to the debt collector. 

Unless a debt collector has permission from a consumer or from the courts, they are limited in the manner that they can communicate with the consumer.  Without permission, a debt collector cannot communicate with a consumer

  • at an unusual place or inconvenient time (It is presumed that before 8am and after 9pm are inconvenient times.);
  • if the consumer is represented by an attorney and the debt collector knows this or the information regarding legal representation was readily ascertainable, unless the attorney fails to respond within a reasonable period of time; 
  • at the consumer’s place of employment, if the debt collectors knows or has reason to knowthat the consumer's employer prohibits the consumer from receiving such communication; and
  • if a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer,  except
  • to advise the consumer that the debt collector's further efforts are being terminated; or to notify the consumer that the debt collector or creditor may invoke or revoke specified remedies which are ordinarily used by such debt collector or creditor.

In addition to the above protections, a debt collector cannot harass a consumer.  This means that a debt collector cannot threaten to or use violence or any other criminal means to harm the consumer physically, the consumer’s property, or their reputation.  The debt collector cannot use profane or abusive language or publish the consumer’s name as owing a debt, except to a consumer reporting agency.  Nor can the debt collector threaten to sale the debt to force payment.  Debt collectors cannot continuously call a consumer to annoy or abuse the consumer or call a consumer without disclosing the caller’s identity.

Debt collectors may not use any false or misleading representations to collect a debt.  This means that the collector cannot make false claims

  • that they are vouched for, bonded by, or affiliated with the United States or any State;
  • about the character, amount, or legal status of any debt;
  • about any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt;
  • that the individual is an attorney or that any communication is from an attorney;
  • that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to lose any claim or defense or become subject to a prohibited practice;
  • representing or implying that the consumer committed any crime or other conduct in order to disgrace the consumer;
  • to collect or attempt to collect any debt or to obtain information concerning a consumer;
  • that accounts have been turned over to innocent purchasers for value;
  • that documents are legal process when they are not or that documents are not legal process when in fact they are legal process; or
  • that a debt collector operates or is employed by a consumer reporting agency.

Nor can the debt collector

  • state that the nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person unless such action is lawful and the debt collector or creditor intends to take such action;
  • threaten to take any action that cannot legally be taken or that is not intended to be taken;
  • communicate or threaten to communicate credit information which is known or which should be known to be false;
  • use any written communication that represents to be a document authorized, issued, or approved by a government agency;
  • fail to disclose in communications with the consumer the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose; or
  • use an organization’s name other than the true name of the debt collector's organization.

Debt collectors are also not allowed to use unfair or unconscionable means to collect or attempt to collect a debt.  This includes

  • collecting an amount not expressly authorized by an agreement;
  • accepting a check postdated by more than five days, unless the debt collector informs the consumer in writing of his intent to deposit the check or instrument not more than ten nor less than three business days prior to such deposit;
  • concealing the purpose of the communication;
  • taking or threatening to take a non-judicial action to obtain or disable the property if the debt collector does not have a right to do so or does not actually have an intent to; or
  • communicate by mail if the outside of the mail indicates a debt is owed.

When contacting a consumer, unless contained in the initial communication, a debt collector must send the consumer a letter detailing the amount of debt, to whom the debt is owed, and inform the consumer that within thirty days after receipt of the letter, if the consumer “disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.” Moreover, the letter must contain a statement that unless the consumer disputes the debt or part of the debt in writing, “the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.” Lastly, the letter should state that “upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.”

If the consumer notifies the debt collector in writing within the thirty-day period that he or she is disputing all or a portion of the debt or requests the name and address of the original creditor, the debt collector has to stop collection actions until they verify the information that they are requesting.  If the consumer decided to pay part of the alleged debt, the debt collector cannot apply the payment to any disputed amount.

If a debt collector violates any of the protections afforded to the consumer they can be held liable for civil damages. However, if the debt collector can prove that their action was not intentional and resulted from a bona fide error, they may be able to avoid liability. 

There is an abundance of law that may be to be used to strengthen an individual’s or a company’s chance of success in a debt collection matter.   An attorney versed in this sort of law can be a valuable asset.  If you need legal assistance with a debt that is being collected, contact the Law Office of Phillip E. Chalker at or (443) 961-7345.

Usurious Contracts: Identifying Illegal Interest Rates

The general rule in Maryland is that lenders may not charge an effective rate of simple interest greater than six percent annually.  An effective rate of simple interest is a flat interest rate, not a compound interest.  However, because lenders can require borrowers to pay interest as interest accrues, calculating the amount of interest charged is a little more complicated than just multiplying the principal by the rate of interest.  Despite the general rule, there are many circumstances when lenders can and do charge more six percent. 

For example, a lender may charge up to 24 percent interest if there is a written loan and the collateral is not a savings account, the loan is unsecured, or the loan is not secured by real property.  (If the loan was made before July 1, 1982, the interest rate is limited to 18 percent.)  However, if a lender is going to charge a rate of interest of 24 percent, the loan needs to meet a few requirements. These requirements can be found in Md. Commercial Law Code Ann. §12-103.  Typically, the interest rate on car loans and on such things as furniture can reach as high as 24 percent.

Although a loan on its face value may claim to charge up to 24 percent, lenders sometimes illegally charge more by sneaking in hidden fees.  A loan that charges more than the legal rate of interest is called usurious and is prohibited by law.  In many circumstances, the law considers fees, such as processing fees and financing fees, to be interest.  Below are some circumstances that are considered usurious and, therefore, illegal.

  • If a lender is charged compound interest and the sum of the interest exceeds a flat interest rate of 24 percent, that contract is usurious and prohibited by law. 
  • If there is an interest rate approaching 24 percent and the lender charges a processing fee or financing fee, the contract could be usurious.

If the requirements found in Md. Commercial Law Code Ann. §12-103 are not met, lenders can only charge 8 percent on the on the unpaid principal balance of a loan if there is a written agreement signed by the borrower which sets forth the stated rate of interest. However, if the loan is a written agreement secured by a certificate of deposit held by the borrower, the lender cannot charge an interest rate in excess of 2 percent of the interest rate payable on the certificate of deposit.

Generally, if the loan is secured by a mortgage or first deed of trust on any interest in residential real property, a lender can charge any interest rate, providing certain requirements are met.  Once again, these requirements can be found in Md. Commercial Law Code Ann. §12-103.  In addition, any interest rate can be charged on commercial loans in excess of $ 15,000 not secured by residential real property and on commercial loans in excess of $ 75,000 secured by residential real property.

If you have concerns about a contract, the rate of interest that you were charged, or on another legal matter, please contact the Law Office of Phillip E. Chalker at or (443) 961-7345.

Repossession: Consumer Rights and Lender Obligations

Maryland law provides a process by which a lender may repossess goods securing a loan.  For example, assume a person obtains a loan to person to buy a vehicle and that loan is secured by the purchased vehicle.  If that purchaser does not live up to the repayment provisions of that loan, the lender may repossess that vehicle.  The legal term for not repaying the loan is “default.”  Generally, a borrower is in default if that borrower fails to make a payment due under the loan’s terms.   

At least 10 days before repossessing the goods that secured the loan (in this case the vehicle) on which the borrower defaulted, the lender MAY, in writing, inform the borrower of his intent to repossess the goods.  If the lender does not send one of these discretionary notices, they cannot charge the borrower any repossession expenses.  Regardless of whether the lender informs the borrower of their intent to repossess the goods, within 5 days after a lender repossess goods, that lender must send or deliver to the borrower a notice.  The notice must briefly state the right of the borrower to retake possession of the goods and the amount payable for them. (Retaking possession of the goods is legally referred to as redeeming the goods).  The notice must also state the right of the borrower as to a resale and the borrower’s liability for any deficiency.  (Resale is the sale of the borrowed goods by the lender.  The proceeds of the sale are used to pay the deficiency.)  Further, the lender must inform the borrower where the goods are stored and the address where any payment is to be made.  The lender cannot sell or dispose of the goods for at least 15 days after such written notice.

During this 15 day period, the borrower may redeem and take possession of the goods and resume performance of the loan agreement.  Basically, to redeem the goods, the borrower must pay any amounts due under the loan agreement.  Further, if the lender provided advance notice, the borrower must pay the expenses of retaking and storing the goods.

If the borrower does not redeem the goods, the lender may sell the goods at a private or public sale.  At least 10 days before the sale, the lender must notify the borrower in writing of the time and place of sale.  If the goods are sold at a private sale, the lender must, in writing, provide the borrower a full accounting of the sale.  The Commissioner of Financial Regulation may determine that the sale was not done in a commercially reasonable manner and enter an order disallowing any claim for a deficiency balance.  If the goods are sold at a public sale, the lender must provide the borrower a written statement showing the distribution of the sale proceeds.

Finally, the lender is not required to sell the goods.  Rather the lender may keep the repossessed goods.  If the lender keeps the goods, the borrower is discharged from all obligations.

If the lender does not follow these requirements, they are prevented from collecting a deficiency judgment from the borrower.

If you have a question regarding the repossession of goods or need help in a legal matter, contact The Law Office of Phillip E. Chalker at (443) 961-7345 or

A Vehicle Buyer's Protections When Financing Is Not Approved

If a consumer buys or leases a motor vehicle from a dealer and the dealer arranges for the consumer to receive financing through a third party, Maryland law provides both the consumer and the dealer certain protections.  When a consumer buys a vehicle, both the consumer and the dealer must sign a dealer provided notice that discusses your legal protections.   

That notice should inform the consumer that if the third party finance company does not approve the financing within 4 days of the delivery of the vehicle to the consumer, the dealer must notify the consumer in writing that the financing has not been approved.  Upon receiving this notice, the consumer or the dealer may cancel the lease or sale.  Alternatively, the consumer and the dealer may agree on new financing terms.

If the consumer or the dealer cancels the sale or lease because of financing, the dealer must immediately return all money paid to the consumer.  This includes the down payment, any subsequent payments, all taxes, fees (including titling fee), and any other charges assessed.  If the consumer traded in a vehicle, the traded in vehicle must be returned to the consumer in the same condition in which it was when delivered it to the dealer.  Furthermore, the dealer is not permitted to charge the consumer for use of the vehicle.

If your financing fell through, and the dealer does not comply with these requirements, you may be entitled to damages plus attorney fees. Contact The Law Office of Phillip E. Chalker at (443) 961-7345 or at to discuss your case.

Of note, within two days of receipt of the notice that financing was not approved, consumers must return the vehicle to the dealer.  Except for normal wear and tear, the vehicle must be returned in the same condition in which it was when the consumer received it.  If the consumer does not return the vehicle, the dealer may repossess it.  However, even if the vehicle was not returned to the dealer a consumer may be able to collect financial damages.

Arbitration in Consumer Protection

Sometimes disputes between parties can be solved through arbitration, a process that is often quicker and cheaper than going to court.  Typically, during an arbitration proceeding, two parties present evidence and their arguments to an impartial individual, an arbitrator.  During arbitration, parties can be represented by an attorney and examine witnesses.  Based on the evidence, the arbitrator renders a decision on the matter.  Juries are not used in arbitration.  Under Maryland law, arbitration decisions in matters related to consumer protection are binding, except for limited appeals allowed by the Maryland Uniform Arbitration Act.   

In Maryland, when both the business and the consumer agree, consumer protection matters can be submitted for arbitration by the Consumer Protection Division.  Consumer protection matters include the sale of goods and services, credit, and realty.  In these instances, the arbitrator may award specific performance or the payment by the business to the consumer.  Moreover, in some instances, the arbitrator can award consequential damages. However, claims for punitive damages cannot be arbitrated.

Anyone that conducts business in Maryland can agree to submit all future disputes or a particular class of disputes to arbitration, so long as the dispute is covered by consumer protection regulations and the consumer also agrees to participate in the arbitration. An arbitration agreement must in writing and signed.  If one party is able to amend the arbitration agreement at any time and at their discretion, the arbitration contract might be unenforceable because it would mean that a party is not bound to arbitration. 

If you would like help in your arbitration matters, contact the Law Office of Phillip E. Chalker at (443) 961-7345 or at