Consumer protection violation versus poor customer service

Washington’s consumer protection laws make unlawful, among other things, “deceptive acts” by businesses.  See RCW 19.86.020.  “Deceptive” is not defined (and thereby limited) by the legislation.  Thus, courts have favored broad interpretation and application to serve the beneficial purposes of consumer protection. Panag v. Farmers Ins. Co. of Washington, 166 Wn.2d 27, 37, 204 P.3d 885, 889 (2009).

It has been generally held by the courts that deception exists if there is a representation or omission that is likely to mislead a reasonable Washington consumer. Peterson v. Kitsap Cmty. Fed. Credit Union, 171 Wn. App. 404, 426 (2012) [Some caselaw holds the test is whether the representation or omission is likely to mislead the “least sophisticated” Washington consumer. See Panag, 166 Wn.2d 27, 50.]

Consumers who deal with customer service representatives frequently-enough, particularly from large organizations, probably have plenty of stories of representations or omissions that were arguably deceptive.  The failure of institutions to consistently communicate accurately is often not intended but rather the product of a lack of attention and resources to that part of the business, which unfortunately is fairly common.  One Washington appellate judge famously lambasted large institutions for their inattention to consumers and failure to effectively communicate, calling them “too big to care.” See Dalton M, LLC v. N. Cascade Tr. Servs., Inc., 20 Wash. App. 2d 914 (2022) (Fearing, J. concurring) (copy of concurring opinion is excerpted at the end of this post)

The question that sometimes arises is – is poor communication from a business, which carries the capacity to deceive, a consumer protection violation?  The answer is not always “yes”.  Courts have generally been careful to distinguish conduct best described in common parlance as “poor customer service” from deceptive acts or practices targeted by the consumer protection laws.  See e.g. JPMorgan Chase Bank, Nat'l Ass'n v. Zalac, 1 Wash. App. 2d 1039 (2017); In re Nexus 6P Prods. Liab. Litig., 293 F. Supp. 3d 888, 931 (N.D. Cal. 2018); Singh v. Fannie Mae, No. C13-1125RAJ, 2014 U.S. Dist. LEXIS 15745 (W.D. Wash. Feb. 7, 2014) (the court can only “chide” the institution for its “abysmal customer service”).

Ultimately, whether the companies’ conduct is best characterized as poor customer service, or a deceptive act or omission actionable under the consumer protection laws, will come-down to the specific facts.  Consumers who believe they have suffered injury caused by poor customer service do not automatically have a claim under the consumer protection laws, but should nonetheless consult Washington counsel for an opinion.

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Fearing, J. (Concurring opinion)

¶142 The bad faith conduct of U.S. Bank falls into the category of what pundits Joanne Doroshow, Steven DuPuis, Ben Pickup, and Libby Mitchell all label as the action of a company “too big to care.” When a customer attempts to solve a dispute with a financial institution, insurance company, cable television company, rental car company, airline, manufacturer, cell phone company, managed care entity, or other megacorporation, the customer encounters headwinds, if not insurmountable obstacles.

¶143 The headwinds blow even before or at the time of purchasing a product or a service. After being quoted a price by a salesperson for a new cell phone, the customer walks to the register and then learns the cell phone company charges initiation fees. A satellite dish company advertises a price, but then the company adds other charges to the monthly bill never disclosed and insists that the customer sign an agreement that includes those charges. To schedule an appointment with a physician through a managed care entity, the patient must spend one hour and one half on a telephone hold to speak with a nurse who may or may not clear an appointment. A customer reserves a rental car through the Internet only to learn at the rental car local 965 counter that the company will charge a higher rental fee than advertised on the Internet. The agent at the counter explains that the *861 local rental car company is a franchisee of the worldwide company, and the local company is not responsible for the Internet website.

¶144 If the customer wishes to resolve a dispute regarding a product or service, the “too big to care” company erects other obstacles after the transaction. Assuming any local representative of the company can be found, the representative lacks any authority to resolve the dispute. Dalton M could not converse with any local agent of U.S. Bank, Northwest Trustee Services, or Ocwen Loan Servicing. Instead, the customer must employ phone calls to a distant location, if not another continent. An automated phone system will place the consumer on hold for interminable minutes. When an agent finally answers the phone, that agent either gives an ersatz name or gives only a first name. Company policy prohibits the employee from providing a full name, address, and direct phone number. With this ploy, the anonymous employee becomes absorbed into a crowd and assumes no responsibility to behave. The agent sympathetically listens to the customer's complaint, promises to investigate the problem, and pledges to contact the customer soon. The agent never responds. The customer calls the company again. After being on hold for interminable minutes, the customer is transferred from office to office. When an agent finally listens, the customer asks to speak with the first agent and gives that first agent's first name. The answerer responds that he knows no one by that name working for the company. The customer tells the second agent that the first agent took notes of the earlier conversation. The second agent states he cannot locate any notes of any earlier contact.

¶145 The second agent forwards the customer to a third agent of the “too big to care” company. The customer remains on hold again for interminable minutes. Then the customer discloses her complaint to the third agent as she had with the *966 first agent. The third agent promises to work to solve the problem and contact the customer soon. The customer never hears again from the third agent. After conversing with agents of Northwest Trustee Services for one month, the company directed Dalton M to contact Robinson Tait.

¶146 The customer begins to write letters to the megacorporation. The “too big to care” company ignores the initial letters. After several letters, an agent may call or e-mail the customer. As before, this agent lacks authority to solve any problem. The company permits the customer to speak only with an agent who lacks authority to solve the problem. This practice or policy shields any responsible person from contact with the complaining customer. The problem remains unsolved. U.S. Bank refused to deal directly with Dalton M, but instead insisted that Dalton M continue to communicate with Robinson Tait, who lacked authority to resolve the dispute. Robinson Tait assigned three different attorneys to assist Dalton M, none of whom solved any problem, but instead gave Dalton M false promises.

¶147 The “too big to care” company shuffles responsibility from employee to employee without any concern for the well-being of the customer. The company and its agents know that it can afford to be sued and that most consumers lack the will and the resources to hire an attorney. According to Joanne Doroshow, the large company violates contracts with consumers and laws intended to protect consumers with relative impunity, or at least without suffering the kind of punishment that would actually hurt. Endless stories abound of consumers feeling helpless yet continuing to do business with the same company because of the lack of choice of conducting business with a company that cares.

¶148 If the customer sues the “too big to care” company, the company blames the problem or the lack of a resolution of the problem on the customer. If the company settles with the consumer after the filing of a lawsuit, the company will insist on the consumer signing a nondisclosure and nondisparagement *967 agreement despite such a provision never being part of settlement negotiations. The company will refuse to pay the consumer's attorney fees.

¶149 Other more pressing problems plague the American economy than the conduct of the “too big to care” company. Still, the “too **862 big to care” phenomenon harms the economy by wasting hours of consumers' productive time. The phenomenon dehumanizes us. The phenomenon destroys trust in American business. According to a 1998 study by Paul Zak and Stephen Knack, this lack of trust impacts the American economy. If American consumers held the same trust as consumers in other developed countries, our GDP would be $16,000 per capita higher. Paul J. Zak & Stephen Knack, Trust and Growth (Sept. 18, 1998), https://ssrn.com/abstract=136961. The figure of $16,000 seems unusually high, but even a percentage of this amount is too high to squander.

¶150 More pressing problems plague the American judicial system. Still, the “too big to care” phenomenon troubles the judicial system by leading to lawsuits when the rare customer has the stamina and resources to right a wrong. Courts can play a role in limiting this bane by imposing fees and costs of litigation on the “too big to care” company when it fails to timely and fairly resolve a legitimate claim.