Section 3 Statutory Fraud - An Overview of the Missouri Merchandising Practices Act

• Library: Consumer Law and Practice 2010

The MMPA (Missouri Merchandising Practices Act), Chapter 407, RSMo, was created to supplement the definition of common-law fraud and creates a statutory fraud action distinct from common-law fraud. State ex rel. Danforth v. Independence Dodge, Inc., 494 S.W.2d 362, 368 (Mo. App. W.D. 1973). The purpose of the MMPA is "an attempt to preserve fundamental honesty, fair play and right dealings in public transactions." Id.

Section 407.010, RSMo 2000, sets out the definitions applicable to the MMPA, defining terms such as advertisement, merchandise, sale, trade, and commerce.

Section 407.020.1, RSMo Supp. 2010, prohibits:

The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce or the solicitation of any funds for any charitable purpose, as defined in section 407.453, in or from the state of Missouri . . . .

Such activities are prohibited whether committed "before, during or after the sale, advertisement or solicitation." Id. The carrier of the advertising (television station, newspaper, magazine, etc.) is not liable unless it knew of the advertiser's intent or purpose. Section 407.020.2. The MMPA also generally does not apply to entities subject to licensing by the Missouri Department of Insurance, Financial Institutions and Professional Registration, the Division of Credit Unions, or the Division of Finance. Id.

Willful and knowing violation of the MMPA with the intent to defraud is a class D felony. Section 407.020.3. Criminal enforcement responsibilities are given to prosecuting attorneys and the attorney general. Section 407.020.4. When a civil enforcement action is filed by a private party, the clerk of the court is to inform the attorney general and to mail the attorney general a copy of the judgment or decree in the case. Section 407.025.7, RSMo 2000.

Special restrictions are made on long-term care facilities in § 407.020.5 and .6.

Section 407.025.1 provides a cause of action for:

Any person who purchases or leases merchandise primarily for personal, family or household purposes and thereby suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful by section 407.020

Venue is in the circuit court of the county where the seller or lessor resides or where the transaction took place. Id. The statute provides for actual damages and, in the court's discretion, punitive damages, attorney fees, and equitable relief. Id.

Section 407.025.2-.6 authorizes class actions to enforce the MMPA and sets forth the requirements for such actions. See § 13.22-13.25 below for a further discussion of class actions.

A petition in an action for damages under the MMPA must contain:

a description of the plaintiff and defendant;

an allegation regarding jurisdiction and venue;

an allegation showing that the plaintiff purchased or leased merchandise primarily for personal or...