Consumer Protection and Complaint Handling
What to know
Consumer protection focuses on disclosure, fair dealing, and a functioning complaint process. Candidates should understand how complaints are filed, the regulator's investigative authority, and the licensee's duty to cooperate and respond truthfully. Know the concepts of material fact, puffery vs. misrepresentation, and the duty to recommend professional advice when a question exceeds the licensee's competence.
Traps
- Material fact questions: a fact is material if a reasonable consumer would consider it important. Latent defects known to the licensee generally must be disclosed.
- Puffery ("charming home") is opinion; misrepresentation ("new roof") is a statement of fact that can be false.
- A licensee may not retaliate against or discourage a consumer from filing a complaint.
- Cooperation with an investigation is mandatory; asserting a right to remain silent in a regulatory inquiry is generally not an option.
Rule of thumb
When in doubt, disclose in writing and recommend a specialist. The downside of over-disclosure is small; the downside of concealment is discipline.
Worked example
A seller tells the licensee the basement floods. The buyer asks about water. The licensee says nothing. The correct analysis: the licensee has a duty to disclose a known material fact affecting value and use, and silence here is a misrepresentation by omission.