Bill Summary – FastDemocracy

Legislative Analysis
                                                                            Phone: (517) 373-8080
VETERANS’ BENEFIT SERVICES UNDER THE
                                                                            http://www.house.mi.gov/hfa
MICHIGAN CONSUMER PROTECTION ACT
                                                                            Analysis available at
Senate Bill 1103 as passed by the Senate                                    http://www.legislature.mi.gov
Sponsor: Sen. Sylvia A. Santana
House Committee: Government Operations [Discharged]
Senate Committee: Veterans and Emergency Services
Complete to 12-19-24
SUMMARY:
       Senate Bill 1103 would amend the Michigan Consumer Protection Act, which among other
       things prohibits a person engaged in trade or commerce from providing or offering to provide
       a veterans’ benefit service to a veteran or a veteran’s family member unless the person is
       employed by a government agency authorized to do so, is an accredited individual under
       applicable federal laws and regulations, or is an employee or representative of a recognized
       veterans’ services organization.
               Veterans’ benefit service means the preparation, presentation, or prosecution of a
               claim (or advice or representation concerning the preparation, presentation, or
               prosecution of a claim) affecting an individual who has filed or has expressed an
               intention to file an application for veteran, dependent, or survivor pension, or medical,
               or disability benefits under laws administered by the U.S. Department of Veterans
               Affairs or the Department of Military and Veterans Affairs pertaining to veterans,
               dependents, and survivors.
       The bill would amend the above provisions to newly allow an individual who is not accredited
       under the federal laws and regulations applicable to the administration of veterans’ benefits to
       provide only those veterans’ benefit services that do not include representing a veteran or a
       veteran’s family member as an agent or attorney.
       In addition, the act now prohibits a person from being compensated for providing or offering
       to provide a veterans’ benefit service to a veteran or veteran’s family member unless certain
       conditions (such as required disclosures) are met. The bill would newly require, among these
       conditions, that a person seeking to receive compensation for a veterans' benefit service in
       connection with an initial claim for disability benefits must do all of the following:
           • Memorialize the specific terms under which the amount to be paid must be determined
               in a written agreement signed by both parties.
           • Receive only compensation that is purely contingent upon an increase in benefits
               awarded, and does not exceed five times the amount of the monthly increase in benefits
               awarded based on the claim. (An initial or nonrefundable fee could not be charged.)
           • Receive no compensation for any services rendered in connection with any claim filed
               within the one-year presumptive period of active-duty release, unless the veteran
               acknowledges by signing a waiver that they are within this period and are choosing to
               deny free services that are available to them.
           • Ensure that no international call centers or data centers are used for processing veterans'
               personal information.
House Fiscal Agency                                                                           Page 1 of 3
             •   Ensure that a veteran's personal log-in, username, or password information is not used
                 to access that veteran's medical, financial, or government benefits information.
             •   Ensure that any individual who has access to veterans' medical or financial information
                 undergoes a background check prior to having access to that information. The
                 background check would have to be conducted by a reputable source and include
                 identity verification and a criminal records check.
        However, the above condition would not apply to agents or attorneys who are accredited and
        regulated by the United States Department of Veterans Affairs.
        Finally, the bill would amend the definition of the term veterans’ benefit service (shown above)
        to additionally apply to disability benefits.
        A violation of the bill’s provisions would be an unfair trade practice under the act and subject
        to remedies as described in Background, below. (Violation of the act’s current provisions
        regarding veterans’ benefit services is also an unfair trade practice under the act.)
        MCL 445.1103
BACKGROUND:
        Remedies
        A person who suffers a loss due to a violation of the Michigan Consumer Protection Act can
        sue to recover $250 or actual damages, whichever is greater, along with reasonable attorney
        fees. Any person can sue for a declaratory judgment that an act or practice is unlawful under
        the act or for an injunction against someone engaging or about to engage in such conduct. In
        addition, the attorney general or a prosecuting attorney can bring an action to permanently
        enjoin a person from engaging in an unlawful act or practice, and a court may assess a fine of
        up to $25,000 if the conduct is found to be unlawful. The act also allows for a class action to
        be brought under certain circumstances.
        Applicability
        Section 4(1)(a) of the Michigan Consumer Protection Act exempts a transaction or conduct
        specifically authorized under laws administered by a regulatory board or officer acting under
        state or federal law. The Michigan Supreme Court has held that this exemption applies when
        “the general transaction is specifically authorized by law, regardless of whether the specific
        misconduct alleged is prohibited.” 1 That is, rather than a business practice being exempt from
        the act if it is specifically authorized by law, the court ruled that a practice whose legality under
        the act is in dispute is exempt from the act if the general activity being engaged in is authorized
        and regulated under law. For example, if a business is an industry regulated under a state or
        federal law and the transaction or conduct alleged to be deceptive is within the regulatory
        scheme of that industry, the exemption under section 4(1)(a) would likely apply and a person
        could not—under the Michigan Consumer Protection Act—sue for damages or petition to have
        the business stop engaging in the conduct alleged to be deceptive.
1
 Smith v Globe Life Insurance Company, 460 Mich 446 (1999). The court affirmed Smith in Liss v Lewiston-Richards,
Inc, 478 Mich 203 (2007).
House Fiscal Agency                                                SB 1103 as passed by the Senate    Page 2 of 3
FISCAL IMPACT:
       The bill would have no fiscal impact on the state or local units of government.
                                                          Legislative Analyst: Rick Yuille
                                                               Fiscal Analyst: Michael Cnossen
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency                                          SB 1103 as passed by the Senate   Page 3 of 3
Statutes affected: 
Senate Introduced Bill: 445.903
As Passed by the Senate: 445.903