TITLE 6

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 25. PROHIBITED TRADE PRACTICES

Subchapter II. Consumer Fraud


As used in this subchapter, unless the context otherwise requires:

(1) "Advertisement" means the attempt by publication, dissemination, solicitation or circulation to induce, directly or indirectly, any person to enter into any obligation or acquire any title or interest in, any merchandise.

(2) "Examination" means inspection, study or copying.

(3) "Lease" means any lease, offer to lease or attempt to lease any merchandise for any consideration.

(4) "Local telephone directory" means a telephone classified advertising directory or the business section of a telephone directory that is distributed free of charge to some or all telephone subscribers in a local area.

(5) "Local telephone number" means a telephone number that has the 3-number prefix(es) used by the telephone service company(ies) for telephones physically located within the area covered by the local telephone directory in which the number is listed. The term does not include long distance numbers or toll or toll free numbers listed in a local telephone directory.

(6) "Merchandise" means any objects, wares, goods, commodities, intangibles, real estate or services.

(7) "Person" means an individual, corporation, government, or governmental subdivision or agency, statutory trust, business trust, estate, trust, partnership, unincorporated association, 2 or more of any of the foregoing having a joint or common interest, or any other legal or commercial entity.

(8) "Sale" means any sale, offer for sale or attempt to sell any merchandise for any consideration.

6 Del. C. 1953, § 2511; 55 Del. Laws, c. 46; 71 Del. Laws, c. 420, §§ 2, 3; 71 Del. Laws, c. 470, § 11; 73 Del. Laws, c. 329, § 35.;

The purpose of this subchapter shall be to protect consumers and legitimate business enterprises from unfair or deceptive merchandising practices in the conduct of any trade or commerce in part or wholly within this State. It is the intent of the General Assembly that such practices be swiftly stopped and that this subchapter shall be liberally construed and applied to promote its underlying purposes and policies.

6 Del. C. 1953, § 2512; 55 Del. Laws, c. 46.;

(a) The act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale, lease or advertisement of any merchandise, whether or not any person has in fact been misled, deceived or damaged thereby, is an unlawful practice. It shall also be an unlawful practice to misrepresent the geographic location of a business or supplier which raises or sells flowers and/or ornamental plants by:

(1) Listing a local telephone number in a local telephone directory if:

a. Calls to the telephone number are routinely forwarded or otherwise transferred to a business location that is outside the calling area covered by the local telephone directory other than to counties contiguous to this State; and

b. The listing fails to identify the locality and state of the supplier's business; or

(2) Listing a fictitious business name or an assumed business name in a local telephone directory if:

a. The name misrepresents the supplier's geographic location; and

b. The listing fails to identify the locality and state of the supplier's business.

(b) This section shall not apply:

(1) To the owner or publisher of newspapers, magazines, publications or printed matter wherein such advertisement appears, or to the owner or operator of a radio or television station which disseminates such advertisement when the owner, publisher or operator has no knowledge of the intent, design or purpose of the advertiser; or

(2) To any advertisement or merchandising practice which is subject to and complies with the rules and regulations, of and the statutes administered by, the Federal Trade Commission; or

(3) To matters subject to the jurisdiction of the Public Service Commission, or of the Insurance Commissioner of this State.

6 Del. C. 1953, § 2513; 55 Del. Laws, c. 46; 69 Del. Laws, c. 203, § 23; 71 Del. Laws, c. 420, § 1; 71 Del. Laws, c. 470, §§ 12, 13.;

Whenever the Attorney General has reason to believe that a person has engaged in, is engaging in, or is about to engage in, any practice declared by this chapter to be unlawful, the Attorney General may, pursuant to an order of any Judge of the Superior Court or of the Chancellor or Vice-Chancellor, prior to the institution of a civil or criminal proceeding against such person, issue and cause to be served upon such person, an investigative demand requiring such person to:

(1) File a statement or report in writing under oath on such forms as the Attorney General may prescribe as to all the facts and circumstances concerning the sale, lease or advertisement of merchandise by such person;

(2) Answer oral interrogatories under oath at such places and times as the Attorney General may reasonably specify as to all facts and circumstances concerning the sale, lease or advertisement of merchandise by such person; and

(3) Produce for examination the original or copy of any advertisement, merchandise or sample thereof, record, book, document, tabulation, map, chart, photograph, report, memorandum, communication, mechanical transcription, account, paper or computer record as the Attorney General may specify in the demand.

6 Del. C. 1953, § 2514; 55 Del. Laws, c. 46; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 470, §§ 7-10.;

Each Attorney General's investigative demand shall be in writing and shall:

(1) State the nature of the conduct constituting the alleged violation of this subchapter which is under investigation and the provision of law applicable thereto;

(2) Describe the class or classes of material to be produced thereunder with such definiteness and certainty as to permit such material to be fairly identified;

(3) Prescribe a return date which will provide a reasonable time within which the material so demanded may be assembled and made available for inspection and copying or reproduction; and

(4) Identify the custodian to whom such material shall be made available or the official before whom such oral examination shall take place or with whom such written reports shall be filed.

6 Del. C. 1953, § 2515; 55 Del. Laws, c. 46.;

No such demand shall:

(1) Contain any requirement which would be held to be unreasonable if contained in a subpoena issued by a court of this State in aid of a grand jury investigation of an alleged violation of this subchapter; or

(2) Require the production of any evidence which would be privileged from disclosure if demanded by a subpoena issued by a court of this State in aid of a grand jury investigation of an alleged violation of this subchapter.

6 Del. C. 1953, § 2516; 55 Del. Laws, c. 46.;

(a) On motion promptly made by a person who receives such a demand from the Attorney General, the judge who authorized the issuance of the investigative demand, if available, and if not, another member of the judge's court, upon notice and good cause shown, may make any order which is deemed appropriate and just to protect the person from an improper demand from the Attorney General.

(b) If the Attorney General determines that it would not be in the best interests of the investigation to disclose the evidence on which the Attorney General relied to establish the belief that unlawful conduct has occurred, is occurring or is about to occur, the Attorney General may request, and the court may examine, in camera, the evidence upon which the Attorney General relied in order to rule on such a motion.

6 Del. C. 1953, § 2517; 55 Del. Laws, c. 46; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 470, § 14.;

Pursuant to an order of the Superior Court or the Court of Chancery, the Attorney General may impound the original or copy of any document or other material produced in accordance with § 2514 of this title, which material shall be retained in the possession of such custodian and under such circumstances as the Court may designate until the completion of all proceedings in connection with which the same is produced.

6 Del. C. 1953, § 2518; 55 Del. Laws, c. 46; 71 Del. Laws, c. 470, § 6.;

Service of any demand by the Attorney General under § 2514 of this title shall be made personally within this State, if the person can be found therein; but if such service cannot be made, substituted service may be made in the following manner:

(1) Personal service outside of this State; or

(2) The mailing by registered mail to the last known place of business, residence or abode within or without this State of the person to whom such demand is directed; or

(3) As to any person other than a natural person, in the manner provided in § 321 or §§ 371 to 385 of Title 8 and in the manner provided in the procedural rules of the court authorizing the issuance of the demand; or

(4) Such service as the Court may direct in lieu of personal service within this State.

6 Del. C. 1953, § 2519; 55 Del. Laws, c. 46; 71 Del. Laws, c. 470, § 4.;

If any person fails to respond to any investigative demand issued by the Attorney General under § 2514 of this title, the Attorney General may, after due notice, apply to the court which authorized the issuance of the demand for an order, and the court, after a hearing on said application, may enter an order:

(1) Requiring said person to respond to the demand;

(2) Granting injunctive relief restraining any practice or act declared by this chapter to be unlawful;

(3) Vacating, annulling or suspending the corporate charter of a corporation created by or under the laws of this State or revoking or suspending the certificate of authority to do business in this State of a foreign corporation, or revoking or suspending any other licenses, permits or certificates issued pursuant to law to such person which are used to further the allegedly unlawful practice;

(4) Adjudging such person in contempt of court; and

(5) Granting such other relief or imposing any other penalty or fine as may be determined by the court in its discretion to be appropriate to obtain compliance with the Attorney General's investigative demand.

6 Del. C. 1953, § 2520; 55 Del. Laws, c. 46; 71 Del. Laws, c. 470, § 5.;

Repealed by 77 Del. Laws, c. 282, § 3, effective June 10, 2010.;

(a) Whenever it appears to the Attorney General that a person has engaged in, is engaging in or is about to engage in any practice declared by this subchapter to be unlawful, the Attorney General may institute an action in accordance with subchapter II of Chapter 25 of Title 29 in order to enjoin such practices or any acts being done in furtherance thereof. The complaint shall state the nature of the conduct constituting a violation of this subchapter and the relief sought thereunder. Such action shall be brought in a court of competent jurisdiction in the county in which the alleged unlawful practice has been, is, or is about to be performed.

(b) If a court of competent jurisdiction finds that any person has wilfully violated this subchapter, upon petition to the court by the Attorney General in the original complaint or made at any time following the court's finding of a wilful violation, the person shall forfeit and pay to the State a civil penalty of not more than $10,000 for each violation. For purposes of this subchapter, a wilful violation occurs when the person committing the violation knew or should have known that the conduct was of the nature prohibited by this subchapter.

6 Del. C. 1953, § 2522; 55 Del. Laws, c. 46; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 470, § 3; 77 Del. Laws, c. 282, § 1; 78 Del. Laws, c. 219, § 1.;

In actions filed under this subchapter, the Court of Chancery after a hearing may grant relief by issuing temporary restraining orders, preliminary or permanent injunctions, and such other relief as may be necessary to prevent any person from engaging in activities declared by this subchapter to be unlawful or which may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of any practice declared to be unlawful by this subchapter. Unless otherwise specified in this subchapter, the procedure for all such proceedings shall be as provided in the Rules of Procedure of the Court of Chancery or as established by the usual practice and procedure in said Court.

6 Del. C. 1953, § 2523; 55 Del. Laws, c. 46.;

(a) If it should appear to the Court of Chancery after a hearing, that a receiver should be appointed in cases of substantial and wilful violations of the provisions of this subchapter, the Court may appoint such receiver.

(b) The receiver shall have the power to sue for, collect, receive and take possession of all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes and property of every description, acquired by means of any practice declared to be unlawful by this subchapter, including property with which such property has been mingled if it cannot be identified in kind because of such commingling, and to sell, convey, and assign the same and hold and dispose of the proceeds thereof under the direction of the Court.

(c) Any person who has suffered damages as a result of the use or employment of any such unlawful acts or practices and submits proof to the satisfaction of the Court that that person has in fact been damaged, may participate with general creditors in the distribution of the assets to the extent of out-of-pocket losses.

(d) The receiver shall settle the estate and distribute the assets under the direction of the Court.

(e) The Court shall have jurisdiction of all questions arising in such proceedings and may make such orders and judgments therein as may be required.

6 Del. C. 1953, § 2524; 55 Del. Laws, c. 46; 70 Del. Laws, c. 186, § 1.;

(a) A private cause of action shall be available to any victim of a violation of this subchapter. Such cause of action may be brought in any court of competent jurisdiction in this State without prior action by the Attorney General as provided for in this subchapter.

(b) Subject to an order of the court terminating the business affairs of any person after receivership proceedings held pursuant to this subchapter, the provisions of this subchapter shall not bar any claim against any person who has acquired any money or property, real or personal, by means of any acts or practices declared by this subchapter to be unlawful.

6 Del. C. 1953, § 2525; 55 Del. Laws, c. 46; 74 Del. Laws, c. 113, §§ 1, 2.;

In any action brought under the provisions of this subchapter in which any person is found to have engaged in, or be about to engage in, a practice declared by this subchapter to be unlawful, the court may award costs to the Attorney General for the use of the State.

6 Del. C. 1953, § 2526; 55 Del. Laws, c. 46.;

(a) All money received by the State as a result of actions brought by the Attorney General pursuant to subchapter II of Chapter 25 of Title 29 or pursuant to the state or federal antitrust laws shall be credited by the State Treasurer to a fund to be known as the "Consumer Protection Fund."

(b) The Consumer Protection Fund will be a revolving fund and shall consist of funds transferred to the revolving fund pursuant to actions brought pursuant to subchapter II of Chapter 25 of Title 29 or an antitrust action, gifts or grants made to the revolving fund and funds awarded to the State or any agency thereof for the recovery of costs and attorney fees in a consumer fraud or an antitrust action; provided, however, that to the extent that such costs constitute reimbursement for expenses directly paid from constitutionally dedicated funds, such recoveries shall be transferred to the constitutionally dedicated fund.

(c) Money in the Consumer Protection Fund shall not exceed $300,000 in any fiscal year and shall be used solely for the payment of expenses incurred by the Attorney General in connection with its activities under subchapter II of Chapter 25 of Title 29, this chapter or the state or federal antitrust laws. At the end of any fiscal year, if the balance in the Consumer Protection Fund exceeds $3,000,000, the excess shall be withdrawn from the Consumer Protection Fund and deposited in the General Fund.

(d) The Attorney General is authorized to expend from the Consumer Protection Fund such moneys as are necessary for the payment of salaries, costs, expenses and charges incurred in the preparation, institution and maintenance of consumer protection and antitrust actions under state or federal antitrust laws.

(e) When it is legally established that the State, or agencies thereof, public bodies of the State or individuals have a right to a portion of funds in the Consumer Protection Fund, the Attorney General is authorized to approve release of such funds to the appropriate fund, entity or recipient.

(f) From time to time as determined by the Delaware State Clearinghouse Committee, the Attorney General shall submit a detailed report to members of the Committee of revenues, expenditures and program measures for the fiscal period in question. Such report shall also be sufficiently descriptive in nature so as to be concise and informative. The Committee may cause the Attorney General to appear before the Committee and to answer such questions as the Committee may require.

64 Del. Laws, c. 303, § 1; 69 Del. Laws, c. 151, § 2; 69 Del. Laws, c. 203, §§ 13, 17-21; 77 Del. Laws, c. 282, § 1; 78 Del. Laws, c. 219, §§ 2-4; 79 Del. Laws, c. 292, § 29.;