Vermont Demand Letter

Introduction

Key Things to Know

1. 1

   Vermont's Consumer Protection Act does not require you to send a demand letter before suing for damages: 9 V.S.A. Section 2461(b) lets a consumer sue directly for damages, reasonable attorney's fees, and exemplary damages of up to three times the consideration paid, with no precondition that a written demand go out first.

2. 2

   Even without a notice requirement, a 1974 Vermont Attorney General rule, Consumer Fraud Rule CF 104, bars a creditor collecting its own consumer debt, not only a third-party collection agency, from threatening arrest or seizure of property unless that action is actually contemplated and permitted by law, with proper notice and a court order, from falsely accusing the debtor of a crime, or misrepresenting the claim in a collection letter arising out of a consumer transaction.

3. 3

   If your claim involves a dishonored check, 9 V.S.A. Section 2311 lets you recover a flat $50.00 in statutory damages, not a multiple of the check amount, but only if you first send a written demand meeting that section's content rules and wait 30 days; without that demand you can still recover the check amount, bank fees, court costs, and interest, just not the $50.00 or attorney's fees.

4. 4

   If your claim is a construction-contract payment dispute, Vermont's Prompt Payment Act, 9 V.S.A. Sections 4001 through 4009, lets the substantially prevailing party recover reasonable attorney's fees and a 1 percent per month penalty on wrongfully withheld payment, without a presentment step before suing.

5. 5

   Vermont's small claims docket of the Civil Division of the Superior Court hears claims up to $10,000.00, but a debt-collection claim arising from a consumer credit transaction or medical debt is capped at $5,000.00 in that same court, and any party may choose to be represented by an attorney (12 V.S.A. Section 5531; Section 5536).

6. 6

   Vermont gives six years to sue on a written or oral contract or an open account (12 V.S.A. Section 511), and three years to sue for damage to personal property (Section 512(5)).

7. 7

   Except as specifically provided by law, Vermont's legal interest rate is 12 percent per annum computed by the actuarial method under 9 V.S.A. Section 41a(a); no Vermont statute ties the start of interest to the date of a demand letter.

Vermont Requirements for Demand Letter

• No Pre-Suit Demand for Consumer Act Claims

  9 V.S.A. Section 2461(b) lets a consumer sue directly for damages, reasonable attorney's fees, and exemplary damages of up to three times the consideration paid, without first sending a written demand or notice.

• AG Rule Reaches First-Party Creditors

  Consumer Fraud Rule CF 104, adopted under 9 V.S.A. Section 2453(c), defines a debt collector to include creditors and their agents collecting their own debt, not only third-party agencies, and bars threatening arrest or seizure of property unless that action is actually contemplated and permitted by law, with proper notice and a court order, falsely accusing the debtor of a crime, or misrepresenting the claim in a collection letter arising out of a consumer transaction.

• Bad-Check Demand Unlocks $50.00 and Fees

  9 V.S.A. Section 2311(a)-(b) makes a $50.00 statutory-damages award and attorney's fees available only after a 30-day written demand meeting the section's content rules; without that demand, the holder can still recover the check amount, bank fees, court costs, and interest.

• Bad-Check Demand Content and Delivery

  The Section 2311(b) demand must state the date the check was written, the payee, bank fees, mailing costs, the check amount, and the date payment is due, and is conclusively given when sent by certified mail and first-class mail, or by first-class mail alone once supported by an affidavit of service and three days have passed after the affidavit is signed.

• Prompt Payment Act Fee-Shifting for Construction Claims

  9 V.S.A. Section 4007(c) awards the substantially prevailing party reasonable attorney's fees on a construction-contract payment claim once arbitration or litigation is commenced, with no prior presentment step, and Section 4007(b) adds a 1 percent per month penalty on payment wrongfully withheld.

• Small Claims Limit Split for Consumer Debt

  12 V.S.A. Section 5531(a)-(b) sets the small claims docket's general limit at $10,000.00, but Section 5531(e) caps a debt-collection claim arising from a consumer credit transaction or medical debt at $5,000.00 in that same court.

• Attorneys Freely Allowed in Small Claims

  12 V.S.A. Section 5536 entitles any party to be represented by an attorney in Vermont small claims court, unlike states that restrict attorney representation there.

• Six-Year Limit on Contract and Account Claims

  12 V.S.A. Section 511 gives six years to sue on a written contract, an oral contract, or an open account, and Section 512(5) gives three years to sue for damage to personal property.

• Fixed 12 Percent Legal Interest Rate

  9 V.S.A. Section 41a(a) sets Vermont's legal interest rate at 12 percent per annum computed by the actuarial method, except where another rate is specifically set by law.