Imagine you are a small-business owner or family in Minnesota trying to make a living, but large, national conglomerates do not play fair or by the same laws and rules. This uneven playing field causes Minnesota families to pay more and drives local Minnesota businesses to earn less.
Too often, Minnesota’s small businesses and consumers are harmed by nationwide companies, such as Safelite, an insurance-claims administrator and glass-repair company that abuses monopoly power, whose operation in the marketplace drives down rates and drives small, family-owned businesses away.
When these large companies do not follow the law and rules here in Minnesota, the Minnesota Department of Commerce’s responsibility is to protect consumers and ensure a fair marketplace.
In a Sept. 1 commentary (“Hold state accountable for agency’s abuse of power”), state Rep. Kelly Fenton, R-Woodbury, clearly shared with readers where she stands — that is, with big insurance companies and their network of glass companies rather than with the interests of Minnesota consumers and our state’s small businesses. I think she is on the wrong side.
As commerce commissioner, my top priority is to protect Minnesota’s consumers and ensure a fair marketplace for all.
Last year alone, the Department of Commerce received nearly 60,000 complaints and questions from Minnesotans regarding the more than 21 industries it regulates, including insurance, the financial sector and utilities.
Many of the consumer and business complaints mirror issues related to Safelite and the claims-handling practices employed by the company — insurers refusing to pay fair and reasonable rates as required by Minnesota law and using hard-sales techniques to steer consumers to use specific repair shops and depriving consumers of their choice.
These business practices are a prescription for monopoly, driving local companies out of business and undermining consumer choice.
More often than not, consumers are unfortunately nickel-and-dimed by large companies due to confusing practices and red tape.
These extra costs paid by Minnesotans add up over time to create unnecessary profits for companies. Their interest in continuing these practices is highlighted by the willingness of the companies to protect their business practices.
To protect itself, Safelite used the nickels and dimes paid by hardworking Minnesotans to hire out-of-state law firms, charging lawyer fees in excess of $1,000 an hour to sue the state and try to bully those who stand up to the unfair practices of this company. Safelite tried to send a message that they will be socked with an outrageously excessive bill.
Fenton is siding with the insurance companies and an out-of-state conglomerate at the expense of Minnesota’s small businesses and consumers. She would have the Commerce Department turn a deaf ear toward their complaints simply because they are trying to compete on a level playing field.
In fact, Fenton did not tell readers that, in its split decision, the U.S. District Court in Minnesota rejected Safelite’s attempt to overturn Minnesota’s long-standing consumer protection Mandatory Advisory Law, which requires that “before recommending a vendor,” Safelite offer the “insured the opportunity to choose the vendor.”
Insurers and Safelite “must also provide the following advisory: ‘Minnesota law gives you the right to go to any glass vendor you choose, and prohibits me from pressuring you to choose a particular vendor.’ ” Thankfully, the court upheld this Minnesota law as a constitutional disclosure requirement.
Fenton also did not tell readers that in the last legislative session she was co-author of a bill that would have given Safelite a special exemption from Minnesota’s insurance third-party-administrator laws. These laws protect consumers from unfair insurance-claims practices. Thankfully, this bill did not pass, and Safelite must continue to play by the same laws as every other third party hired by insurers to administer insurance claims.
Minnesota should not stop fighting to protect consumers and small business — and the Commerce Department will continue to stand up to help Minnesotans against large companies with deep pockets, like Safelite, that choose to file lawsuits against the state when they do not want to play by the rules.
Mike Rothman is Minnesota’s commerce commissioner.