UDAAP is an acronym representing laws that prohibit Unfair, Deceptive, or Abusive Acts or Practices in the context of trade or business. This includes misrepresentation, deception, false advertising, or false promises. These laws emerged following the Dodd-Frank Wall Street Reform and Consumer Protection Act that was enacted in response to the 2008 financial crisis. The ultimate goal with these laws is geared towards protecting consumers involved in financial transactions, educating consumers on their rights, and allowing them access to information and resources to best inform their decisions.
The organizations which regulate and enforce UDAAP laws are the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). The FTC expanded the initial UDAAP laws in 2004 to include unfair and deceptive acts and practices. Some standards for unfairness, in particular, include if it causes or is likely to cause substantial injury to consumers, the injury is not reasonably avoidable by consumers, and the injury is not outweighed by countervailing benefits to consumers or to competition.
The Consumer Fraud Act, Ariz. Rev. Stat. Ann. Section 44-1521 through 44-1534, is Arizona’s UDAP statute prohibiting unlawful practices such as deceptive acts and practices, false promises, misrepresentations, or concealment of material facts in the context of merchant-consumer transactions. Generally, this statute is considered relatively weak due to the fact that it does not specifically account for “unfair practices,” so it is not as broad in that scope as other states are in their UDAP statutes.
A lawsuit under this act must be brought within the statute of limitation, which is one year. After a successful case, the plaintiff can be awarded compensatory damages and willful violators may be subject to civil penalties. Prevailing plaintiffs are not entitled to attorney’s fees. In order to file a lawsuit under the Consumer Fraud Act, the plaintiff must prove the following elements:
- The defendant engaged in deception, used a deceptive act or practice, fraud, or false pretense, made a false promise or misrepresentation, or concealed, suppressed, or omitted a material fact in connection with the sale or advertisement of merchandise,
- The defendant intended that others rely upon the defendant’s unlawful practice
- The plaintiff suffered damages as a result of relying on the defendant’s unlawful practice, and
- The amount of the plaintiff’s damages.
UDAAP and Arbitration
Arbitration is an out-of-court proceeding where a neutral third-party (the arbitrator) hears all the evidence from both sides and makes a decision about the case, which may or may not be binding. Binding arbitration, the most common type of arbitration, means that the decision is enforceable in a court of law and participants agree to abide by the decision. Some contracts allow for non-binding arbitration, meaning that either party is free to reject the arbitrator’s decision and take the dispute to court, although this is less common.
Arbitration has many advantages over traditional litigation, including being faster, more flexible in scheduling, and more efficient. Arbitration also avoids the hostility that can accompany court cases, remains confidential, and allows for an arbitrator who is a professional in the field to be selected instead of a judge who may not have familiarity with the issues at hand.
If you have a UDAAP claim, chances are we can bring your claim in arbitration. Arbitration is a very useful tool for resolving disputes, and Agruss Law Firm, LLC can help. With our expert guidance, we bring the big companies to the table and provide the support needed to get your bills corrected, credit reports fixed, improper fees refunded, and more. Let us pick up the sword for you; you have nothing to lose.
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