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 Colorado Consumer Protection Act, Colo. Rev. Stat. Sections 6-1-101 through 6-1-115, is Colorado’s UDAP statute prohibiting deceptive business practices. Colorado’s law is considered particularly weak due to the specificity of what is outlined as deceptive and its narrow scope. However, it does not include blanket exemptions for specific industries.
The statute of limitations is three years, meaning that an action must begin within three years after the consumer discovers or should have discovered the false, misleading, or deceptive act or practice. Successful plaintiffs can be awarded compensatory damages as well as attorney’s fees associated with the case. The elements that a plaintiff must prove in a lawsuit under this law include the following:
- The plaintiff must establish conduct by the defendant that constitutes a deceptive trade practice,
- The deceptive trade practice must occur in the course of such person’s business, vocation, or occupation,
- The challenged practice must significantly impact the public as actual or potential consumers of the defendant’s goods, services, or property,
- The plaintiff must suffer injury to a legally protected interest, and
- The plaintiff must be able to show that the defendant’s actions in violation of the Act caused plaintiff’s injuries.
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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