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 and Deceptive Business Practices Act (CFDBPA), 815 Ill. Comp. Stat. 505/1 through 505/12, is Illinois’ state statute governing unfair and deceptive acts and practices used against consumers. This law covers a broad range of businesses such as debt collection, certain forms of advertising, or even car repair shops. Even if the defendant possessed good faith in their actions, a plaintiff can claim that they violated this Act by means of a trade of business’s misrepresentation or false promise. Similarly, it does not have to be proven that the defendant intended to deceive the plaintiff.
To bring a valid case under the CFDBPA in Illinois, the plaintiff should be able to prove four elements, which include: a deceptive act or practice by the defendant, the defendant intended the plaintiff to rely on the deception, the deception occurred in the course of conduct involving trade or commerce, and actual damages to the plaintiff proximately caused by the deception. Plaintiffs with a successful case can recover compensatory damages and punitive damages, depending on the nature of the CFDBPA violation. The plaintiff also may be awarded attorney’s fees in certain cases.
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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