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 Deceptive Consumer Sales Act (DCSA), Ind. Code Sections 24-5-0.5-1 through 24-5-0.5-12, is Indiana’s UDAP statute prohibiting unfair and unconscionable acts. But, it is weak in the sense that it does not broadly prohibit deceptive acts and practices and the plaintiff must show that those deceptive acts and practices were done knowingly by the defendant. The DCSA also requires a pre-suit notice and does not allow action to be taken on real estate transactions. Examples of DCSA violations include knowingly misrepresenting standard, quality, grade, style or model; advertising for sale something the supplier does not intend to sell; and violating the Fair Debt Collection Practices Act (FDCPA).
A DCSA lawsuit must be filed within the statute of limitations, which is two years after the occurrence of the deceptive act. A successful plaintiff can be awarded compensatory damages, punitive damages, and likely attorney’s fees. To establish liability in Indiana under the DCSA, the consumer must do the following:
- Comply with a notice requirement plus show the unlawful act is “uncured,” or prove that the act is “incurable,” or
- Prove the deceptive act was committed but also that it was done as part of a scheme, artifice, or device with the intent to defraud or mislead.
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 Mike Agruss Law 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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