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.
Iowa’s UDAP statute is listed in Iowa Code Sections 714.16 through 714.16A. Iowa is unique in that it is the only state that does not give consumers the right to go to court under their UDAP statute; only the Attorney General has the power to enforce their statute. The statute is strong in the sense that it broadly prohibits unfair and deceptive acts in financial transactions.
However, it is still one of the weakest statutes in the country due to the fact that it does not provide consumers with any clear remedies, such as compensatory damages or class actions. Civil penalties can be imposed by the court or determined by the Attorney General based on several factors, such as whether the defendant’s conduct was in willful disregard of the rights of an older person.
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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