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 False Statement in Advertising Act (MFSAA) (Minn. Stat. Section 325F.67), the Prevention of Consumer Fraud Act (MCFA) (Minn. Stat. Sections 325F.68 through 325F.70), and Minn. Stat. Section 8.31 are Minnesota’s UDAP statutes. One large weakness of Minnesota’s laws, though, is that the consumer’s claim must be for “public benefit” in order to be considered valid and acceptable by the attorney general. This condition has stopped numerous consumers from bringing suit.
Minn. Stat. Section 8.31 allows plaintiffs to recover damages, such as attorneys fees and compensatory damages, in many cases of fraud, negligent misrepresentation, and many other types of deceptive practices.
Generally, the MFSAA protects consumers from “untrue, deceptive, or misleading” assertions, representations, or statements of fact in an advertisement. In order to prove an MFSAA claim, the plaintiff must be able to prove intent, publication of a statement, a false or misleading advertisement, causation, and damages. In contrast, the MCFA makes it unlawful for any person to act, use, or employ “any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice” in the sale of merchandise.
The statute of limitations for a civil claim in Minnesota is six years. Successful plaintiffs could be awarded compensatory damages and attorneys fees after a case.
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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