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Unfair and Deceptive Acts and Practices: 8.3.7.1 Misrepresentations Concerning the Home or Work to Be Performed

It is deceptive to misrepresent that homes are built in accordance with good construction practices, that they meet HUD minimum standards, that they are free of structural defects, that there are no drainage or water problems, that parks and public transportation will soon be built nearby, or that the homes are ready for immediate occupancy.256 Charging extra money for rooms included in the advertised description and selling “bedrooms” that do not have sufficient insulation and waterproofing to serve as bedrooms are also deceptive practices.

Unfair and Deceptive Acts and Practices: 8.3.7.2 Performance Problems, Contracts, Warranties

A home builder commits an unfair and deceptive practice by taking a deposit, never starting the work, and refusing to return the deposit.272 Allowing cost overruns to build up without informing the home buyer is a UDAP violation.273 Billing for work not included in the bid, and failing to perform services for which the consumer has paid, are UDAP violations.274 But a lender was not liable for disbursing funds after its inspection showed that the wo

Unfair and Deceptive Acts and Practices: 8.3.8 Land Fraud Schemes

The FTC has been active against land fraud schemes for not disclosing the risks involved in land investments, such as that property is in a flood area or that water and sewage are unavailable.292 It is unfair and deceptive for sellers to misrepresent the availability of utilities,293 the location of lots,294 the quality of land,295 the condition of planned development,

Unfair and Deceptive Acts and Practices: 8.3.9 Timeshares

New Mexico has UDAP regulations dealing with contest promotions for the sale of subdivided land, timeshares, condominiums, and membership campgrounds.316 A Missouri regulation deals with promotions of timeshare plans.317 Vermont UDAP regulations relate to offers of supposedly free travel packages used in timeshare marketing.318 Other states have separate statutes regulating this area.319

Unfair and Deceptive Acts and Practices: 8.4.1 General

The sale of home improvements, such as residential siding, roofing, windows, and basement waterproofing, may display a wide array of UDAP violations. Some consider home improvement scams the classic form of consumer abuse.

Unfair and Deceptive Acts and Practices: 8.4.4 Building Permits and Construction Standards

Failure to procure a required building permit is a UDAP violation.372 A Massachusetts court held that a homeowner’s alleged oral instructions to a contractor to install a new roof on top of an old roof in violation of the building code would not be a defense to a UDAP claim based on that violation, where the written contract required the old roof to be stripped off and failure to do so created safety issues.373 It was a jury question whether the cost of redoing defective home improvement work th

Unfair and Deceptive Acts and Practices: 8.4.5 Pricing Issues: Unconscionability, Unauthorized Charges, Misrepresentations

Unconscionable prices may be a UDAP violation where little or no services are actually provided and the consumer is given no real alternative, or where the dealer has advertised that it charges low prices.375

The seller may not change the price or the nature of the work to be done without the buyer’s authorization.376 Nor may contractors represent that a house can be repaired within the limits of an insurance policy when it cannot.377

Unfair and Deceptive Acts and Practices: 8.4.7 Credit-Related Practices and Lender Liability

The Truth in Lending Act makes most home improvement loan and installment contracts cancelable by the consumer for three business days and rescindable for up to three years if material disclosures are not provided or work is commenced during the three-day cancellation period.389 For certain high-rate home improvement transactions that involve a security interest in the consumer’s home, the Home Ownership and Equity Protection Act (HOEPA) prohibits certain abusive credit terms and practices.390 I

Unfair and Deceptive Acts and Practices: 8.5.1.1 Problems Facing Users of Unregulated Fuels

While states typically regulate the provision of natural gas and electric heat,399 there is little or no regulation of the sale of such heating fuels as oil, propane, kerosene, and wood. This particularly puts at risk manufactured home residents, those living in rural areas, and tenants in older northeastern housing. Practitioners may find state UDAP statutes their only remedy to deal with abuses in the sale of these unregulated fuels.

Unfair and Deceptive Acts and Practices: 8.5.1.5 Price Gouging

The Connecticut, Massachusetts, and Iowa Attorneys General have adopted UDAP regulations432 that prohibit “unconscionably excessive” prices for petroleum products (including home heating oil and propane) or utilities during market disruptions or disasters. “Unconscionably excessive” is defined as prices substantially higher than petroleum prices immediately prior to the onset of the market disruption, unless the increase is justified by higher costs.

Unfair and Deceptive Acts and Practices: 8.5.2.2.1 Introduction

About one-third of U.S. states454 have laws that deregulate parts of the state’s utility market. About sixteen states have deregulated electricity markets, and several more have deregulated sales of natural gas. States with deregulated electricity or natural gas markets allow companies furnishing gas or electricity to market their services to consumers as an alternative to their incumbent provider.

Unfair and Deceptive Acts and Practices: 8.5.2.2.2 Deceptive marketing practices

Across the country, consumers in deregulated states file thousands of complaints each year against alternative supply companies.456 Many complaints demonstrate a similar pattern—a salesperson may tell the consumer that they could be eligible for a lower rate or discount on the utility bill, asks to see the customer’s utility bill, and then either uses that information to sign up the consumer involuntarily (an unlawful practice sometimes referred to as “slamming” as described in

Unfair and Deceptive Acts and Practices: 8.5.2.2.3 Unauthorized switching or slamming

Consumers frequently report that they have been involuntarily switched from utility service to alternative supply.458 This unlawful practice is sometimes referred to as “slamming” and was previously common among long-distance telephone service providers. Although state laws prohibit slamming, consumers continue to report incidents of unlawful switching.

Unfair and Deceptive Acts and Practices: 8.5.2.2.4 High prices

Alternative energy suppliers usually claim that switching to their services will result in huge savings for the customer (although there are exceptions, as a small number of companies offer services that tout a higher mix of renewable energy rather than cost savings).

Unfair and Deceptive Acts and Practices: 8.5.2.3 Illegal Shut-Offs and Interrupted Service

Re-connecting utility service does not fully remedy an illegal shutoff or prolonged interruption of service. While the service is shut off, the consumer invariably suffers various injuries—food spoilage, frozen pipes, lost use of the housing unit, the cost of alternative housing, and pain and suffering. Since state utility commissions usually do not redress these injuries, UDAP claims and private tort actions may be the best approach.487

Unfair and Deceptive Acts and Practices: 8.5.3.1 UDAP Applicability

One of the fastest changing sectors of the consumer marketplace involves telecommunications. New products and services typically are associated with new unfair and deceptive practices and this area has seen much litigation. But there are also a number of impediments to applying UDAP statutes to these practices.