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Unfair and Deceptive Acts and Practices: 11.4.2.8.5 Where product has defects but has not yet failed

Payment for repairs to prevent a defect from causing a malfunction satisfies an injury requirement.388 In addition, some courts recognize ascertainable loss where a product has defective parts that reduce its value, even if those parts have not yet failed.389 The plaintiff should be prepared to present expert or lay testimony that the defect caused an actual reduction in the product’s resale value.390 If a product such as a medication has undisclos

Unfair and Deceptive Acts and Practices: 11.4.2.8.6 Overcharges, undisclosed costs, other payments induced by unfair or deceptive practices

Payment of an illegally high price is an injury that satisfies the UDAP statute.392 For example, paying a usurious rate of interest in violation of state law satisfies a UDAP statute’s injury requirement.393 The New Jersey Supreme Court rejected an argument that an overcharge is not an ascertainable loss unless the consumer has requested a refund.394 Excess interest that home buyers paid because the defendants procured an inflated appraisal that le

Unfair and Deceptive Acts and Practices: 11.4.2.8.7 Bait-and-switch cases

A consumer suffers injury when they are unable, because of the merchant’s UDAP violations, to enter into a transaction at the advertised price.409 Under New York’s UDAP statute, “injured” means misled in any material way, such as thinking a sale price is lower than it is, even though no sale takes place.410 In a bait-and-switch sale, the difference between the “bait” and the less advantageous transaction the consumer was actually given is a loss sufficient to support a UDAP claim.

Unfair and Deceptive Acts and Practices: 11.4.2.8.9 Threat of foreclosure or loss of home equity

Foreclosure on the consumer’s home satisfies a UDAP statute’s injury requirement.428 A homeowner meets the damage requirement of California’s Unfair Competition Law when a mortgage lender structures a workout agreement so that the amount due is less than the amount needed to cure, and then forecloses.429 Simply initiating a foreclosure may be sufficient, even in states that require a loss of money or property, as it puts the homeowner’s interest in the property in jeopardy.

Unfair and Deceptive Acts and Practices: 11.4.2.8.11 Other losses

A consumer is “adversely affected” where the creditor fails to register the consumer’s automobile title, resulting in the consumer not getting notice of a mechanic’s lien.449 A defendant’s misappropriation of confidential business information may satisfy a damage precondition.450 Money spent on an attempt, frustrated by defendants’ acts, to acquire a business license is an ascertainable loss even if the license itself would not constitute a property interest.

Unfair and Deceptive Acts and Practices: 11.4.3.3 Georgia Intermediate Appellate Courts Require Impact on Consumer Marketplace or Potential Harm to Consumer Public

Intermediate appellate courts in Georgia have expanded upon the notion that an isolated sale of real estate by one individual to another is not covered by the UDAP statute,542 and have stated a more general requirement that a challenged practice must have potential harm for the consumer public, or must have an impact on the consumer marketplace.543 So far, the state supreme court has not directly addressed the issue.

Unfair and Deceptive Acts and Practices: 11.4.3.5 Nebraska Applies UDAP Statute Only to Transactions That Affect the Public Interest

The Nebraska Supreme Court has ruled that the state UDAP statute does not apply to transactions that do not affect the public interest.575 The court based its decision on the UDAP statute’s definition of “trade or commerce” as a “sale of assets or services and any commerce directly or indirectly affecting the people of the State of Nebraska.” The decision arose in an unusual context, however: a private sale of a vehicle where the seller was a business (a paving company) but not a vehicle dealer.

Unfair and Deceptive Acts and Practices: 11.4.3.6.1 Description of the requirement

The New York Court of Appeals has ruled that UDAP plaintiffs need not show repetition or a pattern of deceptive behavior, but they must show that the acts or practices are consumer-oriented—i.e., that they “have a broader impact on consumers at large.”581 To be “consumer-oriented,” the product need not be intended for personal, family, or household use—for example, marketing a law book to lawyers, judges, and tenant advocates who will use it professionally is consumer-oriented.

Unfair and Deceptive Acts and Practices: 11.4.3.6.2 Examples of consumer-oriented conduct

The following types of conduct have all been found, based on some of the factors described in the preceding section, to be consumer-oriented for purposes of New York’s UDAP statute: a bank’s protection of its larger but not its smaller depositors from the devaluation of a foreign currency;605 charging hidden foreign currency transaction fees to consumers who used their credit cards in foreign countries;606 misrepresenting the circumstances under which a bank would charg

Unfair and Deceptive Acts and Practices: 11.4.3.6.3 Examples of conduct found not to be consumer-oriented

On the other hand, under the specific circumstances alleged, courts have found the following types of conduct not to be consumer-oriented, but rather private disputes over behavior not likely to affect consumers at large: deception with respect to the purchase of securities or other investments;644 disputes in a variety of business transactions;645 an employer’s purchase of products for its employees to use;646 misrepresentations that are made to a

Unfair and Deceptive Acts and Practices: 11.4.3.6.4 Insurance transactions

A number of decisions have examined whether practices involving insurance transactions meet the consumer impact standard. Insurance sales practices, such as widespread use of unrealistic projections to market “vanishing premium” insurance policies676 and other deception in the sale of insurance,677 meet this standard.

Unfair and Deceptive Acts and Practices: 11.4.3.7 South Carolina Requires That Practice Have Impact on Public Interest

South Carolina courts have interpreted “trade or commerce affecting the people of the state” as requiring that a practice not just affect the parties to a transaction, but have an impact on the public interest, such as where there is a potential for repetition.680 Two of the ways (but not the exclusive ways681) of establishing a public impact are proof that the same kind of actions occurred in the past682 or that the company’s procedures create a p

Unfair and Deceptive Acts and Practices: 11.4.3.8.3 Examples of transactions that meet the public interest test

The following transactions have been found to meet the Hangman Ridge public interest standard: purchasing a horse at auction;717 a consumer’s purchase and financing of a manufactured home;718 a real estate agency’s policy regarding forfeiture of earnest money, which it applied in “dozens, perhaps hundreds” of cases;719 breaching agreements to rent houses and then refusing to return the security deposits;

Unfair and Deceptive Acts and Practices: 11.4.3.8.4 Examples of transactions that do not meet the public interest test

The following transactions have been found not to meet the Hangman Ridge public interest standard: a title insurance company’s dispute with a business;738 an employer-provided disability benefit plan’s claim-handling practices;739 a business dispute with a realtor;740 an isolated oral representation in a manufactured home sale;741 failure to make warranty repairs to the buyer’s satisfaction;

Unfair and Deceptive Acts and Practices: 11.4.4.3 Are Notice Letters Required for Counterclaims and Amended UDAP Claims?

Where a demand letter is required, an issue arises as to how consumers can bring UDAP counterclaims. When the consumer is sued and wishes to bring a UDAP counterclaim, the consumer clearly can send a demand letter, wait the notice period, and then file a UDAP counterclaim.785 But what happens when court rules require that the counterclaim be brought before the notice period expires?