Unfair and Deceptive Acts and Practices (UDAP and UDAAP)

The Consumer Financial Protection Act of 2010 (CFPA) prohibits any ‘‘covered person’’ or ‘‘service provider’’ from ‘‘engag[ing] in any unfair, deceptive, or abusive act or practice’’ and defines abusive conduct.

Model Consumer Credit Act (1973) (325 pages) builds on NCLCs 1970 National Consumer Act (NCA).  It is also a response to the inadequacies of the Uniform Consumer Credit Code drafted by the National Commissioners on Uniform State Laws (now the Uniform Laws Commission). While covering many of the same topics as the NCA, it has more extensive treatment of assignee attempts to cut off liability, door-to-door sales, credit card errors, credit reporting, and injunctions and class actions.

National Consumer Act (1970) is a 156-page comprehensive model law covering many aspects of consumer protection.   The NCA’s consumer credit provisions limit interest rates, late and other charges, and provide prepayment rights. It more generally establishes requirements as to disclosures and writings in consumer transactions and limits credit terms and creditor rights, such as restrictions on balloon payments, assignment of earnings, confession of judgments, holder-in-due-course status, attorney fees, and security interests.

Model Individual Tax Preparer Regulation Act (Rev. 2013) establishes a state Board of Individual Tax Preparers, sets out the board’s powers, and requirements for tax preparers concerning registration, bonding, periodic registration renewal, and enforcement powers,. The model law sets out disclosure requirements to consumers, prohibited practices for tax preparers, and private remedies for consumers.

NCLC’s Model Manufactured Home Community Stability and Preservation Act (2023) sets forth model language to give residents of manufactured home communities an opportunity to purchase their communities. It requires the community owner to give the residents—and a state agency, the local housing authority, and the local licensing or health and safety enforcement agency—advance notice of any prospective sale of the community. The notice must include the price, terms, and conditions that the community owner has provisionally accepted or is prepared to accept.

The FTC  policy statement provides guidance regarding its enforcement of various statutes and FTC regulations addressing negative option marketing and operating. 

Description: This CFPB circular states that negative option marketing practices may be unfair, deceptive, or abusive where a seller (1) misrepresents or fails to clearly and conspicuously disclose the material terms of a negative option program; (2) fails to obtain consumers’ informed consent; or (3) misleads consumers who want to cancel, erects unreasonable barriers to cancellation, or fails to honor cancellation requests that comply with its promised cancellation procedures.

Since the enactment of the CFPA, government enforcers and supervisory agencies have taken dozens of actions to condemn prohibited abusive conduct. The CFPB is issuing this Policy Statement to summarize those actions and explain how the CFPB analyzes the elements of abusiveness through relevant examples, with the goal of providing an analytical framework to fellow government enforcers and to the market for how to identify violative acts or practices.

This is a state court action claiming violation of the state UDAP statute, brought by the Pennsylvania attorney general. The complaint alleges unlawful and deceptive practices in connection with the sale and financing of severely distressed and dilapidated homes to consumers, utilizing agreements that purport to grant defendants all the rights and benefits of being both a lender and a landlord, while leaving their economically distressed and vulnerable customers without the legal protections of being either borrowers or tenants.

This is a 2019 federal action claiming violation of the federal Consumer Protection Act and New York law, brought by the New York attorney general and the New York supervisor of financial services.