Unfair and Deceptive Acts and Practices (UDAP and UDAAP)

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.

The FTC brings this action in a Georgia federal court under FTC Act § 13(b to obtain temporary, preliminary, and permanent injunctive relief, rescission or reformation of contracts, restitution, the refund of monies paid, disgorgement of ill-gotten monies, and other equitable relief for Prog Leasing’s unfair or deceptive practices in connection with the marketing, offering for sale, and sale of rent-to-own payment plans.

This is the notice of proposed rulemaking for the origianal version of the FTC Telemarketing Sales Rule, 60 Fed. Reg. 8313 (Feb. 14, 1995). The FTC proposes to implement the Telemarketing and Consumer Fraud and Abuse Prevention Act. Section 3 of the Act directs the FTC to prescribe rules, within 365 days of enactment of the Act, prohibiting deceptive telemarketing acts or practices and other abusive telemarketing acts or practices. This proposed rule led to a final rule that was later extensively expanded and amended.