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1.6.2 Look at All Aspects of a Transaction

Whatever type of problem the consumer client first discusses, the attorney should explore potential UDAP violations in all aspects of the transaction—advertising, sales presentations, the consummation of the sale, the credit terms, the seller’s performance, and subsequent debt collection practices. For example, if a client complains of debt collection harassment, examine not only the collection practices, but also the underlying sales transaction and the credit terms. If the client’s concern involves sales misrepresentations, also investigate the credit terms and collection tactics. If a client is being sued for a deficiency after a car’s repossession, UDAP counterclaims may involve the original car sale, subsequent warranty performance on the car, the credit terms, debt collection practices, and repossession techniques.

In analyzing the underlying transaction, review credit documents in search of unfair or oppressive credit terms or creditor remedies. Ask the client about deception in advertising or sales representations. Was what was promised never delivered, was the price unconscionable, was the contract unfair on its face, or did the seller do anything else unfair or deceptive? The seller’s media advertising and sales brochures should be evaluated, even if a case primarily involves oral misrepresentations made by the seller to the client.

Ask about oral deception regardless of what the written documents provide. Claims inconsistent with written sales documents may not be actionable under a contract theory, but are under a UDAP theory.79 Ambiguous statements, half-truths, and literally true statements can deceive.80 Review the relevant sections of Chapters 6 through 9, infra, that detail common deceptive practices found in particular types of transactions.

Even when the consumer is being sued by an assignee of the original seller or a lender to whom the seller referred the consumer, the consumer can raise all defenses and UDAP counterclaims that the consumer could have raised against the seller.81 The consumer should also consider bringing the seller in as a third-party defendant.