Unfair And Deceptive Acts And Practices (UDAP)

The Consumer Legal Remedies Act, California Code of Civil Procedure §§ 1750 - 1784. The federal statute at 15 U.S.C. Sec 45(a)(1) prohibits unfair or deceptive acts or practices in or affecting commerce. The FTC, responsible for enforcing the statute, has issued many trade regulation rules that define unfair or deceptive acts for specific kinds of transactions such as the credit practices rule, used car rule and the cooling-off period for door-to-door sales.

The statute and regulations contain no specified penalties and no implied right of action exists. They are important sources of guidance however, for interpreting state statutes on unfair and deceptive acts and practices.

All states now have passed laws that make it easier for consumers to obtain redress against unfair actions taken by merchants or lenders. Laws differ from state to state, but contain similar elements. Most intend to provide broad, flexible, remedial action to prevent market place abuse of consumers.

Prohibited Practices
The typical UDAP statute contains broad and general prohibitions against unfair practices against consumers. Many statutes forbid unfair and deceptive acts and practices, others use the terms "false and fraudulent" or "misleading". Many of these statutes prohibit specific listed practices that are not exclusive. Given such a broad range of behavior, creative advocates can make a case that any form of unfair activity violates the state UDAP statute.

A major strength of UDAP statutes is that behavior can be unfair and deceptive and thus actionable even though it does not constitute fraud, breach of contract or negligence under more traditional law. UDAP statutes not only provide an additional remedy, but also enlarge the rights of wronged consumers.

Many statutes provide that the state attorney general or other state agency promulgate regulations pursuant to the UDAP statute. Many statutes provide that FTC rulings will be taken as guidelines or standards as to what practices are illegal.

These kinds of practices have been found to be unfair or deceptive by either the FTC or various states:

• Misrepresenting a product's effectiveness, nature, or quality

• False durability claims such as "lifetime durability"

• Persuading a consumer to sign a document by misrepresenting it to be something else

• False advertising about a sale, such as stating that a sale is a "going out of business" sale, when it's not

• Calling something custom made when it's mass-produced

• Misrepresenting that the seller is affiliated with other firms, or that its staff are other than salespeople when that is not the case

• Bait-and-switch advertising

• Phony "door opening" techniques used by door to door salespeople

• Selling used goods as new goods

• Representing that repairs are needed when they aren't or that many more repairs are needed than are warranted

• Offering to make repairs at a low price and then having the final bill be far higher.

• Delays in delivering goods ordered by mail.

• Improper repossession practices

Private Remedies
UDAP statutes allow consumers to bring actions directly for violation of the statutes. Formerly, only a federal agency or, in some cases, a state agency could bring action for unfair trade practices. Now almost all UDAP statutes provide that consumers can sue for damages and if victorious can collect attorney's fees from the losing party. In a fair number of states the court is empowered to award double or triple damages and sometimes punitive damages. Under many of statutes, courts can issue an injunction against the defendants from engaging in similar practices in the future.

Administrative Remedies
Under almost every statute, some state agency, usually the attorney general, is authorized to pursue the matter even if the consumer does not pursue it. Normally the state agency can obtain an injunction against further such practices by the guilty party. The state agency can almost always ask that the court order restitution in the event of victory.