BOSTON, Mass. – Serious gaps and weaknesses have compromised consumer protection laws in most of the 50 states, and recent court rulings have opened the door to predators and abuses in billions of everyday transactions.
So says a new report by the non-profit National Consumer Law Center: “Consumer Protection in the States: A 50-State Report on Unfair and Deceptive Acts and Practices Statutes.”
The report analyzes and summarizes the unfair and deceptive acts and practices (UDAP) laws that protect consumers in each state and the District of Columbia, and spotlights limitations in the substance and scope of the laws and in their enforcement.
“State unfair and deceptive acts and practices laws provide the main defense against abuses in most consumer transactions,” said Carolyn Carter, an NCLC senior attorney and the author of the report. “Yet in some states these laws provide almost no protection to consumers.”
In Michigan and Rhode Island, court decisions have gutted UDAP laws. Iowa does not even allow consumers who have been cheated to go to court to enforce protections. Louisiana, New Hampshire and Virginia exempt most lenders and creditors from their UDAP statues.
“Unfair and deceptive acts and practices laws that were too weak failed to rein in abuses by mortgage lenders and brokers and fueled the current nationwide wave of foreclosures,” said NCLC executive director Will Ogburn.
Five states – Arizona, Delaware, Mississippi, North Dakota and Wyoming – force consumers to absorb lawsuit costs. And three states – Alaska, Florida and Oregon – sometimes require consumers to pay the legal costs of defendants, even for suits filed in good faith.
The report identifies a number of measures that states can take to strengthen consumer protections, including:
- Enact broader prohibitions on deceptive and unfair acts.
- Fill gaps in the scope of UDAP statutes.
- Increase penalties for violations.
- Eliminate financial barriers and risks that prevent victims from filing UDAP lawsuits.
- Lower technical obstacles that impede consumer redress.
A 50-State Report on Unfair and Deceptive Acts and Practices Statutes
Abusive Acts and Practices: Comments to CFPB
Letter to CFPB Regarding Repeat Offenders; Registry of Nonbank Financial Companies Subject to Certain Agency and Court Orders