Unfair, Deceptive, or Abusive Acts or Practices
Practice Overview
The Consumer Financial Protection Bureau, the Federal Trade Commission, state attorneys general, and prudential bank regulators continue to be aggressive in their approaches to monitoring unfair, deceptive, or abusive acts or practices under federal and state consumer protection laws.
Buckley has extensive experience defending against unfair, deceptive, and abusive claims on behalf of the financial services industry. Our experience includes defending against enforcement actions and lawsuits brought by the CFPB and prudential bank regulators, FTC investigations and lawsuits, state attorneys general matters, and class action litigation. We represent clients on a wide range of matters, including fair and responsible lending and servicing, sales and marketing practices, overdraft protection, deposit reconciliation, payment processing, credit reporting, debt collection, and privacy and data security issues.
Our lawyers advise clients on all consumer financial products and services, including mortgage origination and servicing, short-term consumer loans, automobile and other installment loans, credit, debit and stored value cards, student loan origination and servicing, and retail banking products. We are well-versed in a full array of ancillary products like payday lending and tax refund advances.
Buckley also assists clients on UDAAP matters outside the enforcement context by helping financial services companies develop compliance programs and policies, conduct risk assessments, evaluate marketing, develop new products, review disclosures, perform mock CFPB examinations, prepare legal analyses of potential violations, and provide training to boards of directors, senior management, and other key personnel.
Representative work in this area includes:
- Represented Flagstar Bank in the first CFPB enforcement action of its mortgage servicing rules that was based, in part, on allegations of unfair acts and practices and resulted in an administrative consent order settlement for $37.5 million relating to default servicing loss-mitigation practices
- Represented Verizon Wireless in a multistate, multiagency investigation and settlement alleging that it permitted “cramming” by allowing third parties to place unauthorized charges on consumers’ wireless phone bills
- Represented a credit card issuer in the second CFPB enforcement action, issued jointly with the Federal Deposit Insurance Corporation, in which the agencies alleged deceptive marketing and sales practices related to add-on products
- Performed regulatory and transactional due diligences of lenders to advise potential investors and purchasers on the lenders’ compliance with federal and state UDAAP prohibitions
- Represented First National Bank of Omaha in a CFPB enforcement action alleging UDAAP violations relating to credit card add-on products
- Represented Customers Bank in an enforcement action before the Federal Reserve Board (FRB) concerning UDAAP allegations related to financial aid disbursement services for students offered in conjunction with a third party
- Represented bank clients in responding to FDIC inquiries related to UDAAP risk posed by marketplace lender/bank partnership arrangements
- Represented a credit reporting bureau in a CFPB enforcement action alleging UDAAP violations relating to the marketing of credit scores to consumers
- Represented a regional bank in the first CFPB enforcement action that cited both UDAAP and Regulation DD violations in connection with the bank’s marketing of a free checking product
- Defended financial institutions in class actions alleging violations of state unfair and deceptive practices laws
Articles
"TCPA relief for Covid-19 communications could extend to financial institutions" by Ali M. Abugheida and Geoffrey L. Warner (Bloomberg Law)
Financial institutions face unprecedented and rapidly evolving challenges in the wake of the Covid-19 pandemic, including the need to communicate quickly and efficiently with customers in the face of government-issued stay-at-home orders. But the Telephone Consumer Protection Act, with its steep...
Articles"Alternative data and fair lending face off: The relationship is complicated" by Jonice Gray Tucker and Caroline M. Stapleton (Mortgage Compliance Magazine)
Thinking of getting into a relationship with alternative data? You're not alone. Use of "alternate data," a term broadly used to describe consumer information gathered from non-conventional sources, is becoming increasingly attractive to mortgage lenders, their service providers, and even consumers...
Articles"Finding the purpose in bureau civil investigative demands" by Aaron C. Mahler (Bloomberg BNA)
“Why me?” It’s a common refrain whenever something bad happens. It’s also one of the first questions companies ask when finding themselves on the receiving end of a civil investigative demand from the Consumer Financial Protection Bureau. The logical place to look should be the notification of...
Articles"Neither forgiven nor forgotten: Taxation and UDAAP concerns with collecting charged off debt" by Sasha Leonhardt and Jessica M. Shannon (Bloomberg BNA)
When debtors are unable to pay their debts, creditors are left with a choice: (i) allow the consumer to pay a lesser amount, if possible, to settle the obligation and recover some funds; or (ii) charge off the debt and cease all collection efforts. Regardless of the path chosen, each has potential...
Articles"The role of State AGs in solving student loan crisis" by Sasha Leonhardt and Dana Walsh Kumar (Law360)
State attorneys general are the chief legal officers of their state; state attorneys general are the chief law enforcement officers of their state; and state attorneys general must protect their citizens and vigorously enforce their state’s consumer protection statutes. As broad as these powers and...
ArticlesMarshall T. Bell and Megan E. Whitehill Authored a Law360 Article, "Ability-To-Repay Enforcement Comes To Auto Finance"
In recent years, regulators and enforcement agencies have eagerly exercised their authority to prosecute what they perceive as unfair or deceptive acts and practices (UDAPs). Unfortunately for the auto finance industry, these regulators and agencies show no sign of tapping the brakes on such...
ArticlesWhat's Driving Regulation of Auto Ancillary Products
Federal and state regulatory scrutiny of the automobile finance industry has accelerated over the last several months. The Consumer Financial Protection Bureau (CFPB or the Bureau) and the Department of Justice (DOJ) recently announced the fourth public resolution with an indirect auto finance...
ArticlesAll Student Loan Players Great and Small
From presidential town halls to the local college dining hall, issues related to student lending have become the talk of the nation. According to recent estimates, over 41 million Americans owe more than $1.2 trillion in student loan debt, second only to mortgage loan debt. A quarter of these...
ArticlesLost in Translation: Financial Services for Consumers with Limited English Proficiency
Susanna Khalil and Jessica Pollet authored "Lost in Translation: Financial Services for Consumers with Limited English Proficiency," which was published May 18, 2015 in the WestLaw Journal Bank & Lender Liability. They discuss the emerging area of access to credit for people with limited...
ArticlesNew Day For RESPA: The UDAAPification Of Section 8
The Real Estate Settlement Procedures Act has gone the "UDAAPified" way of debt collection — this time, through enforcement rather than guidance. In July 2013, Consumer Financial Protection Bureau Bulletin 2013-07 announced that the principles underlying the Fair Debt Collection Practices Act...
ArticlesCaveat Emptor or Caveat Vendor? The Evolution of Unfairness in Federal Consumer Protection Law
Under the Federal Trade Commission’s original interpretation of unfair or deceptive acts or practices law, financial institutions could feel some sense of security that, if they provided a consumer with a clear understanding of a proposed transaction, the burden was on the consumer to determine...
ArticlesSpecial Alert: CFPB Takes Enforcement Action Against "Buy-Here, Pay-Here" Auto Dealer for Alleged Unfair Collection and Credit Reporting Tactics
On November 19, the CFPB announced an enforcement action against a ‘buy-here, pay-here’ auto dealer alleging unfair debt collection practices and the furnishing of inaccurate information about customers to credit reporting agencies. ‘Buy-here, pay-here’ auto dealers typically do not assign their...
ArticlesThe CFPB's 'UDAAPification' of Consumer Protection Law
Questions about the scope of the Consumer Financial Protection Bureau's jurisdiction abound for financial institutions and other entities that work with them. What are the boundaries of the CFPB’s authority? How might these parameters expand in the future? Are there other ways the CFPB may take...
ArticlesSpecial Alert: CFPB Bulletin Re-Emphasizes Focus on Mortgage Servicing Transfers
On August 19, 2014, the CFPB issued Bulletin 2014-01 to address “potential risks to consumers that may arise in connection with transfers of residential mortgage servicing rights.” The bulletin, which is the latest in a series of CFPB regulations, statements, and guidance on this subject, replaces...
ArticlesPom v. Coke Will Impact Financial Services Too
Legal and compliance departments, take note: the U.S. Supreme Court’s recent decision in Pom Wonderful LLC v.Coca-Cola Co. confirms that even if an institution’s conduct meets the specific requirements established by the federal agency responsible for implementing one federal consumer protection...
ArticlesA Broader Application of Fair Debt Collection Principles
On July 10, the Consumer Financial Protection Bureau issued new debt collection guidance and announced broad application of the Fair Debt Collection Practices Act under Sections 1031 and 1036 of the Dodd-Frank Act. The guidance suggests that the CFPB views the acts and practices made illegal by the...
Articles
News & Blogs
CFPB bans payment processor for alleged fraud
On January 18, the CFPB filed a proposed stipulated judgment and order to resolve a complaint filed last year against an Illinois-based third-party payment processor and its founder and former CEO (collectively, “defendants”) for allegedly engaging in unfair practices in violation of the CFPA and...
InfoBytesCFPB sues debt collectors
On January 10, the CFPB filed a complaint against three debt collection companies and their owners (collectively, “defendants”) for allegedly engaging in illegal debt-collection practices. According to the Bureau, the defendants purchase debt portfolios and place them with other collection...
InfoBytesCFPB reaches settlement with online lender
On December 30, the U.S. District Court for the Northern District of California approved the stipulated final judgment and order against a California-based online lender (defendant) for alleged violations of fair lending regulations and a 2016 consent order. As previously covered by InfoBytes , the...
InfoBytesCFPB enters proposed final judgment in 2016 structured settlement action
On December 17, the CFPB filed a proposed stipulated final judgment and order in an action accusing defendants of allegedly employing abusive practices when purchasing structured settlements from consumers in exchange for lump-sum payments. As previously covered by InfoBytes , the CFPB filed a...
InfoBytesCFPB’s debt-collection suit can proceed
On December 13, the U.S. District Court for the District of Delaware ruled that the CFPB can proceed with its 2017 enforcement action against a collection of Delaware statutory trusts and their debt collector for, among other things, allegedly filing lawsuits against consumers for private student...
InfoBytesChopra wants states to enforce federal consumer protection laws
On December 7, in a speech before the National Association of Attorneys General (NAAG) meeting, CFPB Director Rohit Chopra discussed the importance state partnerships play in enforcing consumer financial protection laws. In addressing the dangers of federal preemption over state consumer protection...
InfoBytesDistrict Court enters final judgment in 2016 CFPB structured settlement action
On November 18, the U.S. District Court for the District of Maryland entered a stipulated final judgment and order against one of the individual defendants in an action concerning allegedly unfair, abusive, and deceptive structured settlement practices. As previously covered by InfoBytes , the...
InfoBytesCFPB resolves UDAAP allegations with debt collection company
On November 1, the U.S. District Court for the Western District of Missouri ordered a Missouri-based company to pay a $30,000 civil money penalty to resolve allegations that it used district-attorney letterhead to threaten consumers with criminal prosecution. As previously covered by InfoBytes ,...
InfoBytesCFPB reaches $6 million settlement with prison financial services company
On October 19, the CFPB issued its first enforcement action under newly-appointed Director Rohit Chopra. The consent order , issued against a provider of financial services to prisons and jails, stated that the company engaged in unfair, deceptive, and abusive acts or practices in violation of the...
InfoBytesCFPB denies debt collection company’s petition to set aside CID
On August 18, the CFPB denied a petition by a debt collection company to set aside a civil investigative demand (CID) issued by the Bureau in May. The CID requested information regarding whether debt buyers, debt collectors or persons associated with selling or collecting debt, have “made false or...
InfoBytes
Press Releases & Announcements
BuckleySandler Hosts Eighth Annual Fair Lending Today Conference
BuckleySandler LLP hosted its eighth annual Fair Lending Today conference in Washington, DC on March 13-14, 2016. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The sessions were led by BuckleySandler attorneys...
Press ReleasesBuckley Sandler Hosts Annual Fair Lending Today Conference
Buckley Sandler LLP hosted its annual Fair Lending Today conference in Washington, DC, March 15-16, 2015. The two-day event featured an evening of interactive roundtable discussions on fair lending issues, followed by a full day of seminars. The roundtables and seminars were led by Buckley Sandler...
Press Releases
Our Unfair, Deceptive, or Abusive Acts or Practices Team
Partners
FYI
"TCPA relief for Covid-19 communications could extend to financial institutions" by Ali M. Abugheida and Geoffrey L. Warner (Bloomberg Law)
Recent Blog Posts
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January 20, 2022
CFPB bans payment processor for alleged fraud
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January 12, 2022
CFPB sues debt collectors
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December 23, 2021
CFPB reaches settlement with online lender
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December 22, 2021
CFPB enters proposed final judgment in 2016 structured settlement action
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December 17, 2021
CFPB’s debt-collection suit can proceed