UDAAP – Unfair, Deceptive or Abusive Acts and Practices
What You’ll Find in This Article:
- An Overwhelming Case
- Debt Collection Shows Itself For What It Is
- The Two Suggestions
- An Ally You May Not Know Exists
- Final Thoughts
Saying unfair, deceptive or abusive acts and practices is quite a mouthful. That’s why you hear the acronym, UDAAP (or UDAP) instead. I believe we both can agree that’s a lot more pleasant to the hearing.
UDAAP came into existence as a result of the Dodd-Frank Act in 2010. That is to say the financial crisis of 2007 – 2008 was the impetus for the legislation. It was enacted in part to promote US financial stability. And to protect American Consumers from abusive financial services practices.
It is no secret many Seniors and Pre-Senes have trouble paying or cannot pay their medical bills. Studies have shown these groups try to pay what they owe but the sheer volume owed is too overwhelming.
Unfair, Deceptive or Abusive Acts and Practices
An Overwhelming Case of UDAAP
One example oft cited is the case of the lady making about $36,000 a year with an outstanding medical bill of approximately $62,000 and growing. Growing because collections adds interest to the unpaid balance. Realistically she will never get out from under that bill.
So, you might be asking, what does unfair, deceptive or abusive acts and practices have to do with her and others in the same boat. Plenty.
Numerous studies have shown that especially uninsured and under-insured consumers are raw meat for hospitals and some doctors. I won’t go into details in this article.
Debt Collection Shows Itself For What It Is
It is the collections part of the medical landscape that brings the UDAAP statutes into the forefront. As you will read in a moment, UDAAP laws prohibit “unfair or deceptive acts or practices in or affecting commerce.” Contrary to what the medical field says and/or attempts to portray in those television doctor shows they are a business. And, in this country, business is commerce.
When you don’t pay your medical bills within a specified time frame the entity owed the money initiates collection. This could be anything from calling you or sending you a past due notice. They might even try asking you for payment when you come back to the facility.
If you do not pay within the specified time frame almost all medical providers resort to a collection agency. This is where the majority of unfair practices enter the picture. Mind you, many hospitals have been caught with their pants down using extremely unfair collection methods too. So, a history exists from inside the medical purveying system as well.
This article won’t go into depth on UDAP on purpose as the virtual real estate it would take up is enormous. However, this article will make two suggestions as to where to begin your journey into UDAP education.
Two Friendly Suggestions I Make
The first is the American Bankers Association. Here’s a quote from their UDAAP page:
Section 5 of the Federal Trade Commission Act (FTC Act), 15 USC 45(a)(1) (UDAP), prohibits “unfair or deceptive acts or practices in or affecting commerce.” The Dodd-Frank Act makes it unlawful to engage in any unfair, deceptive or abusive act or practice (UDAAP with two As). The responsibility for enforcing the prohibition against “abusive” acts or practices was given to the Consumer Financial Protection Bureau (CFPB) under Dodd-Frank, but the prudential regulators retain their authority to enforce UDAP under Section 5 of the FTC Act.
That page currently resides at:
The second suggestion is to become familiar with your state UDAAP statute(s). And why use the state first and not the agencies mentioned by the ABA?
Because your state statutes almost always give you the most powerful remedies. Subsequently, these statutes are sometimes referred to as consumer protection acts of broad applicability.
They earned that description because they can be used to challenge a wide range of abusive behavior. As well as unfair or deceptive debt collection tactics. Many UDAAP statutes allow private actions for violations of other state or federal laws. Believe me, this is a big plus.
Moreover, if you are facing a medical bill calamity, hit the keyboard. And get as much heads up info on your state laws as you can. No telling what will happen in your favor when you are armed and ready to do battle.
An Ally You May Not Know Exists
The Dodd-Frank Act created the Consumer Financial Protection Bureau also known as CFPB. And they are responsible for consumer protection in the financial sector. Collection agencies come under the enforcement authority of the CFPB.
Collection agencies attempt to collect medical debts. Medical debts no longer crush your credit score thank goodness. But, and this is a big but, medical debt collectors still can crush your pocket book.
So that’s why you need to make the CFPB your friend. And, I don’t know your individual situation. But, you do. Maybe you can’t pay on time all the time. Maybe your job is only part time. The maybes can mount up. Above all else you need help and the CFPB can help.
Some Final Thoughts on UDAAP
Numerous studies have shown that especially uninsured and under-insured consumers are raw meat for hospitals and some doctors. Consequently, you can read about hospital bills and their collection protocol in our article titled: Hospital Billing and Senior Citizens.
Above all else visit the CFPB site and get familiar with their mission, pages and forms. And, make sure you research your state’s laws. Moreover, unfair, deceptive, or abusive acts and practices won’t go away by just wishing them away. You have to take the proper legal action so educate yourself.
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