Avoiding UDAAP Violations, Errors, and Claims | Butler Snow LLP

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In our last blog, we introduced you to the federal law known as the Dodd-Frank Act / UDAAP, which was enacted and is enforced to protect consumers of financial products or services from any claims, statements or practices deemed unfair. . , misleading or abusive… or who are misleading in any way.

We have an idea of ​​what these practices are, whether they are false or misleading statements or, just as important, omissions of important information that customers should know before buying what you are selling.

However, how do businesses know what consumers find confusing or disturbing? It goes without saying that accuracy, transparency and clear, unambiguous and direct statements about the products and services provided by a company are essential. But is it enough?

In order to consistently protect your business, it is essential to pay attention to what consumers say about businesses, advertisements, services and, quite frankly, how they treat consumers and the fairness with which they treat consumers. consumers.

Do it by listening, by listening to the consumers, who are your customers.

Consumer complaints can and do play an important role in helping businesses determine whether advertising statements, service descriptions, or market conduct are perceived to be unfair, misleading, or abusive in any way. In fact, these complaints can be an indispensable source of information. The same kinds of consumer complaints that can lead to authorities investigating, enforcing and sanctioning can, if you pay attention, help businesses avoid those costly and debilitating investigations and sanctions, and ultimately profit. to market companies.

Consumers can reveal gaps in representations made by companies and can reveal flaws in the company’s compliance management system, which in turn can help improve marketing / advertising; how a company monitors its marketing; and perhaps above all, with what vigor and with what rigor to train the employees of the company.

Being smart, vigilant and ethical in the markets you serve is essential and can avoid committing UDAAP violations, thus avoiding not only reputational damage but also the risk, exposure and potentially debilitating expense of navigation and defense investigations and enforcement actions, extreme cases, civil and even criminal enforcement.

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