The National Consumer Law Center, a consumer advocacy group, has updated its report on analyzing the Unfair and Deceptive Acts or Practices (UDAP) laws on a state-by-state basis, and, perhaps not surprisingly, concludes that states are not going far enough when it comes to protecting consumers.
The report includes a state-by-state breakdown of UDAP laws, along with a breakdown of which states have improved or weakened their consumer protections in the past decade, and a breakdown of whether the law applies to debt collection. A copy of the report can be accessed here.
For example, the report indicates that a number of states, such as Minnesota, South Dakota, Tennessee, West Virginia, as well as the District of Columbia, could strengthen their UDAP laws by specifically including provisions that indicate the laws apply to debt collection activities.
One of the strongest moves a state can make is to designate an agency with the power to make rules and regulations prohibiting certain practices, the NCLC says in its report. Just over half of the 50 states currently have granted an agency with the power to make its own rules, according to the report.
Debt collection generally falls into the category of post-sale acts as it pertains to state UDAP laws. According to the NCLC, statutes in 32 states explicitly cover post-sale acts, however there are some exceptions, depending on court rulings and the language in the statute.
From the NCLC:
New Jersey courts interpret its UDAP statute as applying to mortgage servicing but not to debt collection, and Ohio courts say the opposite.
Even if the UDAP statute reaches post-sale practices as a general rule, some of the entities involved in post-sale practices may be exempt for other reasons. For example, a few states create a blanket exemption for banks and other nancial institutions, and they are thus outside the UDAP statute even when servicing mortgages or collecting debts originated by a party covered by the UDAP statute.
