Strategies of Public UDAP Enforcement

Abstract

Laws protecting consumers from unfair and deceptive acts and practices – commonly called “UDAP” laws – have played a stunning role in recent years. As one example, state and federal enforcers plied these laws more than any other to hold individuals and companies accountable for the Great Recession, while chalking-up record payouts. And with the shift in national power, the spotlight shows no signs of dimming.

Given the outsized role these statutes play, critics have directed their sights on both the laws and the enforcers who wield them. Missing from this debate, however, is an account of the actual conduct of UDAP enforcement in America. How do public UDAP enforcers exercise their considerable discretion? This article examines every UDAP matter resolved by state and federal enforcers in 2014 and presents the initial results of the first comprehensive empirical study of public UDAP enforcement.

Across a range of attributes, public UDAP enforcement varies while also revealing clear patterns. We organize the data to show how enforcers employ distinct strategies. The two main federal enforcers adopt sharply different approaches, especially regarding targets and relief. The state enforcers divide into seven distinct strategies, distinguished not only by case variables, but also by case quantity and leadership in multi-enforcer actions. The picture that emerges should shape the policy and scholarly debate on public UDAP enforcement and help optimize the work of public enforcers.

Keywords: state attorneys general, attorney general, UDAP, unfair and deceptive acts and practices, FTC, CFPB, consumer protection, public enforcement, empirical legal research