How to Identify and Report Unfair, Misleading, and Abusive Practices

Have you ever gone shopping and found the price on your receipt was different than the price on the tag or shelf? Or perhaps your credit union is offering a free checking account, but there are fees associated with the account which makes the checking account not really free. In both scenarios, you’ve been misled and given inaccurate information. But there are laws that ensure financial institutions and other types of businesses are held accountable and required to fix these often-costly errors.  

In 2010, Congress passed the Dodd-Frank Act authorizing the Consumer Financial Protection Bureau to have enforcement and rule-making authority to prevent providers of financial services from using unfair, deceptive, or abusive behavior in their business practices.  

Unfair, deceptive, or abusive practices can happen at any level in the consumer financial service space, including loans (application, underwriting, servicing, collections) or with share deposits (marketing, advertising, or account management).

• Deception. An act or practice is deceptive where:
  • A representation, omission, or practice misleads or is likely to mislead a consumer;
  • A consumer’s interpretation of the representation, omission, or practice is considered reasonable under the circumstances; and
  • The misleading representation, omission, or practice is material.
• Unfair. An unfair act or practice:
  • Causes or is likely to cause substantial injury to consumers;
  • Cannot be reasonably avoided by consumers; and
  • Is not outweighed by countervailing benefits to consumers or to competition.
• Abusive. An act or practice is abusive if it:
  • materially interferes with the ability of a consumer to understand a term or condition of a consumer financial product or service; or
  • takes unreasonable advantage of-
    • a lack of understanding on the part of the consumer of the material risks, costs, or conditions of the product or service;
    • the inability of the consumer to protect the interests of the consumer in selecting or using a consumer financial product or service; or
    • the reasonable reliance by the consumer on a covered person to act in the interests of the consumer.

How to Report Suspected Unfair, Deceptive, or Abusive Acts or Practices

The Federal Trade Commission also takes consumer complaints. While they cannot resolve your individual complaint, the FTC will file your complaint into a secure online database which is used by many local, state, federal and international law agencies. To file a complaint with the FTC, visit https://reportfraud.ftc.gov/.