What is UDAAP?

The three tests

• Unfair: under 12 U.S.C. 5531(c), checked Oct. 28, 2026, the practice causes or is likely to cause substantial injury that consumers cannot reasonably avoid, and the injury is not outweighed by benefits to consumers or competition.
• Deceptive: the CFPB's exam procedures, updated September 2023, call a representation or omission deceptive when it misleads or is likely to mislead, the consumer's reading is reasonable, and the point is material.
• Abusive: under 12 U.S.C. 5531(d), checked Oct. 28, 2026, the practice materially interferes with a consumer's ability to understand a term, or takes unreasonable advantage of the consumer's lack of understanding, inability to protect their interests, or reasonable reliance on the company.
• Intent is not required. The CFPB's 2023 exam procedures say a claim can be deceptive even if no consumer has been misled yet.

Finfluencer and paid promotion rules

The FTC's Endorsement Guides, revised June 29, 2023, require a clear and conspicuous disclosure when an influencer has a material connection to a brand, such as payment or free products. The FTC's influencer FAQ, checked Oct. 28, 2026, says a platform's built-in disclosure tool may not be enough on its own.

In August 2022 the CFPB issued an interpretive rule treating digital marketers that target or place ads as service providers it could pursue for UDAAP. The CFPB withdrew that rule among 67 guidance documents in May 2025, according to the Consumer Financial Services Law Monitor, May 9, 2025. The statute's UDAAP ban on service providers still stands.

Broker dealers have a separate rule. FINRA fined M1 Finance $850,000 in March 2024 over influencer posts that were unbalanced or promissory and had no principal approval, under FINRA Rule 2210, according to Troutman Pepper.

How a fintech marketing team checks a claim

1. Read the ad, video or post as a whole and write down the net impression a reasonable customer takes from it.
2. Match every rate, fee, speed or approval claim to the product terms in force on the day it runs.
3. Put material limits next to the claim they qualify, at the same size and in the same format.
4. Give every paid creator a written brief, require a visible disclosure at the start of the post, and keep a copy of what went live.
5. Recheck claims after every product or pricing change.

Sources

1. 12 U.S.C. 5531, Prohibiting unfair, deceptive, or abusive acts or practices · Cornell Law School Legal Information Institute, Oct. 28, 2026Supports: Checked Oct. 28, 2026: the statutory unfairness and abusiveness standards.
2. 12 U.S.C. 5536, Prohibited acts · Cornell Law School Legal Information Institute, Oct. 28, 2026Supports: Checked Oct. 28, 2026: the ban applies to any covered person or service provider.
3. Unfair, Deceptive, or Abusive Acts or Practices (UDAAPs) examination procedures · Consumer Financial Protection Bureau, Sept. 25, 2023Supports: The three part deception test and the net impression standard for ads.
4. FTC's Endorsement Guides: What People Are Asking · Federal Trade Commission, Oct. 28, 2026Supports: Checked Oct. 28, 2026: influencers must disclose material connections clearly and conspicuously, and platform tools may not be enough.
5. CFPB Rescinds Dozens of Regulatory Guidance Documents in Major Regulatory Shift · Consumer Financial Services Law Monitor (Troutman Pepper Locke), May 9, 2025Supports: The withdrawn list includes the 2022 digital marketer interpretive rule, 87 FR 50556.
6. Influencer Considerations as FINRA Initiates Crackdown · Troutman Pepper, May 22, 2024Supports: FINRA's $850,000 fine against M1 Finance in March 2024 over influencer posts under Rule 2210.

Related questions

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General information, not legal advice.

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