Liability Under the Tennessee Consumer Protection Act for Unfair Conduct

LoansThe Tennessee Consumer Protection Act (the "TCPA") forbids not just "deceptive" acts and practices, but also, "unfair" acts or practices. When violations of the TCPA are alleged in a lawsuit, the stakes can become much higher for the parties than they would be in a lawsuit involving the same conduct, event or transaction, but in which only typical breach of contract and/or negligence claims are alleged.

Why? A plaintiff who proves violations of the TCPA by the defendant may be able to recover its attorney’s fees (or, more likely, some of them) as well as triple the amount of the plaintiff’s actual damages.

What conduct or practices are "unfair" under the TCPA? The word "unfair," after all, could have a very, very broad meaning. Some Tennessee courts have given guidance as to what types of conduct do and do not amount to "unfair" conduct for purposes of the TCPA. A Tennessee appeals court very recently decided that "simple incompetent performance of contractual duties" does not amount to an "unfair" act or practice which violates the TCPA. In that case, a bank, despite repeated requests by the plaintiff who had fully repaid the bank’s loan, had been unable to deliver the title to a truck which it had financed for the plaintiff.

In another Tennessee case, the court held that the defendant did engage in an "unfair" act where it refused to release the title to a vehicle for which the plaintiff had fully paid unless the plaintiff referred two people to the defendant’s dealership who purchased vehicles.

In Tennessee, every act that results ultimately in some loss to a consumer is not necessarily a violation of the TCPA because it is "unfair." It is also clear that, in Tennessee, every negligent act or practice does not violate the TCPA. It is equally clear, on the other hand, that a plaintiff, even if he or she cannot prove that the defendant acted deceptively, can still prevail under the TCPA if that plaintiff can prove that the defendant engaged in an unfair act or practice. To prevail on such an allegation the court, of course, would have to agree that the defendant’s conduct was unfair.