There is a tendency to think of consumer fraud and misrepresentation as intentional acts that deceive consumers into engaging in transactions that they would not otherwise engage in. A recent case demonstrates that the Consumer Financial Protection Bureau, and at least one federal district court, take a much different view — that misrepresentation exists simply because statements later turn out to be incorrect, regardless of whether the person making the representation may have had a reasonable belief and good faith legal basis for the belief before making the representation.

In 2014, the CFPB filed a suit against CashCall Inc., alleging that CashCall engaged in unfair, deceptive, and abusive acts and practices (UDAAP). On June 30, 2016, the CFPB filed a motion for partial summary judgment in the case. On Aug. 31, 2016, a U.S. district court granted the CFPB’s motion for partial summary judgment and found that CashCall’s actions were deceptive.

Originally published in Law360, New York on September 28, 2016.