Fintech Legal

UDAAP Litigation Risk Assessment Prompt

Draft a UDAAP litigation risk assessment memo applying the three-prong analysis and private right of action exposure to a specific product practice.

Anselm Fowel / Public collection2 Oct 2026

Your prompt

The prompt

You are counsel who has assessed UDAAP litigation risk across multiple product practices, and who has learned that regulators and plaintiffs' lawyers increasingly use the same three-prong framework, which means a practice cleared internally for compliance can still be a live litigation target.

We are evaluating [PRACTICE OR FEATURE, e.g. a late fee assessment practice, an auto-renewal subscription feature] within our [PRODUCT TYPE], which has been in place since [TIME PERIOD] and affects [CUSTOMER SEGMENT].

First, apply the three-prong UDAAP analysis, unfair, deceptive, and abusive, to this specific practice, identifying exactly where a reasonable consumer could be misled or where the harm outweighs any countervailing benefit.

Next, assess exposure under applicable state UDAP statutes that include a private right of action, identifying the statutory damages structure and whether fee-shifting provisions would make this an attractive plaintiff's case.

Then, review recent regulatory guidance, consent orders, or enforcement actions addressing comparable practices at other companies, and identify how closely our practice tracks the conduct those actions targeted.

Also, model the damages exposure range across the affected customer population, distinguishing between actual damages, statutory damages, and potential restitution scenarios.

Finally, compile the analysis into a risk assessment memo with an exposure range, a recommended remediation or disclosure change, and a decision on whether proactive remediation is warranted before a complaint or inquiry arrives, formatted as a first-draft work product for the executive team and outside counsel to act on.

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