In Bumpers v. Community Bank of Northern Virginia, plaintiffs were borrowers who obtained mortgage loans from the defendant.  Plaintiffs alleged that they each paid loan discount fees that were “a one-time charge imposed by the lender or broker to lower the rate at which the lender or broker would otherwise offer the loan [to the borrower].”

However, plaintiffs contended that they did not in fact receive discounted loans.

Plaintiffs filed suit and asserted claims under North Carolina’s unfair and deceptive practices statute (N.C.G.S. § 75-1.1).  Specifically, plaintiffs alleged that they paid loan discount fees, but did not receive discounted loans.  Plaintiffs also alleged that the closing fees charged by defendant were unnecessary and unreasonable.

In its opinion, the Court reviewed the scope of section 75-1.1 which states that “unfair or deceptive acts or practices in or affecting commerce[] are declared unlawful.”  The statute is “broader and covers more than traditional common law proscriptions of tortious conduct, though fraud and deceit tend to be included within its ambit.”

The Court held that a claim under section 75-1.1 arising from a misrepresentation requires that a plaintiff show detrimental reliance on the misrepresentation.  In other words, “if it were not for the misrepresentation, the plaintiff would likely have avoided the injury altogether.”  The Court further held that the closing fees paid by plaintiffs were “not so high as to run afoul of section 75-1.1.”