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Deceptive Trade Practices: You Could Be in Big Trouble!

Posted on April 1, 2014 by Mintzer Law

Promotions and advertising are common methods businesses use to entice consumers to purchase the products and services being offered for sale. While most businesses use legitimate methods in their dealings with the public, there are those individuals and companies who engage in practices that are deceptive or unethical.

The protection of consumers from deceptive trade practices is the subject of state and federal laws. The Federal Trade Commission Act and the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) impose criminal penalties and allow consumers to file lawsuits to recover damages and legal fees against businesses that engage in unfair business practices.

Deceptive Trade Practices You Could Be in Big Trouble!

Deceptive Trade Practices

The state and federal laws are similar in the types of acts they designate as being unlawful when used against a consumer. Some prohibited deceptive trade practices include:

  • Misrepresentation of the quality or value of a product
  • Knowingly withholding information about a product or breaching an express or implied warranty
  • Deceptive financing including truth in lending violations
  • Engaging in unfair or deceptive debt collection practices
  • Real estate transactions in which sellers fail to disclose adverse conditions about the property
  • Deceptive investment and insurance practices

Under the Texas Penal Code, certain deceptive business practices are classified as criminal offenses. Some of the deceptive practices include:

  • Misrepresentation of a consumer’s chances of winning a sales contest
  • Intentionally using a weighing or measuring device to misstate quantities purchased
  • Falsely representing a used product as one that is new
  • Advertising merchandise or services for sale knowing that they do not exist or are in limited supply
  • Misrepresenting the advertised price of an item to lure customers into a store

Examples of Common Deceptive Trade Practices

Consumers can be the victim of a deceptive trade practice when they buy products or services based upon an advertisement or signage representing that they are doing so at a liquidation sale or going out of business sale. The DTPA sets guidelines and conditions for auctions, liquidation sales or going out of business sales to protect consumers from unscrupulous business owners who might be closing a location but are continuing operations elsewhere.

Another common trap for consumers involves the sale of used watches. Sellers of used watches must inform a consumer that the watch being offered for sale is not new. Purchasers of used watches must be given an invoice that clearly identifies the watch as being used. Advertisements and displays must clearly state that the watch is used.

Penalties for Deceptive Business Practices

Consumers who are victims of deceptive business practices in Texas can sue the business with whom they dealt for damages. Recoverable civil damages include the economic loss and mental anguish inflicted upon the consumer. The court, if it finds that the business acted with the intent to deceive consumers, may award treble damages and attorney’s fees to the consumer.
Those acts designated as crimes under the DTPA or the penal code usually are misdemeanors. The penalties include fines, incarceration, or a combination of fines and incarceration.

There are many instances where an honest businessman is accused of violating deceptive trade practice laws when there was merely a simple misunderstanding. If you have been accused of committing a deceptive business act, then you need professional help…and FAST. Let Rand Mintzer handle your case by calling 713-862-8880.

*Image courtesy of freedigitalphotos.net