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Texas Deceptive Trade Practices: An Expensive Business Strategy

Posted on March 19, 2014 by Mintzer Law

Texas lawmakers came to the aid of consumers in 1973 with the enactment of the Deceptive Trade Practices-Consumer Protection Act (DTPA). The law prohibits businesses and individuals from engaging in acts and practices designed to mislead or deceive consumers.

The Texas Business and Commerce Code offers two potential remedies for consumers who are victims of false, misleading or deceptive trade practices. The remedies under chapter 17 of the code are:

  • Enforcement by the state attorney general obtaining court injunctions of the prohibited conduct
  • Consumer lawsuits for damages caused by prohibited acts and practices

Prohibited Deceptive Trade Practices in Texas

The legislature purposely used language in the statute to protect consumers from as many false, deceptive or misleading acts in trade or commerce as possible. Examples of prohibited conduct include:

  • A merchant’s misrepresentation of the nature or value of goods sold to the public
  • Not disclosing information about a product or service to mislead a consumer
  • Breaching an express or implied warranties
  • Violations of truth in lending laws and deceptive financing practices
  • Engaging in prohibited debt collection practices
  • Making false or misleading statements about the condition of a home in a real estate transaction

Penalties and Remedies

The Consumer Protection Division of the Office of the Attorney General is authorized under the DTPA to sue an individual or business suspected of violating the law. The attorney general will usually seek an injunction to stop the violation and prevent it from occurring in the future.

Consumers can file their own lawsuits under the DTPA for the damages equal to the amount of their economic loss attributed to the prohibited acts or practices. Consumers who can prove that the prohibited conduct was committed knowingly by the offender might also be awarded up to three times the amount of their economic damages plus court costs and attorney’s fees.

Defenses to Deceptive Trade Practices

Before a consumer files a lawsuit under the DTPA, written notice of the claim must be given to the offender at least 60 days prior to commencement of the lawsuit. The notice must include the following information:

  • Specific details of the consumer’s complaint
  • The amount of economic and mental anguish damages
  • The amount of attorney’s fees and expenses claimed

A person receiving a 60-day notice from a consumer can make an offer to settle the claim. If the amount offered in settlement is equal to or more than the damages claimed by the consumer, it is a defense to the lawsuit.

Intent and knowledge are key elements in proving a violation of the DTPA. A defense to a consumer lawsuit or an action by the attorney general is that the conduct or practice engaged in was done unintentionally or without knowledge of its deceptive, false or misleading nature.

The best way to avoid deceptive trade practice charges is to hire a credible, experienced attorney. Get a hold of Rand Mintzer today by calling 713-862-8880.