Consumer Rights

TDCA/ Consumer

"Consumer" means an individual who has a consumer debt, or a personal, family, or household obligation arising from a transaction.

TDCA/ Credit Bureau

"Credit bureau" means a person or business who, for compensation, gathers, records, and disseminates information relating to the creditworthiness, financial responsibility, and paying habits of a person for the purpose of furnishing that information to someone else.

TDCA/ Creditor

"Creditor" means a party, other than a consumer, to a transaction or alleged transaction involving one or more consumers.

Goods

"Goods" include tangible goods and real property purchased or leased for use, including resale. Typical goods are automobiles, houses, foodstuffs, and equipment. "Goods" does not include stock, accounts receivables, CDs, partnership interests, or other intangibles. DTPA § 17.45(1).

TDCA/ Third-Party Debt Collector

"Third-party debt collector" means the same as "debt collector" under the federal FDCPA except that it does not include an attorney collecting a debt on behalf of a client, unless the attorney has non-attorney employees who regularly engage in debt collection.

TDCA/ Prohibited Practices and Restrictions on Debt Collectors: Threats or Coercion

1. Threats or Coercion Under § 392.301, a debt collector may not use threats, coercion, or attempts to coerce against any person, and specifically may not: i) Threaten or use violence; ii) Accuse or threaten to falsely accuse a person of any crime; iii) Threaten to falsely tell others that the debt is not disputed; iv) Threaten that nonpayment of a consumer debt will result in the seizure, repossession, or sale of the person's property without proper court proceedings; v) Threaten to sell or assign the debt to another and represent that such sale will result in the consumer's loss of a defense to payment of the debt; vi) Threaten criminal arrest or incarceration, or threaten that a criminal action will be taken when the consumer has not committed a crime; or vii) Threaten to take any action prohibited by law.

Promoting a pyramid scheme

A "pyramid promotional scheme" is a plan by which a person gives consideration for the opportunity to receive compensation that is derived primarily from a person's introduction of other persons to participate in the plan rather than from the sale of a product. Such a scheme is prohibited. A person commits an offense if the person "contrives, prepares, establishes, operates, advertises, sells, or promotes" a pyramid promotional scheme. DTPA § 17.46(b)(21). Such conduct is also punishable as a state jail felony. DTPA § 17.461.

Equitable Relief

A consumer can seek equitable relief such as an injunction or restraining order (temporary or permanent), or request rescission or restitution in addition to damages.

Fed Fair Debt Collection Practices Act/ Consumer

A consumer is "any natural person obligated or allegedly obligated to pay any debt." FDCPA § 1692a(3). With respect to restrictions placed by the FDCPA on direct communications with the debtor, "consumer" is extended to the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator. FDCPA § 1692c(d).

Producing Cause

A consumer must show the defendant's actionable conduct was a "producing cause" of damages to the consumer. "Producing cause" is a cause that is a substantial factor in bringing about the damages and without which the damages would not have occurred. Unlike the legal standard of "proximate cause," no element of foreseeability is included.

Seek or Acquire

A consumer typically "acquires" goods or services when he receives them in connection with payment of some sort. However, the DTPA does not require that the consumer actually receive the goods or services nor does it require that he actually pay for them. Merely "seeking" to purchase (or lease) is sufficient to qualify the plaintiff as a "consumer" as long as he is acting in good faith—having both the subjective intent to purchase and some credible indicia of the capacity to consummate the transaction. The plaintiff is also not required to be the actual purchaser—third-party beneficiaries also may be considered consumers for purposes of the DTPA. It must be shown that the third party was an intended beneficiary of the transaction. An incidental beneficiary is not considered a proper plaintiff (i.e., passenger in a car, friend who borrows goods, fiancé of consumer).

"As Is" Provision in Contract

A contract provision which states that goods or services are purchased or leased "as is" may be used to defeat a DTPA claim because causation is negated. In order to be enforceable, the "as is" clause must be freely negotiated between similarly sophisticated parties as part of the bargain in an arm's-length transaction. It will not be given effect if it is procured by fraud or fraudulent concealment, when the seller impairs the buyer's ability to inspect the product or if it is merely a "boiler-plate" provision in a contract of adhesion. Prudential Ins. Co. v. Jefferson, 896 S.W.2d 156 (Tex. 1995).

Other Restrictions/ Liability for Use of an Independent Debt Collector

A creditor is liable for using a debt collector that it knows uses unlawful practices.

Other Restrictions/ Surety Bond

A creditor or credit bureau must post a $10,000 bond with the Texas Secretary of State, and provide verification of debts upon request.

Fed Fair Debt Collection Practices Act/ Debt Collector

A debt collector is any person who uses any instrument of interstate commerce or the mail: i) In any business the principal purpose of which is the collection of any debts; or ii) Who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

TDCA/ Prohibited Practices and Restrictions on Debt Collectors: Unfair or Unconscionable Means

A debt collector is generally restricted from collecting debts in the following manners. a. Necessaries of life The debt collector may not ask the consumer to state that the debt was incurred "for the necessaries of life" (which has different legal consequences than ordinary debt), when that was not the case. b. Collecting or attempting to collect additional expenses Collection of interest, a fee, or an incidental expense to an obligation by a debt collector is prohibited unless the charge, fee, or expense is expressly authorized by the agreement creating the obligation or otherwise legally chargeable to the consumer. TDCA § 392.303. 4. Fraudulent, Deceptive, or Misleading Representations A debt collector is restricted from using fraudulent, deceptive, or misleading representation in order to collect a debt by any of the following means: i) Failing to properly identify the debt collector or the amount of the debt or falsely representing the status or nature of the services rendered; ii) Failing to disclose that communication with the debt collector is voluntary and can be used against the consumer; iii) Implying that the government or courts are part of the debt collection, either as a creditor or debt collector, including use of simulated government seals or insignia; iv) Implying that the debt collector is an attorney if he is not, or using communication that purports to be from an attorney or a law firm if it is not; v) Implying that the debt collector is an independent, bona fide debt collection organization when the debt is actually being collected by the debtor; vi) Using communication that violates U.S. postal laws and regulations; vii) Representing that the debt may be or will be increased by the addition of attorneys' fees, investigation fees, or service fees when the award of such fees is subject to judicial discretion; viii) Not disclosing during the initial communication that the debt collector is attempting to collect a debt and that all information gained in the communication will be used for that purpose, or if the communication is a subsequent communication that it is from a debt collector; ix) Requiring a response to a place other than the debt collector or creditor's address; x) Misrepresenting the character, amount, or extent of a debt or the debt's status in a judicial or governmental proceeding; xi) Failing to maintain a list of all business or professional names known to be used by all persons collecting consumer debts for the debt collector; xii) Falsely representing that the debt collector has something of value in order to elicit information about the consumer; or xiii) Falsely representing that a debt collector is bonded, affiliated, or vouched for by a government official.

TDCA/ Prohibited Practices and Restrictions on Debt Collectors: Harassment

A debt collector is generally restricted from directly contacting any person in the following manners: i) Using profanity or language intended to abuse the hearer or reader; ii) Placing telephone calls without disclosing the name of the individual making the call and with intent to annoy, harass, or threaten the person called; iii) Repeatedly or continuously calling with the intent to harass the person at the called number; and iv) Incurring additional expenses for a person by incurring long distance or telegram fees for the person without disclosing the name of the caller.

FDCPA/ Harassment or Abuse

A debt collector may not commit the following non-exclusive list of acts against any person, including persons other than the consumer, in connection with the collection of a debt: i) Harass, oppress, or abuse; ii) Threaten or use violence; iii) Use profanity; iv) Publish the consumer's debts as a list to others; and v) Fail to disclose identification.

FDCPA/ False or Misleading Representations

A debt collector may not use any false, deceptive, or misleading representations or means in connection with the collection of any debt, such as those listed here. a. False implication of government involvement Implying that the government or courts are part of the debt collection, either as a creditor or debt collector, is prohibited. b. Misinformation regarding debt A debt collector may not falsely represent (i) the character, amount, or legal status of any debt, or (ii) any services rendered or compensation that may be lawfully received by any debt collector for the collection of a debt. c. Falsely implying the debt collector is an attorney The FDCPA prohibits a debt collector from falsely representing or implying that any individual is an attorney, or that any communication is from an attorney when that is not the case. d. Implying the debt collector is a consumer reporting agency The FDCPA prohibits a debt collector from falsely representing or implying that the debt collector operates or is employed by a consumer reporting agency. e. Implication of crime The debt collector may not represent or imply that failure to pay the debt is a crime and may result in criminal arrest or incarceration. f. Implication of loss of defense The debt collector may not represent or imply that failure to pay will result in a loss of claim or defense to payment of the debt. g. Failing to inform the consumer The FDCPA requires the debt collector to inform the consumer that he is attempting to collect a debt and that any communication with the debt collector can be used against the consumer. h. Deceptive forms The debt collector may not use deceptive forms to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection. 5. Unfair or Unconscionable Practices A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt, such as those discussed below. a. Charging additional expenses The debt collector may not charge a debtor additional expenses by collecting or incurring more debt than permitted by agreement or law, such as collect calls or telegram fees. b. Depositing postdated checks Depositing postdated checks, or soliciting postdated instruments is considered an unfair or unconscionable act under FDCPA. c. Taking or threatening to take any non-judicial action A debt collector may not take or threaten to take any non-judicial action in order to effect dispossession or disablement of property. FDCPA § 1692(f)(6). 6. Failure to Provide Validation of Debts Within five days of contact with the consumer, a debt collector must provide the consumer written notice containing each of the following: i) The amount owed; ii) The name of the creditor; and iii) Notification. FDCPA § 1692(g). Notification must state that (i) unless the consumer, within 30 days after receipt of the notice, disputes the validity, the debt is assumed valid, and (ii) upon a written notice of a dispute, the debt collector will stop the collection process, obtain verification of the debt, and forward a copy to the consumer. Failure of the consumer to dispute the debt is not an admission of liability. FDCPA §1692g(c).

Fed Fair Debt Collection Practices Act/ Debt

A debt is "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services that are the subject of the transaction are primarily for personal, family, or household purposes." FDCPA § 1692a(5).

Settlement Offer and Recovery Limitations

A defendant may offer a settlement to the consumer. If an offer is rejected, then a defendant may file with the court an affidavit certifying its rejection, and a subsequent court may limit damages based on the reasonableness of the original offer. DTPA § 17.5052. a. Requirements The settlement offer must: i) Include separately stated amounts of money for damages and attorney's fees; and ii) Generally be sent within 60 days after receipt of the DTPA notice. DTPA § 17.5052(a), (d). A settlement offer may also be made 90 days after filing his answer to the DTPA suit, if no mediation has occurred, or 20 days after a mediation under § 17.5051 has occurred. See § I.K.5 Compulsory Mediation, infra.

FDCPA/ Defenses

A defendant must show by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. FDCPA § 1692k(c).

Insurance Company's Common Law Duties: Stowers Doctrine

A liability insurer also has a common-law duty to its insured to accept a reasonable settlement demand within policy limits. The "Stowers Doctrine" establishes that an insured will have a cause of action for negligence against his insurer when the insurer unreasonably refuses to accept an unconditional settlement offer that is within the policy limits. If the insured suffers damages by subsequently being hit with a judgment in excess of policy limits, then the insured can recover as damages his additional liability beyond the policy limits. G.A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex. Comm'n App. 1929).

Remedies/ Private Remedies

A person can bring suit for the following remedies: i) Actual damages; ii) An injunction or restraining order (temporary or permanent); iii) For certain offenses, a civil penalty of not less than $100 for each violation; and This is similar to "additional damages" under FDCPA § 1692k(a)(2)(A), but courts have interpreted this as available only upon a finding of actual damages.

Venue Violation

A person cannot knowingly file suit in any county other than the county where the defendant resides at the commencement of the action or the county in which the defendant signed the contract. DTPA § 17.46(b)(23).

Credit Bureaus/ Misrepresentation

A person or entity may not use the name "credit bureau" unless it is in fact operating as a credit bureau. TDCA § 392.305.

DTPA Exemptions: Personal Injury Exception #2

A plaintiff with a claim for damages for a violation of a tie-in statute is not limited to recovery of just "economic damages" but may also recover all "actual damages" incurred, including all personal injury damages if applicable. DTPA § 17.50(h), see § I.M. Tie-In Statutes, infra.

Insurance Code Remedies/ Actual Damages

A prevailing plaintiff may be awarded actual damages. "Actual damages" available under the Insurance Code are broader than the "economic damages" available under the DTPA.

Insurance Code Remedies: Attorneys' fees and Costs

A prevailing plaintiff may recover reasonable and necessary attorneys' fees and court costs.

Defenses (2)

A viable defense is that a defendant shows the violation resulted from a bona fide error that occurred notwithstanding the use of reasonable procedures to avoid the error. TDCA § 392.401.

Unfair Claims Settlement Practices Act

A violation of the Unfair Claims Settlement Practices Act is actionable under the DTPA. See § IV.A.5.i. Unfair Settlement Practices, infra.

Falsely Advertising Limited Quantity

Advertising goods or services with intent not to meet the supply of a reasonably expected demand is prohibited without advertising a limited quantity. DTPA §17.46(b)(10).

False Advertising

Advertising goods or services with intent not to sell them as advertised is prohibited. DTPA § 17.46(b)(9).

Going Out of Business Scam

Advertising of a sale and fraudulently representing that a person is going out of business is prohibited. DTPA § 17.46(b)(17).

Annuity Contracts

Also prohibited is the selling of an annuity contract for public employees as part of a salary reduction agreement. DTPA § 17.46(b)(26).

Chain referral scams

Also prohibited is using a chain referral sales plan in connection with the sale or offer to sell goods, which uses the sales technique in which the buyer receives the seller's representation that the buyer shall have the right to receive compensation for furnishing to the seller the names of other prospective buyers, if the compensation is contingent subsequent to the time the buyer purchases the goods. DTPA § 17.46(b)(19).

Insurance Code / Prohibited Practices: Boycott, coercion, or intimidation

An insurer may not use coercion, intimidation, or boycott to create an "unreasonable restraint of or a monopoly in the business of insurance." Tex. Ins. Code Ann. § 541.054.

Insurance Code / Prohibited Practices: Filing a false financial statement

An insurer may not, with the intent to deceive, file false public statements regarding the financial condition of the insurer. Tex. Ins. Code Ann. § 541.055.

Settlement Offer is Not Admissible

An offer of settlement cannot be used as evidence except in connection with limiting damages or attorney's fees. DTPA § 17.5052(k).

Notice and Settlement Offer Provisions:Sixty-Day Notice Letter

At least 60 days preceding a suit brought under the DTPA, a consumer must provide written notice to a defendant detailing the complaint, damages, and expenses, including attorney's fees. The amounts claimed for damages and attorney's fees must be separately stated. During the 60 days, the defendant may ask to inspect the goods at issue and may make a settlement offer.

Misrepresenting charges for warranty or guarantee

Basing a charge for the repair of any item in whole or in part on a guaranty or warranty instead of on the value of the actual repairs without stating separately the charges for the work and the charge for the warranty or guaranty is prohibited. DTPA § 17.46(b)(15).

Affiliation or Association

Causing misunderstanding as to the "affiliation, connection, or association with, or certification by, another" is a type of certification fraud. DTPA § 17.46(b)(3).

Source, Sponsorship or approval

Causing misunderstanding as to the "source, sponsorship, approval, or certification of goods or services," is prohibited. DTPA § 17.46(b)(2).

Breach of Warranty

Consumers may bring a cause of action through the DTPA for breach of an express or implied warranty. DTPA does not define or establish any warranties; it is merely a vehicle through which claims can be brought. Whether a warranty is created, breached, disclaimed, or limited is a function of existing warranty law under the Uniform Commercial Code ("UCC") or common law. Common warranties include express warranties and the following implied warranties.

Credit Bureaus/ Corrections

Corrections must be made within five days if the inaccuracy is admitted by a third-party debt collector, or within 30 days of complaint, if a third-party debt collector fails to reply to the credit bureau

Credit Bureaus/ Credit Reports

Credit bureaus must furnish credit reports within 45 days of request

DTPA/ Standing

DTPA provides for redress for violations through both public enforcement (through the Consumer Protection Division of the Texas Attorney General's Office as well as through cooperation with local District or County Attorneys) and a private right for a consumer (regardless of the concept of privity) to seek redress for violations in state court. DTPA §§ 17.47, 17.48, 17.61.

Cumulative Remedy

Damages awarded under the DTPA are in addition to any other remedies, but recovery cannot be doubled by recovery under both the DTPA and some other remedy. DTPA § 17.43.

TDCA/ Debt Collector

Debt collector" means a person who directly or indirectly engages in debt collection, including a person who represents to be a collection device intended to be used to collect consumer debts. It also includes one collecting his own debt.

Odometer Fraud

Disconnecting, turning back, or resetting the odometer of a motor vehicle so as to reduce the number of miles indicated on the odometer gauge is prohibited. DTPA § 17.46(b)(16).

Insurance Code Remedies/ Treble Damages

Discretionary additional damages not to exceed three times the amount of actual damages are recoverable if it is proven that a defendant knowingly committed a violation.

Disparaging goods or services of another

Disparaging another's goods, services, or business by false or misleading representations is prohibited. DTPA § 17.46(b)(8).

Failing to disclose information

Failing to disclose information concerning goods or services that was known at the time of the transaction is prohibited if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed. DTPA § 17.46(b)(24). This is an example of an instance when knowledge, intent, and reliance are required for a violation of the DTPA. There is a presumption of intent when it is found that the undisclosed information was material.

Purchase or Lease

For a transaction to be protected under the DTPA, a consumer must seek or acquire goods or purchases by "purchase or lease." DTPA § 17.45(4). Individuals who receive goods or services gratuitously from the defendant are not considered "consumers" for purposes of the DTPA. Caveat: Receiving goods or services through another purchaser's gift does not preclude someone from becoming a consumer. A person who receives a gift that was purchased by the giver may be defined as a "consumer," if he is an intended beneficiary of the transaction. Note that the purchaser of the gift also would be considered a "consumer."

Prescription Drug Card

Fraudulently advertising, selling, or distributing a card purporting to be a qualifying prescription drug identification card is prohibited. DTPA § 17.46(b)(18).

Insurance Code Remedies: Settlement Offers

Generally, a defendant may offer a settlement to the consumer within the 60-day notice period. Tex. Ins. Code Ann. § 541.156. If the offer is rejected, then a defendant may file an affidavit with the court certifying the offer's rejection, and a subsequent court may limit damages based on the reasonableness of the original offer. Tex. Ins. Code Ann. § 541.158-159. An offer of settlement cannot be used as evidence. Tex. Ins. Code Ann. § 541.160.

FDCPA/ Limitations

Generally, a one-year statute of limitation applies to all actions brought under the FDCPA. FDCPA § 1692k(d).

Limitations

Generally, a one-year statute of limitation for criminal charges to be filed applies to all actions under the TDCA. TDCA § 392.402.

Limitations

Generally, a two-year statute of limitation applies to all actions brought under the DTPA. The statute begins to run from when the DTPA violation occurred or from when the consumer discovered or reasonably should have discovered the wrongfully-caused injury. The limitations date may be extended 180 days if the defendant knowingly caused a delay in filing suit. DTPA § 17.565.

Compulsory Mediation

Generally, once a suit is brought under the DTPA, either party may compel mediation within 90 days after the date of service. The court appoints a mediator and each party participates and shares costs, unless the requesting party is seeking less than $15,000 in economic damages. DTPA § 17.5051.

Insurance Code Remedies: Compulsory Mediation

Generally, once a suit is brought under the Insurance Code, either party may compel mediation prior to 90 days after the date of service. The court shall appoint a mediator and each party shall participate.

Remedies: Private Cause of Action

Generally, the DTPA allows a private cause of action to recover "economic damages." DTPA § 17.50(a). If the actionable conduct was committed "knowingly" or "intentionally," the consumer may recover damages for mental anguish and discretionary additional damages. If the actionable conduct is a violation of a tie-in statute, the consumer may recover any and all "actual damages."

DTPA/ Exemptions: Business Consumers

Generally, the DTPA does not apply to the following: 1. Certain Business Consumers The DTPA is inapplicable to business consumers with assets of over $25 million, or those that are owned or controlled by a corporation or entity with assets of $25 million or more.

FDCPA/ Exemptions

Generally, the FDCPA does not apply to bad checks or certain bad check enforcement programs operated by private entities, generally in cooperation with the state for pre-trial diversion purposes. FDCPA § 1692p(b).

Waiver

Generally, waivers of the DTPA are void and unenforceable as they violate public policy. DTPA § 17.42. Exception: The statute allows waivers if all of the following are evident. 1. Prescribed Written Content The waiver must have the following heading: "Waiver of Consumer Rights" followed by, "I waive my rights under the Deceptive Trade Practices—Consumer Protection Act, § 17.41 et seq., Business & Commerce Code, a law that gives consumers special rights and protections. After consultation with an attorney of my own selection, I voluntarily consent to this waiver." 2. Signed by the Consumer The consumer must sign the written waiver. 3. Conspicuous The written waiver must be in bold face type of 10-point size or bigger. 4. Similar Bargaining Position The consumer must not be in a significantly unequal bargaining position. 5. Legal Representation The consumer must be represented by an attorney of his own choosing.

Insurance Code Remedies: Frivolous Suit Counterclaim

If a court determines that a lawsuit brought under the Insurance Code is groundless and brought in bad faith or brought for the purposes of harassment, the court shall award the defendant court costs and reasonable and necessary attorney's fees.

DTPA Exemptions: Written Contract over 100,000

If a transaction arising out of a written contract is over $100,000, and the consumer is represented by an attorney, then the DTPA does not apply, unless the contract involves the consumer's residence (which does fall under the DTPA).

Fake corporation

If not incorporated, an entity may not use "corporation," "incorporated," or an abbreviation of those terms in its name. DTPA § 17.46(b)(25).

Abatement is remedy for improper pre-suit notice

If notice is improper, a defendant may file a "plea in abatement." DTPA §17.505.

Exceptions to Notice Letter Requirements a. Limitations about to run

If the 60 days' notice requirement is impracticable because of an imminent limitations deadline, then pre-suit notice is not required.

DTPA in counterclaim

If the DTPA claim is being asserted in a counterclaim, then pre-suit notice is not required. In either case, the 60-day opportunity to inspect and make a settlement offer runs from the date of service of the suit or counterclaim. DTPA § 17.505(b).

Remedies: Mental Anguish

If the actionable conduct was committed "knowingly" or "intentionally," then the consumer may also recover damages for mental anguish. Even so, to recover for mental anguish, the consumer must still present direct evidence showing a high degree of mental pain and distress that causes a substantial disruption in the consumer's daily routine.

Counterclaim for Frivolous Suit

If the court determines that a lawsuit brought under DTPA is groundless in law or fact, brought in bad faith, or for the purposes of harassment, then the court shall award the defendant reasonable and necessary attorney's fees and court costs. DTPA §§ 17.43, 17.50(c).

Remedies/ Frivolous Suits

If the court determines that a lawsuit brought under TDCA is based on bad faith and for the purposes of harassment, then the court shall award the defendant reasonable attorney's fees and costs.

Remedies: Discretionary Additional ("treble") damages

If the defendant's conduct was committed "knowingly" or "intentionally," then the trier of fact may award additional damages to the consumer. The limit on these additional damages is three times the economic damages if the conduct was committed "knowingly," or three times the sum of economic damages and damages for mental anguish if the conduct was committed "intentionally." DTPA § 17.50(b)(1). Because of this, the potential recovery under the DTPA is often referred to as "treble damages."

Limitation on consumer's recovery for rejected settlement offer

If the trier-of-fact finds the consumer's damages at trial to be substantially the same as or less than the amount offered in a rejected settlement offer, the consumer will only get the lesser of the two amounts. DTPA § 17.5052(g).In that event, the court will look at the attorney's fees incurred up to the point of rejection of the settlement offer and may limit the consumer's fees to the amount offered in the defendant's settlement offer if they are close to the same as the amount offered.

Insurance Code / Prohibited Practices: Deceptive name, word, symbol, device, or slogan

Insurers may not use names, words, symbols, or slogans that may be untrue, or cause confusion as to the insurer's identity and/or affiliations. Tex. Ins. Code Ann. § 541.059.

Defenses: Statutory- Written Notice of Reliance on Third Party Information

It can be a defense to a DTPA claim that a defendant gave the consumer timely written notice that he was relying on government or thirty-party information that was unknowingly false or inaccurate. DTPA § 17.506(a).

Defenses: Thirty Dat tender of damages claimed and attorney fees incurred

It is a defense to a DTPA claim if the defendant tenders the full amount of damages claimed and an amount of attorney's fees reasonably incurred within 30 days after receiving the consumer's DTPA notice. DTPA § 17.506(d).

Misrepresenting work performed

It is prohibited to fraudulently misrepresent that work or services have been performed on, or parts replaced in goods. DTPA § 17.46(b)(22).

Warranty Fraud

It is prohibited to represent that a guarantee or warranty involves rights or remedies that it does not have. DTPA § 17.46(b)(20).

Used Goods as New

It is prohibited to represent that goods are original or new if they are not. DTPA § 17.46(b)(6).

Misrepresentation of Repairs

Knowingly making false or misleading statements concerning the need for parts, replacement, or repair service is prohibited. DTPA § 17.46(b)(13).

Insurance Code Remedies: Limitations

Like the DTPA, a two-year statute of limitation applies to all actions brought under the Insurance Code. The statute begins running on the date that the violation occurred, or the plaintiff discovered or should have discovered the violation. A 180-day extension may be granted if the defendant "knowingly" caused a delay in filing suit. Tex. Ins. Code Ann. §§ 541.162, 541.254.

Misrepresenting Price Reductions

Making false or misleading statements of fact concerning price reductions is prohibited. DTPA § 17.46(b)(11).

Misrepresenting Characteristics ( Common)

Misrepresenting that goods or services have "sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have, or that a person has a sponsorship, approval, status, affiliation, or connection that he does not," is prohibited. DTPA § 17.46(b)(5).

Misrepresenting Authority

Misrepresenting the authority of a salesperson, representative, or agent to negotiate the final terms of a consumer transaction is prohibited. DTPA § 17.46(b)(14).

Manufactured Housing Standards Act

Mobile homes built before 1976 and manufactured homes built after 1976 (and at least 40 feet long and eight feet wide) are subject to the protection of a written warranty of habitability according to HUD standards and the seller's ability to convey proper title. Tex. Occ. Code § 1201.

Insurance Code/ Private Cause of Action

Much like the DTPA, Chapter 541 provides a private cause of action for the recovery of damages, injunctive relief, additional damages, and attorney's fees to any "person" harmed by conduct declared to be a violation of the statute. Tex. Ins. Code Ann. § 541.151.

Insurance Code Remedies: Pre-Suit Notice

Not later than the 61st day preceding a suit brought under the Insurance Code, the plaintiff must provide notice to the defendant detailing his complaint, damages, and expenses, including attorney's fees.

Passing Off

Passing off goods or services as those of another is prohibited. DTPA § 17.46(b)(1).

Insurance Code / Prohibited Practices: Defamation

Passing on false or derogatory information about another insurer, directly or indirectly, is considered a violation of the statute. This rule applies to any oral or written statements, including statements in any pamphlet, circular, article, or literature. Tex. Ins. Code Ann. § 541.053.

DTPA Exemption: Personal Injury Exception #1

Personal injury claims can be pursued for recovery of economic damages (e.g., medical expenses, lost earnings), but not pain and suffering or physical impairment. As with other DTPA claims, recovery of damages for mental anguish from personal injury may be obtained upon a "knowingly" finding.

Insurance Code Remedies: Equitable an other relief

Plaintiffs may request an order enjoining the act or failure to act complained of or any other relief the court determines is proper. Tex. Ins. Code Ann. §§ 541.151-541.152.

Price gouging in a disaster

Price gouging is prohibited, and is defined as taking advantage of a disaster by demanding an exorbitant price in connection with the sale or lease of a necessity, such as fuel or food. DTPA § 17.46(b)(27).

Home Solicitation Act

Protection is given to a consumer who is specifically solicited at her home "for the purchase of goods or services for consideration that exceeds $25 payable in installments or in cash; or for the purchase of real property for consideration that exceeds $100 payable in installments or in cash." Tex. Bus. & Com. Code § 601.002. Consumers are entitled to a written contract, specific disclosures using the statutory language, as well as an explanation of payment and the right to cancel after the third day. After cancellation, any goods or payments must be returned properly to the respective parties. The Home Solicitation Act does not apply to farm equipment, insurance sales, or real estate transactions involving licensed brokers or attorneys.

Preemption and Exemption

Provisions of the DTPA may be preempted by state or federal law, provided the statute expressly provides for preemption or it is implied by the regulation. The DTPA is also preempted by federal laws such as ERISA and the Airline Deregulation Act. Texas law exempts certain acts of health care providers and veterinarians from provisions of the DTPA.

DTPA Exemption: Publishers

Publishers of advertisements in regularly published newspapers are exempt from the DTPA, unless the newspaper has specific "knowledge of the false, deceptive, or misleading acts or practices" or had "a direct or substantial financial interest in the sale or distribution of the unlawfully advertised good or service." DTPA § 17.49(a).

Misrepresenting Contract Rights

Representing that an agreement confers or involves rights, remedies, or obligations which it does not have is prohibited. DTPA § 17.46(b)(12).

Misrepresenting Standard, Quality, Grade

Representing that goods or services are of a particular standard or quality, or that goods are of a particular style or model, if they are not is also prohibited. DTPA § 17.46(b)(7). The misrepresentation must be of a material fact. Opinions and "puffing" are not actionable statements under the DTPA. In determining whether a statement is actionable misrepresentation, courts examine the (i) statement's specificity, (ii) the relative knowledge of the subject matter as between the buyer and the seller, and (iii) whether the statement referred to a past or present condition or predicted a future condition. Kramer v. Hollmann, ___S.W. 3d___ (Tex. App. 2012).

Lending Money

Services" does not include the act of solely lending money. However, a consumer may maintain a DTPA claim against a lender who commits a DTPA violation in connection with a loan when the consumer's objective is to purchase a tangible good with money borrowed from the bank. Riverside Nat'l Bank v. Lewis, 603 S.W.2d 169 (Tex. 1980)

SErvices

Services" is defined as "work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods." DTPA § 17.45(2). It includes insurance policies and annuities and many other banking or financial services.

Self-Storage Facility Liens

Tenants are afforded protection from seizure of their property in self-storage facilities subject to a failure to pay rent. This Act permits a lien to be placed and enforced through either the courts or public auction, subject to the right of redemption by the tenant for unpaid fees. Proper notice and accounting for excess profit must be made by the provider. Tex. Prop. Code § 59.

Telephone Solicitations

Tex. Bus. & Com. Code § 302 permits certified entities (which post a surety bond) to use telephone solicitation, including automatic dialing, to contact consumers. Sellers engaging in telephone solicitation must obtain a registration certificate from the secretary of state.

Insurance Code

Texas Insurance Code Chapter 541 is liberally construed for protection against unfair methods of competition and unfair or deceptive acts or practices within the insurance industry. Tex. Ins. Code Ann. § 541.001. This chapter was enacted concurrently with the DTPA, and many of the provisions regarding the private cause of action granted, pre-suit notice requirement, and potential settlement offer defenses are essentially the same as in the DTPA. A qualifying consumer may bring a claim for damages under both the DTPA and Chapter 541.

Common Law Tort of Unreasonable Collection Efforts

Texas recognizes the common-law tort of wrongful or unreasonable collection efforts, which is defined as collection efforts that a person of ordinary care and prudence would not have used under the same or similar circumstances.Moore v. Savage, 359 S.W.2d 95 (Tex. Civ. App. 1962). This cause of action requires a showing of negligence.Id.

Lemon Law

The "Lemon Law" deals with new car warranty obligations. It provides that if the manufacturer is unable to correct a warranty defect that creates a serious safety hazard or substantially impairs the use or market value of the motor vehicle after a reasonable number of attempts, the consumer is to be given a comparable replacement vehicle, or permitted to return the vehicle and receive a refund of the purchase price (less reasonable allowance for use of the vehicle) and reimbursement of incidental expenses. Tex. Occ. Code § 2301.604.

Mere Breach of Contract Doctrine

The "mere breach of contract" cannot be a DTPA violation. This rule applies when the alleged misrepresentation is properly characterized as just a broken promise of performance. It does not apply when the defendant never intended to perform his promise when it was made. While not a true affirmative defense, the mere breach of contract doctrine is often used to defeat DTPA claims.

DTPA Exemptions: Real Estate Broker or Salesperson

The DTPA does not apply to a claim against a person licensed as a real estate broker or salesperson, arising from an act or omission by the person while acting as a broker or salesperson. Nor does it apply to the report of a professional real estate inspector. This exemption does not apply to: i) An express misrepresentation of material fact that cannot be characterized as advice, judgment, or opinion; ii) A failure to disclose information concerning goods or services which was known at the time of the transaction, if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed; or iii) An unconscionable action or course of action that cannot be characterized as advice, judgment or opinion.

Proper Defendant

The DTPA does not require that a consumer be in privity with the defendant, but the defendant's false, misleading, or deceptive act or practice must be committed "in connection with" the transaction at issue. The DTPA does not reach upstream manufacturers and suppliers when their misrepresentations are not made in connection with the relevant consumer transaction(s). Amstadt v. U.S. Brass, 919 S.W.2d 644 (Tex. 1996).

DTPA Exemptions: Personal Injury Claims

The DTPA now contains a general exemption for personal injury claims. However, two very broad exceptions to this exemption apply. DTPA § 17.49(e).

Remedies: Economic Damages

The DTPA provides recovery for "economic damages" for which conduct actionable under the DTPA was a producing cause. See § I.D.9. Economic Damages, supra. Recovery for economic damages does not require that the actionable conduct be committed "knowingly" or "intentionally."

Tie in Statutes

The DTPA provides redress for violations through other statutory legislative enactments or regulations that cross-reference the DTPA, considered "tie-in" statutes because they allow consumers to tie in to the more beneficial DTPA remedies. DTPA § 17.50(h). A violation of a tie-in statute is considered a violation of the DTPA. A non-exhaustive list of the most common DTPA tie-in statutes follows.

Remedies: Attorneys fees and costs

The DTPA provides that each prevailing consumer shall be awarded court costs and reasonable and necessary attorneys' fees. DTPA § 17.50(d). The award of attorney's fees is mandatory. It is not necessary that the consumer obtain a net recovery in order to prevail as long as the consumer is entitled to some relief under a DTPA claim.

Goods or Services

The DTPA requires that consumers purchase or lease "goods or services" in order to be protected under the statute.

Fed Fair Debt Collection Practices Act/ Standing

The FDCPA provides redress to a person against any debt collector who violates the FDCPA's standards of conduct for debt collection activities related to a debt. FDCPA §1692k

FDCPA/ Public Remedies

The FTC is empowered to investigate and bring enforcement actions against defendants within one year from the date of the alleged violation.

II.FEDERAL FAIR DEBT COLLECTION PRACTICES ACT

The Federal Fair Debt Collection Practices Act ("FDCPA") provides standards for the protection of any person against a "debt collector." The FDCPA does not preempt existing state laws regarding the conduct of debt collection activity except to the extent of a direct conflict with the FDCPA and then only to the extent of that conflict. A state law is not inconsistent if it provides greater protection to the consumer. FDCPA, 15 U.S.C. §1692n.

Insurance Code / Prohibited Practices: False Information and Advertising

The Insurance Code prohibits an advertisement, announcement, or statement containing an untrue, deceptive, or misleading representation regarding the insurance business. Tex. Ins. Code Ann. § 541.052.

Insurance Code / Prohibited Practices: Unfair discrimination in life insurance and annuity contracts

The Insurance Code prohibits disparate treatment by an insurer regarding individuals of the same class and equal life expectancy. Tex. Ins. Code Ann. §541.057.

Insurance Code / Prohibited Practices: Misrepresentation

The Insurance Code prohibits insurers from misrepresenting: i) The terms of the policy; ii) The benefits or advantages promised by the policy; iii) The dividends or share of surplus to be received by the policy; iv) Dividends or share of surplus previously paid on a similar policy; and/or v) The financial condition of an insurer or the legal reserve on which a life insurer operates. Insurers are also prohibited from using a name or title of a policy that misrepresents the true nature of the policy. Tex. Ins. Code Ann. § 541.051.

Insurance Code / Prohibited Practices: Prohibited Rebates and Inducements

The Insurance Code states that it is an unfair method of competition and deceptive practice to knowingly make, permit the making of, or offer to make an insurance contract, other than as plainly expressed in the issued contract. Similarly, it is prohibited to directly or indirectly pay, give, allow or offer to pay, give, allow (i) a rebate of premiums payable on the contract, (ii) a special favor or advantage, or (iii) valuable consideration or inducement not specific in the contract as inducement to enter into an insurance contract. The Code also prohibits the issuance or delivery or the permitting of an agent, officer, or employee to issue or deliver as an inducement to insurance: i) Company stock or other capital stock; ii) A benefit certificate or share in a corporation; iii) Securities; or iv) A special or advisory board contract or any other contract promising returns or profits.

Texas Debt Collection Act/ Standing

The TDCA provides redress for violations through both public criminal prosecutions and by private parties bringing suit in state court.A third party may assert an action for a violation of the TDCA.

Texas Business Opportunity Act

The Texas Business Opportunity Act provides standards for the protection against false, misleading, or deceptive practices in the advertising, offering for sale or lease, and sale or lease of business opportunities. Tex. Bus. & Com. Code Ann. §§ 51.001-51.303. For the Act to apply, the following must occur: i) A buyer purchases or leases $500 or more of products or services; ii) The seller promises a profit more than initial payment; and iii) The seller promises to provide assistance in the operation of the business, provide a sales, production, or marketing plan, or promise to buy back finished products. A significant exemption from the Business Opportunity Act is any arrangement classified classified as a "franchise" by federal law. as a "franchise" by federal law.

Texas Debt Collection Act

The Texas Debt Collection Act (see § III, infra) is set out in Tex. Fin. Code Ann. §§392.001 et seq. A violation of the TDCA is actionable under the DTPA.

Insurance Code / Prohibited Practices: Unfair settlement practices

The Texas Insurance Code prohibits the following unfair settlement practices in connection with first party insurance claims: i) Misrepresenting coverage to a claimant; ii) Failing to make in good faith an attempt to a prompt and equitable settlement once liability has become reasonably clear; iii) Failing to promptly provide to a policyholder a reasonable explanation of the basis in the policy for the insurer's denial of a claim or offer of a compromise settlement of a claim; iv) Failing within a reasonable time to affirm or deny coverage of a claim; v) Refusing to pay a claim without conducting a reasonable investigation; vi) Trying to enforce a full and final release of a claim from a policyholder when only partial payment has been made; vii) Delaying or refusing settlement of a claim solely because there is a different type of insurance available to satisfy all or part of the loss; and viii) Requiring a claimant as a condition of settling a claim to produce the claimant's federal income tax returns, unless: a) A court orders the claimant to produce those tax returns; b) The claim involves a fire loss; or c) The claim involves lost profits or income. The statute does not create a cause of action for third-party claims (i.e., claims against the liability insurance company for a tortfeasor). Tex. Ins. Code Ann. §541.060.

Texas Residential Construction Liability Act

The Texas Residential Construction Liability Act, Texas Property Code Chapter 27 ("RCLA") preempts the DTPA in connection with claims against builders for construction defects in residential construction projects to the extent of any conflicts. However, the RCLA is not a complete bar to the DTPA in these cases. In residential construction cases, the consumer's right to recovery under the DTPA will be limited as follows. 1) Limited recovery In cases governed by the RCLA, the consumer's recovery is limited to economic damages "proximately caused" by a construction defect and reasonable and necessary attorney's fees; there is no provision for the recovery of mental anguish or treble damages. RCLA § 27.004(g). 2) RCLA defenses In addition to any common-law defenses, the RCLA gives contractor defenses for (i) contributory negligence, (ii) third party negligence, (iii) failure to reasonably maintain the property, (iv) normal wear, tear, and deterioration, (v) normal shrinkage, and (vi) reasonable reliance on third party or governmental information. RCLA § 27.003. 3) More stringent notice and cure provisions The RCLA also modifies the written notice provisions, requiring more detail from the homeowner and providing the contractor with an opportunity to make a reasonable settlement offer to repair the alleged construction defect. RCLA § 27.004(a), (b).

Insurance Code/ Elements of a Private Cause of Action

The elements of the private cause of action under Chapter 541 are: i) The plaintiff is a "person"; ii) The defendant is a "person"; iii) The defendant committed either: a) A violation of Chapter 541, Subchapter B; or b) A violation of the DTPA laundry list (§ I.E.1, supra) on which the plaintiff relied to his detriment; or iv) The defendant's violation was a producing cause of actual damages to the plaintiff.

No Common Law Defenses to the DTPA

The general rule is that common law defenses like substantial performance, the parol evidence rule, and estoppel, do not apply to a DTPA cause of action. Smith v. Baldwin, 611 S.W.2d 611 (Tex. 1980).

Insurance Code/ Standing

The private cause of action in Chapter 541 is available to any "person." "Person" is broadly defined to include an individual, corporation, insurance company, or any entity engaged in the business of insurance. Tex. Ins. Code Ann. § 541.002(2).

Texas Business Opportunity Act/ Prohibitions and Requirements

The seller must: i) Register the opportunity with the secretary of state; ii) Post a surety bond; and iii) Provide a detailed written disclosure and contract to the buyer. The seller must not: i) Make false or untrue representations as to material facts to deceive the buyer or in a submission to the state; ii) Make a claim in advertising or promotional material, written or oral, that is inconsistent with the information required to be disclosed; or iii) Make potential earnings claims without sufficient proof.

Remedies/ Public Remedies

The state (envisioned in the Act as the Texas Attorney General) is empowered to investigate and bring criminal actions against defendants. A conviction under the TDCA is punishable as a misdemeanor and a fine of between $100 and $500. TDCA § 392.402. All criminal actions must be filed within one year of the violation.

Tie in Statutes

Tie-in statutes are Texas statutes which provide that a violation of the statute is actionable under the provisions of the DTPA,

DTPA/ Proper Plaintiff

To qualify for relief under the DTPA, the plaintiff must meet the definition of "consumer." A "consumer" is a generally described as a person or entity that "seeks or acquires by purchase or lease, any goods or services." DTPA § 17.45(4). There are exceptions and exemptions to this definition, which are described below.

DTPA Exemptions: Transactions Over 500,000

Transactions over $500,000 generally are not covered by the DTPA, unless the transaction involves the consumer's residence.

Unconscionable action or course of action

Unconscionable action or course of action is conduct that takes advantage of the consumer's lack of knowledge, ability, experience, or capacity to a grossly unfair degree. Gross unfairness must be glaring, noticeable, flagrant, complete, and unmitigated. The unconscionability of an act is determined at the time of sale. Knowledge and intent of the defendant are not required. Unconscionability does not require reliance. DTPA § 17.50 (a)(3). Bever Properties, L.L.C. v. Jerry Huffman Custom Builder, L.L.C., 355 S.W.3d 878 (Tex. App.—Dallas 2011).

Insurance Code Chapter 542: Prompt Payment of Claims

Under Insurance Code Chapter 542, an insurer generally has within 15 days after receipt of a claim to begin an investigation, and 15 business days after receipt of all necessary information and documentation to accept or reject it. Any payment must be made within five business days of acceptance of the claim. Failure to make a payment within 60 days of the receipt of the claim (without notice of acceptance or rejection) will subject the insurer to a private cause of action for a penalty of 18% per year of the amount of the claim and attorney's fees. This is in addition to any claim for the policy benefits under traditional contract principles and any recovery for violations of Chapter 541 or of the DTPA.

Insurance Company's Common Law Duties: Duty of Good Faith and Fair Dealing ("Bad Faith")

Under common law, an insurer owes a duty of good faith and fair dealing to its insured. A breach—commonly referred to as "bad faith"—generally occurs when an insurer fails to settle a claim when its liability has become reasonably clear. The duty of good faith extends only to a first-party insured and not to third-party claimants under a liability policy.

FDCPA/ Third- Party Communications

Under section 1692b, a debt collector is generally restricted from contacting third-party individuals for the purposes of collecting a debt without the consent of the consumer. The debt collector may, however, contact third parties to obtain location information concerning the consumer or with the prior consent of the consumer or express permission of the court, but the debt collector must comply with the following principles: a. Must properly identify himself The debt collector must identify herself, state that she is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify her employer. b. Must not give certain information The debt collector may not state that consumer owes any debt. c. Must not use certain language A debt collector may not use any language or symbol on any envelope or in the contents of any communication that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt, including not communicating via postcard. d. Not communicate with any person more than once If the person contacted requests to be contacted more than once, or if the debt collector has reason to believe that information given by the person previously was false or incomplete, then the debt collector may contact the person more than once. e. No communication if represented by counsel A debt collector may not communicate with anyone once the debt collector knows that the consumer is represented by an attorney. f. Post judgment remedy exception A debt collector may contact third parties if reasonably necessary to effectuate a post-judgment remedy.

FDCPA/ Private Remedies

Under the FDCPA, a consumer can bring suit for the following under section 1692k(a). a. Actual damages Any actual damages are allowed, with no minimum recovery on class actions. b. Civil penalty For individual actions, a civil penalty of up to $1,000 per case may be awarded; the amount depends on whether the violation was intentional or persistent. For class actions, the civil penalty can be for up to $500,000, or one percent of the net worth of the debt collector, whichever is less. c. Attorneys' fees Mandatory attorneys' fees are allowed if the plaintiff wins; however, the amount of attorneys' fees is discretionary. 3. Frivolous Suits If the court determines that a lawsuit brought under FDCPA is based on bad faith and for the purposes of harassment, then the court may award the defendant reasonable attorneys' fees. FDCPA § 1692k(a)(3). 4. Venue Legal proceedings for the collection of a debt must occur either in the judicial district where the real property is located, where the consumer signed the contract at issue, where the consumer resides, or at another location upon agreement of the parties. FDCPA § 1692i(a).

Insurance Code Remedies: Class Action

Under the Insurance Code, a class action may be brought by the state or private individuals (if not preempted by the state), under certain conditions similar to class actions under Tex. R. Civ. P. 42.

Health Spa Act

Under the provisions of Tex. Occ. Code § 702, protection is given to individuals who purchase memberships in "health clubs" or "health spas," not private clubs that are member-operated. Such clubs must: i) Be registered with the state; ii) Obtain a surety bond; iii) Escrow membership fees; iv) Permit customers to cancel within three days of acceptance; v) Permit customers to cancel if a specific club location closes; vi) Provide a list of membership plans and discounts; vii) Provide truthful information as to the quality of the club and staff; and viii) Explain membership rights and the contract.

Geographic Origin

Using deceptive representations as to geographic origin in relation to goods or services is prohibited. DTPA § 17.46(b)(4).

Violations of Insurance Code 541

Violations of Chapter 541 of the Insurance Code involving unfair methods of competition and unfair or deceptive acts must be established by means other than the DTPA. Much like breach of warranty claims, once a violation has been established, it is actionable under the DTPA.

FDCPA/ Communication with debtor in certain manners

b. Consumer represented by attorney The debt collector may not contact a consumer if it is known to the debt collector that the consumer is represented by an attorney, unless the attorney consents. FDCPA § 1692c(a)(2). c. Consumer's place of employment A debt collector may not contact the consumer at the consumer's place of employment once the debt collector knows that the employer objects. FDCPA §1692c(a)(3).

Common law implied warranties/ Implied waranty of good and workmanlike performance of services

for repair or modification of existing tangible goods (excluding professional services). Melody Homes v. Barnes, 741 S.W.2d 349 (Tex. 1987); and

Laundry List Violation

he DTPA contains what is commonly referred to as a "laundry list" of 27 prohibited practices. DTPA § 17.46(b). For DTPA claims brought for a violation of a laundry list provision, the consumer must also show that he relied on the defendant's violative conduct to his detriment. Although there is a requirement of reliance, there is no requirement of intent, privity, or knowledge for a violation of the laundry list to be actionable, unless required by the specific subsection. This is a substantial difference from common-law fraud.

Remedies: Public Remedies

he DTPA provides for redress for violations through both public enforcement (through the Consumer Protection Division of the Texas Attorney General's Office as well as through cooperation with local District or County Attorneys) and a private right for a consumer to seek redress for violations. DTPA § 17.48. The state may conduct an investigation and compel discovery. DTPA § 17.61. Failure to comply with a state investigation through the destruction of evidence is subject to a misdemeanor conviction punishable by confinement of up to one year in jail or a fine of up to $5,000, or both. DTPA § 17.62. The state may request penalties, which can include: i) An injunction or restraining order (temporary or permanent); ii) A general penalty of not more than $20,000 per violation; iii) A specific penalty (not more than $250,000 if the unlawful practice targeted an individual over 65 years of age); and iv) Forfeiture of property or receivership for failure to pay restitution. DTPA § 17.47.

Fed Fair Debt Collection Practices Act/ NOT Debt Collector

i) An officer or employee of a creditor; ii) A legal process server; iii) A nonprofit debt counseling service; iv) A bona fide fiduciary; and v) An official of the government acting in an official capacity.

Implied Warranty of MErchantability

i) Implied warranty of merchantability, which is most commonly defined as fit for the ordinary purpose for which such goods are used. The seller must be a "merchant." In Texas, the implied warranty of merchantability does not apply to used goods if the purchaser knows they are used. Valley Datsun v. Martinez, 578 S.W.2d 485 (Tex. Civ. App. Corpus Christi 1979); Chaq Oil Co. v. Gardner Machinery Corp., 500 S.W.2d 877 (Tex. Civ. App. Houston 14th Dist. 1973);

Implied Warrant for Fitness for a particular purpose

ii) Implied warranty of fitness for a particular purpose, which arises when (a) the seller has reason to know the buyer's particular purpose for the goods and that the buyer is relying on the seller's judgment, and (b) the buyer in fact relies on the seller's skill or judgment to select suitable goods; and

Common Law implied Warranties/ Implied warranty of suitabilty

in commercial leaseholds;

Common law Implied Warranty: Implied warranty of good workmanlike construction and habitability

in the sale of a new home. Humber v. Morton, 426 S.W.2d 554 (Tex. 1968).

Texas Deceptive Trade Practices Act

provides for the protection of consumers against various false, misleading, and deceptive business practices, and is the most important consumer protection statute in the state. The DTPA also provides "efficient and economical procedures to secure such protection." DTPA §§ 17.41, 17.44, 17.46. The DTPA grants a private cause of action to a "consumer" for damages caused by false, misleading, and deceptive conduct and breaches of warranties, including a mandatory award of attorney's fees, as an alternative to common-law remedies like fraud and breach of contract. The DTPA also provides for a discretionary award of treble damages for conduct committed knowingly or intentionally.

DTPA Exemptions: Professional Service Providers

rofessional services—when the essence of the service involves the giving of professional advice, opinion, or judgment, by professionals including but not limited to architects, attorneys, certified public accountants, insurance companies, real estate brokers, salespersons, inspectors, and surveyors—are generally exempt from the DTPA, with the following exceptions: i) Express misrepresentations of material fact; ii) Failure to disclose information; iii) Unconscionable acts or courses of action; and iv) Breaches of express warranties.