Who is a consumer under DTPA?

Protecting Consumers with the Texas Deceptive Trade Practices Act (DTPA)

Consumers in Texas are protected against deceptive business practices under the Texas Deceptive Trade Practices Act (DTPA). This act is designed to protect consumers from misleading or false business practices, as well as breaches of warranty. Attorneys G.R. (Randy) Akin and Greg Burton of Longview, TX, have been representing clients in personal injury claims and business litigation for decades and can apply their legal acuity to your case, so you can collect the damages you are due under the DTPA. If you believe you have a claim that falls under the DTPA, contact our firm today to discuss your legal options.

An Overview of the DTPA

The purpose of the DTPA is to protect consumers against false, misleading, and deceptive business practices. Set out in Chapter 17 of the Texas Business and Commerce Code, the DTPA defines a consumer as someone who seeks or acquires services or goods via purchase or lease. This can include individuals and extend to certain partnerships and corporations. The law is intended to be applied liberally and to provide an efficient and economical way to enforce justice after a violation.

Unlawful Acts under the DTPA

Consumers are protected from a number of fraudulent acts deemed unlawful by the DTPA. These acts are divided into three categories:

• Breach of Warranty (either written or verbal): This designation refers to the failure of a seller to fulfill the claims they made regarding a product.
• Unconscionable Acts: The DTPA characterizes an unconscionable act as one that is overwhelmingly one-sided. If, for example, a seller takes advantage of a consumer’s lack of knowledge or experience to a grossly unfair degree, this would be deemed an unconscionable act.
• False, Misleading or Deceptive Act: This comprehensive list of actions taken on the part of a company includes misrepresenting the source or certification of goods or services, as well as taking advantage of customers during a disaster.

Proving a DTPA Claim

Good intent is not a defense under the DTPA. In other words, defendants can be held liable even if they did not intend to misrepresent the product to the consumer. This is different than other types of fraud claims, in which the plaintiff must prove that the defendant knew that the representations were in some way false, or were made recklessly.

To prove and win a DTPA case, we must show:

1. The plaintiff was a consumer
2. The defendant engaged in conduct prohibited by DTPA
3. The prohibited conduct caused economic and mental damages to the plaintiff

Defendants can be held liable even if they did not intentionally mislead the consumer.

What to Expect

If you have experienced a violation under the DTPA, it is important to retain counsel to ensure you are compensated fairly. Your lawyer will first inform the seller of the nature of the dispute in a written notice. This notification is a prerequisite to filing a lawsuit. If the seller does not comply with your request within the designated time frame, your lawyer can file a suit on your behalf. The at-fault party may be held accountable for deceptive practices by way of:

• A court-ordered injunction
• A restoration order
• Revocation of their business license
• Damages to you covering any monetary and emotional losses
• Recovery for any legal fees
• Additional damages if the seller acted intentionally or knowingly

We will pursue all avenues to protect your rights as a consumer.

Secure the Legal Counsel You Need

A company that has caused you harm as a result of misrepresentation should be held accountable. Our attorneys, Mr. Akin and Mr. Burton, will advocate tirelessly on your behalf to help you achieve justice. We encourage you to schedule a consultation by calling us at (903) 297-8929, or by contacting us online.

The DTPA in Texas

Texas law prohibits businesses from engaging in deceptive trade practices. The Deceptive Trade Practices-Consumer Protection Act (“DTPA”), enacted in 1973 and codified in the Texas Business and Commerce Code, outlines those business practices that are deceptive and provides consumers with a remedial scheme to protect their interests. The DTPA’s overarching purposes are: (1) to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty, and (2) to provide efficient and economical procedures to secure such protection.[1]

Elements of a DTPA Claim

Generally, to prevail on a DTPA claim, plaintiffs must establish three elements:

• The plaintiff is a consumer;
• The defendant engaged in false, misleading, or deceptive acts; and
• The acts were a producing cause of the consumer’s damages.[2]

According to the DTPA, a “consumer” is defined as an individual, partnership, corporation, the state of Texas, or a subdivision or agency of the state of Texas who seeks or acquires by purchase or lease, any goods or services.[3] However, the term “consumer” specifically excludes a business consumer that has assets of $25 million or more or that is owned or controlled by a corporation or entity with assets of $25 million or more.[4]

False, Misleading, or Deceptive Acts

A consumer may maintain an action where any of the following constitute a producing cause of economic damages or damages for mental anguish:

• The use or employment by any person of a false, misleading, or deceptive act or practice that is:
  • specifically described in Subsection (b) of Tex. Bus. & Com. Code § 17.46; and
  • relied on by a consumer to the consumer’s detriment;
• Breach of an express or implied warranty;
• Any unconscionable action or course of action by any person; or
• The use or employment by any person of an act or practice in violation of Chapter 541 of the Insurance Code.[5]

Often, plaintiffs will pursue DTPA claims based one or more acts described in Tex. Bus. & Com. Code § 17.46(b). Those acts include:

• passing off goods or services as those of another;
• causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another;
• representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which the person does not;
• representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand;
• representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another;
• advertising goods or services with intent not to sell them as advertised;
• representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law;
• failing 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;
• using the term “corporation,” “incorporated,” or an abbreviation of either of those terms in the name of a business entity that is not incorporated under the laws of this state or another jurisdiction.[6]

Remedies and Relief for Consumers

Consumers may be entitled to various forms of relief by bringing a DTPA lawsuit. First, a consumer may be entitled to economic damages determined by the court.[7] Second, if the court determines that the defendant “knowingly” committed the false, misleading, or deceptive acts, the plaintiff may be entitled to up to three times its economic damages in addition to damages for mental anguish. If the court determines the defendant acted “intentionally,” the plaintiff may also be entitled to up to three times its damages for mental anguish.[8] Third, a consumer who prevails on a DTPA claim is entitled to court costs and reasonable and necessary attorneys’ fees.[9] Additionally, while a consumer has other available forms of relief (e.g., injunctive relief), Subsection (h) provides another avenue of recovery. Specifically, if a consumer is granted the right to bring a cause of action under the DTPA by another law, the consumer may recover actual damages, without regard to whether the defendant’s conduct was committed intentionally.[10]

Defenses

Defendants also have a number of defenses to DTPA claims, including:

• The plaintiff is not a consumer under the DTPA;
• The consumer failed to give sufficient written notice to the defendant at least 60 days before filing suit for damages under Section 17.50(b)(1);[11]
• Before the consummation of the transaction, the defendant gave reasonable and timely written notice to the plaintiff of the defendant’s reliance on:
  • written information relating to the particular goods or service in question obtained from official government records if the written information was false or inaccurate and the defendant did not know and could not reasonably have known of the falsity or inaccuracy of the information;
  • written information relating to the particular goods or service in question obtained from another source if the information was false or inaccurate and the defendant did not know and could not reasonably have known of the falsity or inaccuracy of the information; or
  • written information concerning a test required or prescribed by a government agency if the information from the test was false or inaccurate and the defendant did not know and could not reasonably have known of the falsity or inaccuracy of the information;[12]
• The defendant proves that it received written notice from the consumer and within 30 days after receiving notice tendered to the consumer the claimed economic damages, mental anguish damages, expenses, and reasonable attorneys’ fees;[13] and
• The court finds that the consumer’s DTPA claim was groundless in fact or law or brought in bad faith or brought for the purpose of harassment.[14] This finding entitles the defendant to court costs and reasonable and necessary attorneys’ fees.

That last defense should give plaintiffs/consumers pause before bringing a DTPA lawsuit against a business. In my practice (when representing the business), the consumers’ DTPA claims have failed primarily because: (1) the DTPA claims were groundless, or (2) the consumer was not able to show how the defendant’s alleged deceptive acts were a producing cause of the consumer’s damages.

Expert Attorneys

Need help with consumer or business defense issues? Contact us as soon as possible to discuss your rights and the ways we can assist in your case. We handle all types of cases, including Texas DTPA cases. Schedule a Consultation Today!

[1] Tex. Bus. & Com. Code § 17.44(a).

[2] See Doe v. Boys Club of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995).

[3] See Tex. Bus. & Com. Code § 17.45(4).

[4] Id.

[5] See Tex. Bus. & Com. Code § 17.50(a).

[6] Tex. Bus. & Com. Code § 17.46(b)(1), (3), (5)-(7), (9), (12), (24)-(25).

[7] See Tex. Bus. & Com. Code § 17.50(b)(1).

[8] Id.

[9] See Tex. Bus. & Com. Code § 17.50(d).

[10] See Tex. Bus. & Com. Code § 17.50(h).

[11] See Tex. Bus. & Com. Code § 17.505(a), (c), (d).

[12] See Tex. Bus. & Com. Code § 17.506(a).

[13] See Tex. Bus. & Com. Code § 17.506(d).

[14] See Tex. Bus. & Com. Code § 17.50(c).

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