Deceptive Trade Practices Act
Among the areas where businesses are increasingly vulnerable to litigation is the area of consumer protection statutes. One such statute is the Texas Deceptive Trade Practices and Consumer Protection Act, more commonly known as the Deceptive Trade Practices Act (“DTPA”).
Deceptive Trade and Practices Act
The Deceptive Trade Practices Act was initially enacted to 1) provide consumers with a cause of action for deceptive trade practices without the burden of proof and numerous defenses encountered in common-law fraud or breach of warranty suits; 2) encourage consumers to litigate claims that would not otherwise be economically feasible by permitting a successful plaintiff to recover attorney’s fees; and 3) to deter false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty in trade or commerce.
The Deceptive Trade Practices Act applies to trade and commerce which is defined in the Act as advertising, offering for sale, sale, lease, or distribution of any good or service, of any property, tangible or intangible, real, personal, or mixed, and any other article, commodity, or thing of value, wherever situated, and shall include any trade or commerce directly or indirectly affecting the people of Texas.
This expansive definition promotes broad applicability of the Deceptive Trade Practices Act against unscrupulous businesses. Unfortunately, this consumer-oriented law can be used as a powerful weapon by consumers against legitimate companies. To avoid DTPA liability, it is essential to have a basic understanding of the Deceptive Trade Practices Act, the conduct that can lead to liability, and steps that can be taken to minimize the risk of being sued. Chalaki Law, P.C. has that understanding.
On the Consumer side: An individual “seeks” goods or services when he or she requests or asks for them. One “acquires” goods or services when one gets or comes to have the goods or services as one’s own. The DTPA does not require a plaintiff to be a direct purchaser of the good or service, as long as the plaintiff is the beneficiary of those goods or services.
There are two basic requirements for an individual or business to qualify as a consumer under the Deceptive Trade Practices Act (DTPA) : 1) the consumer must have sought or acquired, by purchase or lease, goods or services; and 2) the acquired goods or services must form the basis of the complaint. The DTPA, however, does not apply to business consumers that have assets of $25 million or more, or that are owned or controlled by a corporation or entity with assets of $25 million or more.
Consumer status can also be established merely by seeking to acquire goods or services, even if they are not actually acquired. It is unnecessary for money to change hands to establish consumer status. It is also unnecessary for there to have been a written agreement or an actual purchase; it is sufficient for the plaintiff to seek to acquire goods or services in good faith.
DTPA claims are generally not assignable by an aggrieved consumer to someone else. The Act also authorizes actions by the Consumer Protection Division of the Texas Attorney General’s office in addition the provides a private civil remedy to consumers for deceptive trade practices that are a producing cause of economic and mental anguish damages to the consumer.
Our attorneys work both on the consumer side, representing Plaintiff against businesses who have violated the DTPA statute and representing business as Defendants being sued for DTPA. Our experience has proven that these lawsuits are complicated in nature and require an extensive understanding of each situation.