Consumer Law

Question 1

Deceptive Trade Practice Act (DTPA)

Answer 1

shall be liberally construed and applied to support its underlying purpose, which is to “protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.”

consumer may maintain an action where any of the following constitute a producing cause of economic damages/mental anguish, and such conduct occurred in connection with the transaction:

(1) the “laundry list” of 31 acts
(2) breach of warranty
(3) any unconscionable act that consumer relied to his detriment

Question 2

professional services (DTPA)

Answer 2

DTPA does not apply to a professional providing advice, judgment, opinion, or similar professional skill

Question 3

DTPA notice

Answer 3

Consumer must give D written notice of the specific complaint and amount of damages at least 60 days before filing suit, otherwise D may move to abate the proceeding to allow notice

Question 4

consumer (DTPA)

Answer 4

entity who seeks or acquires, by purchase or lease, any good or service (includes businesses with under $25M in assets)

Question 5

Violation of Laundry List (DTPA)

Answer 5

31 acts and practices that are deemed prima facie false, deceptive, or misleading

Consumer must show: (1) conduct occurred in connection with the practice; and (2) he relied on the misrepresentation to his detriment

Question 6

Warranties (DTPA)

Answer 6

DTPA does not create any warranties, so any warranty must be established independent of the DTPA

Consumer must show: (1) warranty formed outside of DTPA (express or implied); (2) it was not disclaimed; and (3) consumer is a proper entity to assert the claim

Question 7

implied warranty of merchantability

Answer 7

applies when merchant deals in goods of the kind. Warrants goods are fit for the ordinary purpose for which they are used and will pass without objection in the trade

Question 8

express warranty

Answer 8

affirmation of fact or promise made by the seller to the buyer that becomes part of the basis of the bargain

Question 9

Warranty disclaimer

Answer 9

can disclaim only implied warranties, and must be conspicuous

Question 10

Warranty waiver

Answer 10

enforceable if (1) signed by the consumer; and (2) consumer was represented by an attorney

Question 11

unconscionable conduct

Answer 11

conduct that, to consumer’s detriment, takes advantage of his lack of knowledge, ability, experience, or capacity to a grossly unfair advantage

grossly unfair: glaringly noticeable, flagrant, and unmitigated

Question 12

remedies (DTPA)

Answer 12

includes restitution and equitable remedies (including injunctive relief)

Question 13

economic damages

Answer 13

compensatory damages for pecuniary loss, including all direct and consequential economic loss

Question 14

mental anguish (DTPA)

Answer 14

only if conduct was committed knowingly and consumer shows a relatively high degree of mental pain and distress, more than mere disappointment, anger, resentment, or embarrassment, causing a substantial disruption in the consumer’s daily routine

Question 15

knowingly (DTPA)

Answer 15

actual awareness of falsity, deception, or unfairness of the act giving rise to the consumer’s claim

Question 16

intentionally (DTPA)

Answer 16

actual awareness of falsity, deception, or unfairness of the act giving rise to the consumer’s claim
AND
specific intent that the customer act in detrimental reliance

Question 17

Treble damages

Answer 17

only if conduct was committed knowingly or intentionally.

If knowingly -> award 3X economic damages + mental anguish

if intentionally -> award 3X economic damages + 3X mental anguish

Question 18

Fees (DTPA)

Answer 18

prevailing plaintiff is entitled to reasonable attorney’s fees and court costs

Question 19

Texas Debt Collection Act (TDCA)

Answer 19

designed to protect consumers from wrongful debt collection practices, and applies to ANY entity collecting a consumer debt.

Prohibits:

(1) coercion,
(2) harassment or abuse,
(3) unfair and unconscionable conduct, and
(4) fraudulent, deceptive, and misleading representations.

Must be in the exclusive list for TDCA.

Question 20

Plaintiffs (TDCA)

Answer 20

ANY person (consumer or not) has a cause of action if suffering damages as a result of violation of any of the list of practices within the Act

Question 21

Damages (TDCA)

Answer 21

actual damages (economic and mental anguish), equitable relief, and fees

Question 22

Tie-in statute (DTPA)

Answer 22

Violation of the tie-in statute’s provisions is actionable under the DTPA (but Plaintiff must be a consumer under DTPA). Thus, if acting knowingly, may recover three times actual damage when claim is brought through tie-in statute.

Includes: TDCA; Insurance Code; Health Spa Act

Question 23

Federal Debt Collection Act (FDCA)

Answer 23

federal law aimed to eliminate abusive debt collection practices by debt collectors. Applies only to consumer debt (obligation primarily for personal, family, or household purposes and arising from a transaction)

narrower than TDCA because it only applies to third party collectors

covers any conduct that is harassing, abusive, false, misleading, or unfair.

Question 24

Debt Collector (FDCA)

Answer 24

anyone in the business of debt collection or anyone who regularly collects debts owed to another (only third party debt collectors). Includes debt collection agencies and attorneys acting on behalf of themselves/clients.

Question 25

Damages (FDCA)

Answer 25

similar to damages under TDCA. There is a statutory cap of $1,000 and attorney’s fees

Question 26

Health Spa Act

Answer 26

member may file suit against a seller, defined as a person who owns, operates, or sells rights to use health spa’s services or facilities

violation of this act is actionable under DTPA (tie-in statute)

Damages: actual damages (economic and mental anguish), equitable relief, punitive damages, and fees

Question 27

Insurance Code

Answer 27

prohibits unfair methods of competition and unfair or deceptive acts in the business of insurance.

Duty of good faith and fair dealing: breached if fails to attempt to effectuate a prompt, fair, and equitable settlement of insured if knew or should’ve known it was reasonably clear the claim was covered.

Ex: misrepresentation regarding existence or terms of a policy, unfair claim settlement practices, any laundry list violation

Damages: actual damages (Economic and mental anguish), equitable relief, and fees

Tie-in statute to DTPA

Question 28

Prompt payment act

Answer 28

promptly review and accept or deny a claim (15-30 days)

Damages: 18% on any recovery if: (1) consumer had a claim under the policy; (2) insurer is liable for the claim; and (3) insurer failed to comply with statutory time requirements

Question 29

specific FDCA conduct

Answer 29

(1) inconvenient time (9pm-8am)
(2 validation notice (written notice with creditors name, amount of debt, and notice of 30 days to dispute)
(3) improper communication (only contact 3d party for location information and must be discreet)
(4) threatening arrest for failure to pay debt
(5) cannot harass, oppress, abuse, use profane language

Question 30

threats or coercive conduct (TDCA)

Answer 30

(1) using/threatening violence to cause harm to person/property;
(2) falsely accusing a person of fraud or another crime;
(3) threatening arrest for non payment;
(4) threatening charge, complaint, or criminal action against debtor who has not violated any law;
(5) threatening to take action prohibited by law

Unlike FDCA, this is an exclusive list

Question 31

Abusive Conduct (TDCA)

Answer 31

(1) telephone calls within naming self with intent to annoy, harass, or threaten a person;
(2) making repeated/continuous calls with intent to harass a person

Unlike FDCA, this is an exclusive list