Consumer Law Flashcards
Preamble
Deceptive Trade Practices Act protects the consumer’s rights in TX
List Damages Under Tie-In
1) knowingly UP (3 x AD)
2) there are 3 separate clams
3) pure debt collection laim
4) DTPA tie-in claim
Exceptions to DTPA Liability
1) Business consumers
2) large trans
3) newspaper advertisements pub w/out knowledge
4) professional services
5) PI
Damages Available in DTPA Action
1) C prevails jury award economic damages
2) D acted knowingly 2 x economic damages
a) mental anguish ( 3 x econ) + MA
3) D acted intentionally
b) economic damages
c) MA damages
d) additional damages (3 x eco) + (3 x MA)
e) equitable relief and injunctive relief
Test for Consumer Status of Person who Didn’t Purchase Good or Services
1) good faith
2) intent/ability to purchase
Express Warrantees
1) representation of seller
2) affirmation of fact or promise
3) relating to goods
4) basis of bargain
Penalties Under TX Debt Collection Act
1) $100 - $500 per violation (crim misd)
2) actual damages
3) injunctive relief
4) attys fees
5) $100 for each violation (limited)
6) consumer recover under DTPA tie-in
List Tie-In Statutes & Relationship to DTPA
1) regulates
2) false
3) misleading acts
4) in connection with _____.
5) actual instead of economic
DTPA Unconscionably Def
1) act or practice
2) consumers detriment
3) advantage of lack of knowledge/ability/capacity/experience
4) to a grossly unfair degree
5) at time of transaction
Types of Acts on Laundry List
1) general misrepresentation
2) misrepresentation about legal rights
3) failure to disclose
Duty of Good Faith Def
1) insurer has duty to exercise
2) good faith and fair dealing
3) w/ respect to insured
Most Common Violations of Insurance Code Ch 541
1) misrepresentation and false advertising of policy Ks
2) defamation of competitor
3) unfair discrimination
4) unfair settlement practices
Conduct that Violates Unfair Claim Settlement Practices Act
1) insurer respond w/in 15 days if primary
2) or 30 days if surplus
3) accept or reject claim 15 days
4) don’t reject, extend up to 45 days
5) payment prompt
4 Claims Under DTPA
1) false, misleading or deceptive practice on LL + ruled on to consumers detriment
2) breach express/implied warranty
3) unconscionable action
4) violation of ch 541 insurance code + producing cause of mental anguish or economic damages
“Consumer” Def
1) individual, partner, corp, this state
2) or subdivision or agency of this state
3) whoo seeks or acquired
4) by purchase or lease
5) any good or services
6) except business cons of $25 million +
Conduct Violations of TDCA
1) threat
2) coercion
3) harassment/abuse
4) unfair/unconscionable conduct
5) fraudulent/deceptive/misleading representations
Conduct Prohibited Under FDCA
1) harassment/abuse
2) false/misleading representations
Communications Prohibited w/ Debtor Under FDCA
1) time and place restrictions (8-9)
2) can talk once has atty
3) can’t call at work once told
Producing Cause Def
1) efficient/exciting/contribution
2) natural consequence
3) produced injuries/damages
4) substantial factor
5) would not have occurs but for
Req Before Filing DTPA Suit
1) notice to D
2) 60 days before
3) complaint damages
4) attys fees
DTPA Action Defenses
1) negation of producing cause
2) mediation/arbitration clause
3) statute of limitations (2)
List Implied Warranties
1) UCC warranties
2) implied warranty of suitability in commercial leaseholds
3) implied warranty of good and workmanlike performance
4) implied warranty of habitability
Consumer Standing
1) Under the DTPA, to satisfy standing as a “consumer” a person must:
a) seek or acquire goods or services by purchase or lease
b) goods or services acquired must form the basis of the complain
2) Issues
a) privity is not required
b) intended beneficiary: a 3P beneficiary may qualify as a consumer of goods or services as long as the transaction was specifically req by or intended to benefit the 3P and the good or service was rendered to benefit the 3P
DTPA 4 x 4 Rights —- 1) LL Violations
LL violations: “LL misrepresentations are specifically enumerated in the DTPA; the consumer has to show reliance on the misrepresentation”
a) misrepresenting that an agreement confers or involves rights, remedies, or obligations that it doesn't have b) failing to disclose information concerning goods or services that was known at the time of the transaction IF failure to disclose the information was intended to induce the consumer into a transaction into which the consumer otherwise would not have entered into
DTPA 4 x 4 Rights — 2) Breach of Warranty
“Under DTPA, consumer has the ability to sue for breach of express or implied warranty. however, the DTPA does not define “warranty” and warranty must be established outside of the DTPA
DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Express Warranty”
1) affirmation of fact or promise that forms in part the basis of the bargain
a) ie descriptions, samples or models
b) also applies to services
DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Implied Warranty of Merchantability”
1) implied warranty of merchantability: requires a merchant (a person who deals in goods of the kind) and determinations if product is fir for its ordinary purpose;
2) case law in TX holds that IWM applies to used goods is the P proved the defect was present at the time the good was manufactured.
DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Implied Warranty of Fitness for a Particular Purpose”
1) seller knows buyers particular needs and seller knows buyer is relying upon sellers judgement
DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Implied Service Warranties”
1) implied warranty of good and workmanlike repair or modification of existing tangible goods
DTPA 4 x 4 Rights —- 3) “Unconscionability”
1) an act that to consumers detriment takes advantage of lack of knowledge, ability, experience of consumer to a “grossly unfair degree”
DTPA 4 x 4 Rights —- 4) Insurance Code
1) “here, the insurance code does not apply”
2) “an insurance code violation can be brought through the DTPA and those violations have been covered above”
Causation: Producing Cause
1) DTPA requires that the deceptive act or practice must be a producing cause of economic or damages for mental anguish
2) producing cause is cause in fact: a DTPA P does not have to rove foreseeability
Remedies —- 1) Economic Damages
1) compensatory damages for pecuniary loss.
2) specifically excluded are non-economic damages like pain and suffering, loss of consortium, disfigurement, physical impairments, etc
3) “consumer would have to bring another cause of action to recover for such things as pain and suffering”
Remedies —- 2) Mental Anguish
1) requires a predicate finding of knowingly (D actual awareness of deceptive act or conduct)
2) P must show by direct evidence a “substantial disruptor of daily routine”
Remedies —- 3) Additional Damages
1) discretionary damages determines by fact finder
2) “knowingly”: Ds actual awareness of deceptive act or conduct; cannot be higher than 3 times Ps economic damages
3) “intentionally”: Ds actual awareness couples w/ specific intent that the consumer act in detrimental reliance on the falsity or deception; cannot be more than 3 times Ps economic damages and mental anguish damages
Remedies —- 4) Attys Fees
1) if a consumer prevails, then the consumer shall be awarded reasonable attys fees and costs
DTPA Defenses —- 1) DTPA Waiver Req
1) generally unenforceable
2) requirements:
a) in writing and signed by the consumer
b) consumer cannot be in significantly disparate bargaining position; and
c) consumer is represented by legal counsel
DTPA Defenses —- 1) DTPA Waiver Form
1) conspicuous and in bold-face type of at least 10 point font in size;
2) heading “Waiver of Consumer Rights, “ or words of similar meaning; and
3) in substantially the following form: “I waive my rights under the DTPA, Section 17.41, a law that gives consumers special rights and protections. after consultation with an atty of my own selection, I voluntarily consent to this waiver
DTPA Defenses —- 2) DTPA Notice
1) pre-suit notice is req 60 days before filing suit under the DTPA; consumer must state “specific complain” and amount of economic damages, mental anguish, and attys fees
2) if notice isnt given, then D can file a motion for abatement w/in 30 days of filing its answer
DTPA Defenses —- 3) Disclaimer of Warranties
1) “express warranties”: consider whether the EW and the words negating the EW can be reasonable construed together; if not the “negation” is “inoperative”
2) “implied warranties”: “as is” clause can disclaim IW as long as disclaimer is conspicuous and buyer was given opportunity to inspect and inspection would have revealed the defect
3) “consciousness” test: whether attention can be reasonable be expected to be called to the disclaimer, ie printed heading in all capitals
4) the rest of DTPA is affected by disclaimer of warranty
DTPA Defenses —- 4) Professional Exemption
1) “DTPA does not apply to professional services
2) “professional services”: ‘the essence of which is the providing of advice, judgment, opinion, or similar professional skill’
3) exceptions to the exemption (which brings D back into DTPA)
a) express misrepresentation of a material fact
b) an unconscionable act
c) an express warranty, providing none of which can be characterized as advice, judgment, or opinion
d) LL failure to disclose info to induce agreement
DTPA Non-Monetary Remedies
1) “Status Quo Ante”: an order to ‘restore’ available as long as mutual restoration; seller gets good back and buyer gets money back
2) “UCC Revocation”: buyer can revoke for non-conformity if w/in reasonable time of discovery and before any substantial change
3) “Injunctive Relief”: also available under DTPA
Insurance Code —- Timetable
1) “insurer must follow a timetable when processing claims”
2) w/in 15 days of receipt of notice of claim, the insurer must acknowledge claim, begin its investigation, and request supporting documents from insured
3) w/in 15 days of receiving requested info, the insurer must notify claimant that it will accept or deny claim or that it needs additional time (which can extend deadline by another 45 days)
4) insurance company can get another 15 days if it has a “reasonable basis” to suspect arson
Insurance Code —- Investigation
1) “insurer must conduct a reasonable investigation if it denies the claim”
2) unfair or deceptive act to refuse to pay a claim w/out conducting a reasonable investigation w/ respect to the claim
Insurance Code —- Misrepresentation
1) “insurer cannot misrepresent the law or the terms of the policy”
2) misrepresenting a material fact or policy provision is an unfair or deceptive act/practice
Insurance Code —- Explanation
1) “insurer must provide a reasonable explanation when denying a claim”
2) failing to properly provide to a policy holder a reasonable explanation of the basis of the denial of a claim or offer os a compromise
Insurance Code —- Other Violations
1) refusing, failing, or unreasonable delaying a settlement offer under applicable first party coverage on the basis that other coverage may be available or that 3Ps are responsible for the damages suffered
2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim w/ respect to which the insurer’s liability has become reasonably clear
Agency Issues —- Insurance Agents
1) agent and insurer can be jointly and severally liable
2) insurance company liability for age follows basic agency law principles
a) agents can have actual or apparent authority; actual authority can either be express oe implied
b) insurers will be responsible for authorized acts under actual authority and for unauthorized acts if agent was acting w/in scope of “apparent authority”
Remedies Types
1) actual damages
2) additional damages
3) attys fees
4) prompt payment statute
Remedies —- Actual Damages
1) includes all damages recoverable at common law
2) includes mental anguish, but need to establish knowingly predicate and substantial disruption of daily routine
Remedies —- Additional Damages
1) no more than 3 times actual damages w/ knowingly finding
Remedies —- Prompt Payment Statute
1) for insurer violating timetable, insured can recover:
a) amount of claim
b) 18% on claim
c) reasonable attys fees
i) claim could include attys fees incurred when insurer refused to defend insured in lawsuit
Debt Collection —- TDCA Tie-In
1) “TDCA is a tie-in statute, where a TDCA violation is also a DTPA violation.
2) If pled through the DTPA, the consumer would get actual damages, additional damages based upon a knowingly finding and attys fees.
3) however, case law requires consumer standing, which is unlikely in a debt collection case
TDCA Definitions —- “Consumer”
1) an individual w/ consumer debt
TDCA Definitions —- “Consumer Debt”
1) an obligation or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction or alleged transaction
TDCA Definitions —- “Debt Collector”
1) a person who directly or indirectly engages in debt collection ie creditors
TDCA Definitions —- “3P Debt Collectors”
1) follows FDCPA, does not include atty collecting a debt unless the atty has a non-atty employees who either are regularly engaged to solicit debts for collection or regularly make contact w/ debtors to collect debts
TDCA Definitions —- 3P Debt Collectors Additional Responsibilities
1) $10K surety bond
2) if disputed debt, the 3PDC as a duty to investigate and to cease collection efforts until investigation determines accurate amount of debt
3) 3PDC has to warn in its initial oral or written communication that it is an attempt to collect a debt and that any information obtained will be used for that purpose and any subsequent communication must say its from a debt collector
TDCA Violations
1) threatening to take action prohibited by law
2) using profane language or language intended to “abuse unreasonably”
3) causing a phone to ring repeatedly or continuously w/ intent to harass
4) using or threatening violence or other criminal means
5) accusing falsely or threatening to accuse falsely a person of fraud or any other crime
TDCA Non-Violations
1) informing debtor that the debtor may be arrested after proper ct proceedings if the debtor has violated a criminal law of the state
2) threatening to file civil lawsuits to collect the debt
3) exercising or threatening to exercise a statutory or contractual right of seizure, repossession, or sale that does not require ct proceedings
TDCA Remedies —- Types
1) injunctive relief
2) actual damages
3) $100 minimum damages
4) attys fees
TDCA Remedies —- Injunctive Relief
1) under TDCA a consumer doesn’t have to prove CL req for injunction
TDCA Remedies —- Actual Damages
1) all damages recoverable under CL, including mental anguish
TDCA Remedies —- $100 Minumum Damages
1) for specific violations if consumer proves actual damages or gets injunctive relief
FDCPA - “Consumer” Def
1) a person obligated or allegedly obligated to pay a debt
FDCPA - “Debt” Def
1) any obligation or alleged obligation of a consumer
2) to pay money from a transaction in which the money, property, insurance, or services are primarily for personal, family, or household purposes
FDCPA - “Debt Collector” Def
1) any person who uses any instrumentality of interstate commerce or the mails in any business
2) the principal purpose of which is the collection of any debts, or
3) who regularly collects or attempt to collect, direct or indirectly, debts owed or due or asserted to be owed or due to another
FDCPA Violations —- Types
1) validation notice
2) mini-miranda
3) communication restrictions
4) violations
FDCPA Violations —- Violation Notice
1) timing: w/in 5 days after initial communications the DC must send a validation notice to the debtor
2) notice has to include the amount of debt and name of the creditor
FDCPA Violations —- Mini Miranda
1) initial written or oral communication must disclose that DC is attempting to collect a debt and that any information obtained will be used for that purpose; all subsequent communications must disclose that it is from a DC
FDCPA Violations —- Communication Restrictions
1) limited contact w/ persons other than the consumer - location information only
2) place restrictions: no calls to workplace if DC knows or has reason to know employer prohibits such communications
3) time restrictions: DCs have to assume that a convenient time for contact is after 8 am and before 9 pm
FDCPA Violations —- Violations
1) using or threatening use of violence or other criminal means to harm the physical person, reputation or property of any person
2) using obscene or profane language
3) causing a phone to ring continuously w/ intent to annoy, abuse, or harass
4) representing that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property unless such action is lawful and DB or creditor intends to take action
5) threatening to take action that cannot legally be taken or that is not intended to be taken
FDCPA Remedies
1) actual damages
2) additional damages
3) attys fees
