Consumer Rights

Question 1

Insurance Code Chapter 541 Prohibited Practices

Answer 1

1) Misrepresentation
2) False information and advertising
3) Defamation
4) Coercion, intimidation, or boycott to create unreasonable restraint or monopoly
5) Filing false financial statement
6) Knowingly make, permit the making of, or offer to make an insurance contract other than as expressed in issued contract
7) Unfair discrimination in life insurance and annuity contracts
8) Deceptive name, word, symbols, device, or slogan
9) Unfair settlement practices

Question 2

TDCA Prohibited Practices

Answer 2

1) Threats or coercion
2) Harassment or abuse (use profanity, place phone calls without identified itself to annoy, harass, or threaten)
3) Repeatedly or continuously call with intent to harass
4) Incur additional expenses by incurring long distance or telegram fees without disclosing name of caller

Question 3

DTPA Defenses

Answer 3

1) Defendant gave consumer timely written notice that defendant relied on government or third-party information that was unknowingly false or inaccurate
2) Defendant tenders full amount of damages and attorney’s fees within 30 days of receiving consumer’s DTPA notice
3) Preemption by the Texas Residential Construction Liability Act for construction defects in residential projects
4) Freely negotiated “as is” contract provisions

Question 4

Insurance company common law duties

Answer 4

Duty of good faith and fair dealing (when insurer fails to settle a claim when its liability has become reasonably clear
Stowers doctrine - duty to accept reasonable settlement demand within policy limits

Question 5

Insurance Code Chapter 541 Elements

Answer 5

1) Plaintiff is a person
2) Defendant is a person
3) Defendant committed either violation of insurance code or violation of DTPA laundry list on which plaintiff relied to his detriment; and
4) Defendant’s violation was a producing cause of actual damages

Question 6

TDCA “Third-party debt collector”

Answer 6

Same as debt collector, but not including an attorney collection a debt on behalf of a client (unless the attorney has non-attorney employees who regularly engage in debt collection)

Question 7

Statute of Limitations DTPA

Answer 7

2 years, begins to run when the violation occurs or the customer discovers or should have discovered the injury

Question 8

FDCPA Defense

Answer 8

Show by preponderance of the evidence that violation was not intentional and resulted from a bona fide error despite maintenance of procedures reasonably adapted to avoid such error

Question 9

Chapter 542 Remedy

Answer 9

18% of amount of calm per year delays, and attorney’s fees

Question 10

Valid DTPA waiver

Answer 10

1) Prescribed written content
2) Signed by consumer
3) Written in bold face type, 10-point size or bigger
4) Consumer cannot be in significantly unequal bargaining position
5) Consumer must be represented by attorney of own choosing

Question 11

Insurance Code Chapter 541 Statute of Limitations

Answer 11

2 years

Question 12

Insurance Code Chapter 541 Remedies

Answer 12

1) Actual damages
2) Treble damages
3) Attorney’s fees and costs
4) Equitable and other relief

Question 13

DTPA Public remedies

Answer 13

1) Injunction or restraining order
2) General penalty of no more than $20,000 per violation
3) specific penalty
4) forfeiture of property or receivership for failure to pay restitution

Question 14

DTPA Compulsory Mediation

Answer 14

Either party may compel mediation within 90 days of service of process

Question 15

TDCA “Debt Collector”

Answer 15

Person who directly or indirectly engages in debt collection

Question 16

FDCPA Prohibited practices

Answer 16

1) Third-party communications
2) Contacting consumer in certain manners (unusual or inconvenient time/place, if known to be represented by attorney, place of employment if known that employer objects)
3) Cannot abuse or harass
4) Cannot use false or misleading representations
5) Cannot use unfair/unconscionable practices

Question 17

DTPA Economic damages

Answer 17

May recover the greater of the benefit-of-the-bargain damages or out-of-pocket damages, but not both. Can also recover cots of repair so long as feasible without economic waste and award would not result in double recovery

Question 18

TDCA “Credit Bureau”

Answer 18

Person or business who, for compensation, gathers, records, and disseminates information relating to creditworthiness, financial responsibility, and paying habits of a person

Question 19

TDCA Restrictions on credit bureaus

Answer 19

1) Misrepresentation (cannot use name “credit bureau” unless operating as such)
2) Credit reports must be furnished within 45 days of request
3) Corrections must be made within 5 days if admitted by third-party debt collector, or within 30 days of complaint if third-party debt collector fails to reply to credit bureau

Question 20

TDCA Defenses

Answer 20

Violation resulted from bona fide error that occurred notwithstanding use of reasonable procedures to avoid error

Question 21

TDCA Statute of limitations

Answer 21

1 year

Question 22

Breach of warranties

Answer 22

Express or implied, including implied warranties of:

1) merchantability,
2) fitness for a particular purpose
3) title
4) suitability in commercial leaseholds
5) good and workmanlike performance of services, and
6) good and workmanlike construction and habitability in the sale of a new home

Question 23

FDCPA Statute of Limitations

Answer 23

1 year

Question 24

TDCA “Consumer”

Answer 24

Individual who has consumer debt, or a personal, family, or household obligation

Question 25

Chapter 542 Prompt Payment

Answer 25

1) 15 days after receipt to acknowledge receipt, request information, and begin investigation
2) After receipt of necessary documentation, 15 business days to accept/reject claim
3) Payment made within 5 business days of acceptance; or within 60 days of receipt of claim if insurer fails to send notice of acceptance/rejection

Question 26

FDCPA “Debt”

Answer 26

Obligation or alleged obligation to pay money arising out of a transaction that is primarily for personal, household or family purposes

Question 27

Various Tie-In Statutes to DTPA

Answer 27

1) Business Opportunities Act
2) Health Spa Act
3) Home Solicitation Act
4) Lemon Law
5) Manufactured Housing Standards Act
6) Self-Storage Facility Liens
7) Telephone solicitations
8) Debt Collection Act
9) Unfair Claims Settlement Practices Act

Question 28

FDCPA Private remedies

Answer 28

1) Actual damages
2) Civil penalty up to $1,000 per case
3) Mandatory attorney’s fees

Question 29

Violations of insurance code

Answer 29

Actionable under the DTPA, but need to be established by other means

Question 30

DTPA Settlement offer

Answer 30

Defendant may offer to settle with consumer within 60 days after receipt of the notice

Question 31

Unconscionable action

Answer 31

Action takes advantage of consumer’s lack of knowledge or capacity to a grossly unfair degree, to the consumer’s detriment

Question 32

DTPA Private remedies

Answer 32

1) Economic damages
2) Mental anguish and additional damages, if conduct was knowing or intentional
3) Actual damages for violation of a tie-in statute
4) Mandatory attorneys’ fees
5) Treble damages for knowing conduct (including treble for mental anguish if intentional conduct)
6) Equitable remedies including injunctions, restraining orders, rescission and restitution

Question 33

Insurance Code Private causes of action

Answer 33

1) Recovery of damages
2) Injunctive relief
3) Additional damages
4) Attorney’s fees

Question 34

FDCPA “Consumer”

Answer 34

Any natural person obligated or allegedly obligated to pay a debt

Question 35

Insurance Code Chapter 541 Notice

Answer 35

Must provide notice prior to 60 days before trial, and either party may compel mediation

Question 36

DTPA Notice

Answer 36

Consumer must provide detailed written notice to defendant unless impracticable because of limitations or the claim is asserted in a counterclaim

Question 37

TDCA “Creditor”

Answer 37

Party, other than a consumer, to a transaction involving one or more consumers

Question 38

FDCPA Obligation to provide validation of debts

Answer 38

Must provide written notice within 5 days, containing:

1) Amount owed
2) Name of creditor
3) notification

Question 39

DTPA Exemptions

Answer 39

1) Business consumers with assets over $25 million
2) Professional service providers;
3) Real estate broker or salesperson
4) Transactions over $500,000, unless it involves the consumer’s residence
5) Written contract over $100,000 and consumer represented by an attorney
6) Publishers of advertisements in regularly published newspapers, unless the newspaper had specific “knowledge of the false, deceptive, or misleading acts or practices” or “had a direct or substantial financial interest in the sale of the unlawfully advertised good or service
7) Personal injury claims (economic damages can be pursued under the DTPA)

Question 40

DTPA Proper defendant

Answer 40

No privity required. Defendant’s false, misleading, or deceptive act or practice must be committed in connection with the transaction at issue.

Question 41

TDCA Remedies

Answer 41

Actual damages, injunction, or restraining order; civil penalty; reasonable attorney’s fees

Question 42

DTPA Laundry list violations

Answer 42

1) Misrepresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have;
2) Representing that goods are of a particular standard or quality, or that goods are of particular style or model, when they are not (misrepresentation of a material fact)
3) Representing that an agreement confers or involves rights, remedies, or obligations which it does not have
4) Failing to disclose information concerning goods or services known at time of the transaction, if the failure to disclose induced the consumer into a transaction which the consumer would not have entered had the information been disclosed

Question 43

FDCPA “Debt Collector”

Answer 43

Any person who uses an instrument of interstate commerce or mail and principal purpose of business is collection of debts, or who regularly collects or attempts to collect debts owed

Question 44

“Consumer” under DTPA

Answer 44

A person or entity that seeks or acquires by purchase or lease, any goods or services

Question 45

“Goods” under the DTPA

Answer 45

Purchased or leased tangible chattels or personal property