Consumer Rights Flashcards
Insurance Code Chapter 541 Prohibited Practices
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
TDCA Prohibited Practices
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
DTPA Defenses
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
Insurance company common law duties
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
Insurance Code Chapter 541 Elements
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
TDCA “Third-party debt collector”
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)
Statute of Limitations DTPA
2 years, begins to run when the violation occurs or the customer discovers or should have discovered the injury
FDCPA Defense
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
Chapter 542 Remedy
18% of amount of calm per year delays, and attorney’s fees
Valid DTPA waiver
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
Insurance Code Chapter 541 Statute of Limitations
2 years
Insurance Code Chapter 541 Remedies
1) Actual damages
2) Treble damages
3) Attorney’s fees and costs
4) Equitable and other relief
DTPA Public remedies
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
DTPA Compulsory Mediation
Either party may compel mediation within 90 days of service of process
TDCA “Debt Collector”
Person who directly or indirectly engages in debt collection
FDCPA Prohibited practices
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
DTPA Economic damages
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
TDCA “Credit Bureau”
Person or business who, for compensation, gathers, records, and disseminates information relating to creditworthiness, financial responsibility, and paying habits of a person
TDCA Restrictions on credit bureaus
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
TDCA Defenses
Violation resulted from bona fide error that occurred notwithstanding use of reasonable procedures to avoid error
TDCA Statute of limitations
1 year
Breach of warranties
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
FDCPA Statute of Limitations
1 year
TDCA “Consumer”
Individual who has consumer debt, or a personal, family, or household obligation
Chapter 542 Prompt Payment
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
FDCPA “Debt”
Obligation or alleged obligation to pay money arising out of a transaction that is primarily for personal, household or family purposes
Various Tie-In Statutes to DTPA
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
FDCPA Private remedies
1) Actual damages
2) Civil penalty up to $1,000 per case
3) Mandatory attorney’s fees
Violations of insurance code
Actionable under the DTPA, but need to be established by other means
DTPA Settlement offer
Defendant may offer to settle with consumer within 60 days after receipt of the notice
Unconscionable action
Action takes advantage of consumer’s lack of knowledge or capacity to a grossly unfair degree, to the consumer’s detriment
DTPA Private remedies
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
Insurance Code Private causes of action
1) Recovery of damages
2) Injunctive relief
3) Additional damages
4) Attorney’s fees
FDCPA “Consumer”
Any natural person obligated or allegedly obligated to pay a debt
Insurance Code Chapter 541 Notice
Must provide notice prior to 60 days before trial, and either party may compel mediation
DTPA Notice
Consumer must provide detailed written notice to defendant unless impracticable because of limitations or the claim is asserted in a counterclaim
TDCA “Creditor”
Party, other than a consumer, to a transaction involving one or more consumers
FDCPA Obligation to provide validation of debts
Must provide written notice within 5 days, containing:
1) Amount owed
2) Name of creditor
3) notification
DTPA Exemptions
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)
DTPA Proper defendant
No privity required. Defendant’s false, misleading, or deceptive act or practice must be committed in connection with the transaction at issue.
TDCA Remedies
Actual damages, injunction, or restraining order; civil penalty; reasonable attorney’s fees
DTPA Laundry list violations
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
FDCPA “Debt Collector”
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
“Consumer” under DTPA
A person or entity that seeks or acquires by purchase or lease, any goods or services
“Goods” under the DTPA
Purchased or leased tangible chattels or personal property
