Consumer Rights

Question 1

what does DTPA stand for?

Answer 1

Deceptive Trade Practices Act

Question 2

how did the Texas legislature want the DTPA to be construed/interpreted?

Answer 2

the DTPA is to be liberally construed in favor of consumers

Question 3

what are the two main purposes of the DTPA?

Answer 3

1. to protect consumers against false, misleading, and deceptive acts or practices.
2. to provide efficient and economical procedures to secure such protection.

Question 4

the DTPA creates a private cause of action. T/F

Answer 4

T

Question 5

what kind of damages are recoverable through DTPA? how does this relate to the big thing that DTPA does differently from common law?

Answer 5

because the DTPA was intended to reduce the burden on consumers bringing action for deceptive shit, it got rid of the common law fraud requirements of having to show the D’s state of mind. so through DTPA you can recover ECONOMIC damages without a scienter requirement. however, other damages besides economic (like e.g. damages for mental anguish) are recoverable only if the P can show intentional conduct.

all prevailing consumers also recover reasonable attorneys fees under the DTPA

Question 6

what are treble damages?

Answer 6

additional discretionary damages

Question 7

what are the elements of a private cause of action under the DTPA? do not list out the types of actionable conduct

Answer 7

1. P is a consumer
2. D is engaged in conduct that is connected to the consumer transaction
3. D engaged in actionable conduct [list on another slide]
4. D’s violation was a producing cause; AND
5. P suffered damages

Question 8

one of the required elements of a private cause of action under the DTPA is that the D must have engaged in one or more forms of actionable conduct. what are the forms of actionable conduct?

Answer 8

1. a violation of the DTPA’s list of acts or practices that are deemed deceptive (the “laudry list”)
2. a breach of warranty
3. an unconscionable action or course of action
4. a violation of Insurance Code, Chapter 541–unfair or deceptive insurance practices
5. a violation of a tie-in statute

Question 9

what is the basic definition of “consumer” (element 1 of pvt. cause of action under DTPA)

Answer 9

a consumer is someone who SEEKS OR ACQUIRES, by purchase or lease, goods or services for use.

Question 10

can an immediate reseller be a consumer?

Answer 10

yes

Question 11

does a consumer need to be a natural person?

Answer 11

no, any entity, or the state of texas, or any political subdivision, can all be consumers

Question 12

is there a privity requirement to be a consumer? like you do need to be in privity with the seller?

Answer 12

no. a consumer does not need to be the one who pursues or completes the transaction. as long as P is the INTENDED beneficiary of the product or service, he can still be a consumer under DTPA

Question 13

is payment or consideration required to be a consumer?

Answer 13

no, a consumer need not complete the transaction in order to “seek” goods or services. as long as there is a GOOD FAITH intention of completing a purchase and the OBJECTIVE ability to complete the transaction, the consumer has standing.

Question 14

how does DTPA define “goods and services”? remember definition of consumer is someone who seeks or acquires goods or services

Answer 14

both are broadly defined.

goods includes tangible goods. it DOES include real estate and DOES NOT include intangibles like stocks and bonds (so opposite of the UCC on both).

services include labor, insurance, and repair services. does NOT cover PURE LOANS (so a dude just going to bank to get a personal loan would not be a consumer) but DOES cover loans acquired in order to purchase a good or service.

Question 15

many statuory exemptions to limit DTPA’s scope. list out the exemptions. will elaborate on other slides.

Answer 15

1. large business consumers
2. professionals
3. media
4. real estate brokers
5. large transactions
6. personal injury claims

Question 16

elaborate on DTPA first statutory exemption: business consumers

Answer 16

the DTPA does not apply to business consumers (using the goods or services of business or commercial use) with ASSETS OVER $25,000,000

Question 17

elaborate on DTPA second statutory exemption: pros

Answer 17

the DTPA does not apply to professionals when they are GIVING ADVICE, JUDGMENTS, OR OPINIONS. but the DTPA still applies if the professional makes an EXPRESS MISREPRESENTATION OF FACT.

Question 18

elaborate on DTPA third statutory exemption: media

Answer 18

the DTPA does not apply to media defendants unless they have actual knowledge of the falsity of their act or practice.

Question 19

elaborate on DTPA fourth statutory exemption: real estate brokers

Answer 19

the DTPA does not apply to real estate brokers or real estate salespersons unless they act UNCONSCIONABLY, or they EXPRESSLY MISREPRESENT or fail to disclose a MATERIAL fact.

Question 20

elaborate on DTPA fifth statutory exemption: large transactions

Answer 20

the DTPA does not apply to transactions over $500,000 of consideration of no legal representation and transactions over $100,000 of consideration if represented by a licenced attorney

EXCEPTION: the consumer’s residence is not counted, so still a consumer if over 100k/500k transaction for residence

Question 21

elaborate on DTPA sixth statutory exemption: personal injury claims

Answer 21

as a general rule, the DTPA does not apply to personal injury claims BUT medical expenses incurred or any lost wages suffered as a result of the personal injury are considered economic damages and can be recovered under the DTPA. So e.g. if you bought some bad product like tires for our unicycle and suffered personal injury, you can’t get recovery FOR THE PERSONAL INJURY ITSELF, but medical costs associated with the injury would be part of the ordinary economic damages.

Question 22

what are the elements of a private cause of action under the DTPA again? do not list out the types of actionable conduct

Answer 22

1. P is a consumer
2. D is engaged in conduct that is connected to the consumer transaction
3. D engaged in actionable conduct [list on another slide]
4. D’s violation was a producing cause; AND
5. P suffered damages

Question 23

explain element 2 of the private cause of action under the DTPA: that the D is engaged in conduct that is connected to the consumer transaction

Answer 23

this is the easiest and most common sense element. it really is just what it says…that the D’s conduct is connected with the consumer transaction

Question 24

recall element 3 of a private cause of action under DTPA: D was engaged in actionable conduct. what are the categories of actionable conduct?

Answer 24

1. the “laundry list” (note: this requires reliance, not intent)
2. breach of warranty
3. violation of insurance code
4. unconscionable action or course of action
5. violation of a tie-in statute

Question 25

recall that the first actionable conduct is the “laundry list” of violations. list 7 types of conduct on the laundry list

Answer 25

1. facts - representing that goods or sevices have characteristics [notice, super broad], sponsorship, approval, ingredients, uses, benefits or quantities that they do not actually have.
2. quality - representing that goods or services are of a particular standard, quality, grade, or that goods are of a particular style or model if they are actually of another
3. contractual - representing that a contract or agreement confers or involves right, remedies, or obligations which it does not have or involve or which are prohibited
4. silence - failing to disclose information concerning goods or services which was known at the time of the transaction if such failure was intended to induce the consumer into a transaction which the consumer would not have entered had the information been disclosed [obviously, it makes sense the the one about silence has a knowledge/intent requirement…it would be very unfair if you were held liable for not saying something you didn’t even know]
5. repairs - knowingly making false of misleading statements of fact concerning the need for parts, replacement, or repair service
6. warranty - warranty fraud. representing that a guarantee or warranty confers or involves rights or remedies which it does not have or involve
7. work performed - representing that works or services have been performed on, or parts replaced, when the work or services were not performed or the parts were not replaced

Question 26

threshold for laundry list misprepresentation to be actionable. it must be a misrepresentation of a _______

Answer 26

material fact. mere puffery is not enough

Question 27

T/F. laundry list misrepresentations are actionable if the seller commits the misrepresentation; the consumer’s actual reliance does not matter.

Answer 27

F. For laundry list violations to be actionable, the consumer must have relied on the deceptive act to his detriment.

Question 28

Recall there are 5 categories of actionable conduct. 1. laundry list of misprepresentations. 2. breach of warranty. 3. violation of the insurance code. 4. unconscionable shit. and 5. violation of a tie-in statute.

elaborate on 4, unconscionable shit.

Answer 28

unconscionable action or course of action is conduct that takes advantage of a consumer’s lack of knowledge, ability, experience, or capacity to a grossly unfair degree.

gross unfairness must be glaring, noticeable, flagrant, complete, and unmitigating.

Question 29

can something be both a violation of a laundry list provision and an unconscionable act?

Answer 29

yes

Question 30

Recall there are 5 categories of actionable conduct. 1. laundry list of misprepresentations. 2. breach of warranty. 3. violation of the insurance code. 4. unconscionable shit. and 5. violation of a tie-in statute.

give some examples of tie-in statutes

Answer 30

• the DTCA - texas debt collection act
• the home solicitations act - consumers solicited at home for over $25 are entitled to written K, specific disclousures, and right to cancel within 3 days
• texas business opportunity act - protects against deceptive practices in the advertising, offering for sale or lease, and sale or lease of business opportunties (franchises as defined by fed law do not count)
• health spa act
• manufactured housing standards act
• telephone solicitation act

Question 31

the DTPA creates a set of new private warranties. T/F

Answer 31

F. it only takes the existing warranty law in Texas and brings it into the DTPA

Question 32

for it to be an actionable violation for DTPA purposes, both express and implied warranties are counted. T/F

Answer 32

T. a breach of an express or implied warranty will allow a consumer to bring a cause of action under the DTPA

Question 33

___ serves as the basis (i.e. legal source) of all warranties related to goods

Answer 33

the UCC, bitch

Question 34

an express warranty is created by…

Answer 34

an express warranty is created by an affirmation of fact or promise to the consumer that becomes the basis of the bargain.

Question 35

an express warranty does/does not need to be in writing.

Answer 35

does not.

Question 36

a statement about the quality of a good may be considered a warranty, but for DTPA purposes cannot be part of both a breach of warranty and a laundry list violation.

Answer 36

F, bitch. a statement about quality or character of goods can be the basis of both a laundry list violation and an express warranty about those goods.

Question 37

an express warranty can be created by a description of the goods or…

Answer 37

by a sample

Question 38

an express warranty can only be excluded, limited, or modified if…

Answer 38

the limiting language is consistent with the express warranty

so this is FINE:
car salesman tells buyer that a car runs well and will run for at least 3 yrs. then the receipt says “no express warranty after 36 months”
this is is BAD:
car salesman tells buyer that a car runs well and will run for at least 3 yrs. then the receipt says “no express warranty”

Question 39

the UCC gives three implied warranties for goods. list them.

Answer 39

1. implied warranty of merchantability
2. implied warranty of fitness for a particular purpose
3. implied warranty of title

Question 40

what is the UCC implied warranty of merchantability? when does it arise?

Answer 40

warranty that goods are fit for the ordinary purpose for which the goods are used. only arises when the sale of goods is by a merchant.

Question 41

are used goods covered by the UCC implied warranty of merchantability?

Answer 41

a purchaser of used goods generally cannot sue the seller for a breach of the implied warranty of merchantability if the purchaser knows the goods are used. BUT the buyer MAY be able to sue the the MANUFACTURER if the implied warranty of merchantability was breached when the used goods first left the manufacturer’s possession (so breached while with the 1st purchaser)

Question 42

the implied warranty of merchantability can/cannot be disclaimed

Answer 42

can.

Question 43

how can the implied warranty of merchantability be disclaimed?

Answer 43

orally or in writing by specifically mentionaing the implied warranty of merchantability and, if in writing, by being CONSPICUOUS.

but there is safe harbor for conspicuous writing of “as is,” “with all fault,” or other similar lanaguage which in common understanding calls the buyer’s attention to the exclusion of warranties and makes plain that there is no implied warranty

Question 44

the implied warranty of fitness for a particular purpose arises when:

Answer 44

1. the seller has reason to know (i) the buyer’s particular purpose for the goods, and (ii) that the buyer is relying on the seller’s judgment; AND
2. the buyer in fact relies on the seller’s skill or judgement to select suitable goods.

Question 45

the implied warranty of fitness for a particular purpose can only be excluded or modified by…

Answer 45

conspicuous language in writing (not that, unlike the implied warranty of merchantability, this cannot be disclaimed orally)

Question 46

T/F. unlike the implied warranty of merchantability, the implied warranty of fitness for a particular purpose is not limited to merchants.

Answer 46

T

Question 47

what is the implied warranty of title

Answer 47

the seller warrants that he owns and has the ability to convey ownership of the goods he is selling.

Question 48

is there a requirement of privity between buyer and seller for all UCC warranties to arise?

Answer 48

under the decisions of Texas courts and under the UCC, privity is NOT required for warranties to arise under the UCC. that’s the reason why a downstream used buyer can still sue manufacturer. however, under the DTPA, there is stil a requirement that the DEFENDANT be connected with the transaction at issue in the cause of action.

Question 49

the source of warranty law with respect to services is…

Answer 49

common law

Question 50

how are express warranties with respect to services created?

Answer 50

an affirmation of fact or promise that becomes the basis of the bargain with respect to the services creates an express warranty.

Question 51

there is an implied warranty as a matter of texas common law for services for repair or modification. what is the warranty and when does it apply?

Answer 51

it is an implied warranty that services for the repair or modification of existing tangible goods will be performed in a good and workmanlike manner.

applies only for repair or modifications of existing tangible goods, not a good to be created

the implied warranty for services generally DOES NOT apply to the performance of professional services (legal, medical, accounting, etc.)

Question 52

the implied warranty with respect to services can/cannot be completely disclaimed by the seller

Answer 52

cannot be completely. however, it can be superseded by an express warranty

Question 53

there are two warranties implied by common law with respect to new home construction. what are the warranties and what is the nickname for new home construction warranties?

Answer 53

these are called Humber warranties.

1. there is an implied warranty that a new home is habitable
2. there is an implied warranty that the house was built in a good and workmanlike manner

Question 54

how can you modify the humber warranties?

Answer 54

the implied warranty of good and workmanlike construction can be superseded by an express warranty

the implied warranty of habitability generally cannot be waived

Question 55

the implied warranty of habitabilty for new home construction cannot be wavied, but…

Answer 55

it only applies to latent (hidden) defects, so a purchaser who buys a house with express and full knowledge of any specific current defects effectively waives warranty as to those defects.

Question 56

the two primary measures of economic damages are: (also define)

Answer 56

1. the benefit of the bargain - the difference between the value of the goods or services as represented and the value as actually delivered
2. out of pocket - the difference between the price paid and the value of goods or services as delivered

imagine a dude buying a house that was represented as being worth $100k. the dude gets a great deal and pays $50k for it. turns out the house is actually worth $50k, due to defects. with benefit of the bargain damages, the dude would still get $50k in damages. so he would get the benefit of the represented bargain. with out of pocket, he would not get anything, because he did not actually lose anything out of pocket (he could just sell the house for $50k and recoup was he paid)

Question 57

between benefit of the bargain and out-of-pocket damages, how is one chosen over another?

Answer 57

the consumer can choose whether to recover under benefit of the bargain or out of pocket

Question 58

what are other measures of economic damages allowed under DTPA besides to two main ones?

Answer 58

1. cost of repair - reasonable cost to make the goods or services as warranted or represented.
2. loss of use - cost to rent replacement goods while the purchased goods are unavailable.
3. lost profits

Question 59

the cost of repair is recoverable so long as…

Answer 59

the repair is feasible without economic waste and the award would not result in double recovery

Question 60

T/F. for loss of use damages, the consumer must actually rent replacement goods in order to recover

Answer 60

F, the consumer does not need to actually rent replacement goods in order to have loss of use damages

Question 61

lost profits are recoverable under the DTPA, but only if…

Answer 61

established with reasonable certainty

Question 62

generally, personal injury damages like pain and suffering and physical impairment are not recoverable under the DTPA. what are the exceptions?

Answer 62

exception 1: lost incomes and medical expenses due to a personal injury are considered economic damages and are recoverable under the DTPA
exception 2: compensation for mental anguish is recoverable through the DTPA if certain showings are made: (a) the actionable conduct must be committed knowingly or intentionally and (b) the consumer must present DIRECT evidence showing the nature, degree, and severity of the mental anguish which causes substantial disruption in the consumer’s daily routine.
exception 3: for tie-in statutes, the “actual damages” are recoverable, including personal injury damges.

Question 63

additional discretionary damages are often called ___ and require ___

Answer 63

treble damages; require KNOWING OR INTENTIONAL conduct

Question 64

what are the max limits for treble damages?

Answer 64

if the conduct was committed knowingly, the consumer can recover no more than three times the economic damages.

if the conduct was committed intentionally, the consumer can recover no more than three times the SUM of the economic damages and damages for mental anguish.

Question 65

are attorneys fees awarded?

Answer 65

the court must award reasonable and necessary attorneys fees to any consumer who prevails in a claim under the DTPA. a net recovery is not required for “prevailing” in a DTPA claim.

Question 66

is it possible to straight up waive all DTPA remedies? how?

Answer 66

yes, may be waived in very limited and unlikely circumstances. to be effective the waiver must:

1. be in writing
2. be conspicuous. [will cover details on another slide]
3. must be signed by a consumer who is in a similar bargaining position with the seller AND represented by an attorney during the transaction

Question 67

for a straight up total fucking waiver of all DTPA remedies, one of the requirements of the waiver is that it be conspicuous. in the context of total waiver, what is considered conspicuous enough?

Answer 67

conspicuous in this context is statutorily defined as 10-pt or greater font AND bold; and

must state something more or less like “i waive my rights under the Deceptive Trade Practices - Consumer Protection Act, sec. 17.41, Business & Commercial Code, a law that gives consumer special rights and protections. After consultation with an attorney of my own selection, I voluntarily consent to this waiver.”

Question 68

common law defenses (like the parol evidence rule, substantial performance doctrine, and doctrine of merger) are/are not applicable to DTPA cases

Answer 68

are not

Question 69

there are two significant statutory defenses set out in the DTPA that defeat DTPA claims completely. they are:

Answer 69

1. reliance on third-party information

2. rejection of full payment settlement offer

Question 70

explain the first major statutory defense provided by the DTPA to defeat DTPA claims entirely.

Answer 70

reliance on third-party information.

if the defendant gave notice to the consumer IN WRITING at the time of the transaction that the D is relying on third-party information to make statements about the goods or services, then that can be a defense to a later DTPA claim if the information was incorrect.

Question 71

T/F. the reliance on third-party information defense applies even if the D knew that the information he was relying on was incorrect.

Answer 71

F. the defense does not apply if the defendant knew that the information was incorrect at the time of the transaction

Question 72

explain the second major statuory defense provided by the DTPA to defeat DTPA claims entirely.

Answer 72

rejection of full payment settlement offer

at least 60 DAYS before a suit brought under DTPA, a consumer must provide written notice to the defendant of his intent to sue. then, if the defendant offers to pay the consumer all of his claimed damages and attorney’s fees WITHIN 30 DAYS of receiving notice of the consumer’s DTPA claim, and the consumer rejects that offer, the defendant will have no ability under the DTPA

Question 73

what is the “mere breach of contract” doctrine?

Answer 73

this doctrine distinguishes between actionable misrepresentation of fact under the DTPA and mere broken promises (i.e., failures to perform). a mere breach of contract is NOT a DTPA violation. if the D simply breaks a promise to perform, his assurance that he would perform those obligations is a mere breach of contract.

Question 74

for an “as is” clause to be effective in barring a DTPA claim, it must be:

Answer 74

1. freely negotiated;
2. between simarly sophisticated parties;
3. part of the basis of the bargain; and
4. in an arms-length transaction

Question 75

the DTPA statue of limitations is

Answer 75

2 years, unless fraudulent concealment.

fraudulent concealment exception: if the D engages in conduct specifically designed to keep the consumer from learning of the injury or cause of action, the limitations date may be extended up to 180 days (so 180 days starts at the point of bad conduct)

Question 76

when does the DTPA statute of limitations begin to run?

Answer 76

from when the DTPA violation occured or from when the consumer discovered or reasonably should have discovered the wrongfully caused injury (so if they cannot reasonably discover until later, the SoL will not run until later)

Question 77

recall that P must provide pre-suit notice to D at least 60 days before the suit is brought under the DTPA. the DTPA provides that the D may then offer a full or partial settlement to the consumer. if D chooses this option, the settlement must be:

Answer 77

1. sent within 60 days of receiving notice.
2. if filing answer, then may also be sent within 90 days after filing answer (if NO mediation has occurred), or 20 days after mediation (if mediation occurred).
3. must include separately stated amounts for money damages and attorney’s fees

Question 78

if P rejects offer of settlement and proceeds with trial, how are subsequent findings of damages treated?

Answer 78

if the trier-of-fact finds that the consumer’s damages are less than or substantially the same as the rejected settlement offer, then the P only gets the lesser of the two amounts. also, if attorneys fees are determined to be close to the amount offered in the settlement, court may limit to the amount offered.

Question 79

what are the two main insurance company common law duties?

Answer 79

the duty of good faith and fair dealing and the Stowers Doctrine

Question 80

what is the common law insurance duty of good faith and fair dealing? what is the standard?

Answer 80

under Texas common law, an insurance company owes a duty of good faith and fair dealing to its policyholders. here is the standard: the insurance company has a duty to attempt in good faith to effectuate a PROMPT, FAIR, AND EQUITABLE settlement of a claim on which the insurer’s liability has become REASONABLY CLEAR.

the insurance company cannot delay or use other tactics to keep from paying the claim promptly and fairly. this cause of action is called “bad faith”

Question 81

to whom is the common law insurance duty of good faith and fair dealing owed? to whom is it not owed?

Answer 81

the duty of good faith and fair dealing is owed to the policyholder. it does not extend to third party claimants (but see Stowers Doctrine)

Question 82

what is the stowers doctrine?

Answer 82

basic idea is insurance companies have duty to act reasonably in accepting settlement offers.

more detailed explanation: insurance companies have a common law duty to its insured to accept a reasonable settlement demand from a third party within its policy limits. the Stowers Doctrine says that an insured will have a cause of action for negligence against his insurer if the insurer UNREASONABLY refuses to accept an unconditional settlement offer that is within its policy limits. if the insured is subsequently hit with a judgment in excess of policy limits, then the insured can recover the excess amount.

Question 83

what’s the point of insurance code chapter 541?

Answer 83

texas insurance code chapter 541 is liberally construed to further protect consumers against unfair methods of competition and unfair or deceptive acts or practices within the insurance industry. it was enacted concurrently with the DTPA and many provisions are essentially the same.

Question 84

insurance code chapter 541 does/does not create a cause of action for third party claims.

Answer 84

does not

Question 85

the elements of a private cause of action under Chapter 541 are:

Answer 85

1. the P must be a person (very broad, includes corporations and any entitity engaged in INS business)
2. the D must be a person (same broad definition)
3. actionable conduct–either a violation of chapter 541 subchapter B (similar to DTBA laundry list) OR a violation of the DTPA laundry list
4. the D’s violation was a producing cause of the P’s damages
5. the P suffered actual damages (so insurance code uses “actual” instead of “economic” like DTPA)

Question 86

most commonly seen acts prohibited by chapter 541 subchapter B (the provision defines several unfair methods of competition and unfair or deceptive acts or practices in the INS industry)

Answer 86

1. misrepresentation of an insurance policy (including saying that a claim is not covered when it actually is)
2. false advertising regarding the business of insurance
3. failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement once liability has become reasonably clear (so idea of goof faith is incorproated into Subchapter B itself)
4. refusal to pay a claim without conducting a reasonable investigation
5. misrepresenting a material fact or policy provision relating to the coverage at issue to a claimant

Question 87

insurance code chapter 541 remedies: explain what “actual damages” means

Answer 87

“actual damages” are broader than the “economic damages” available under the DTPA. they may include common law damages such as personal injury mental anguish damages, as well as economic damages.

Question 88

insurance code chapter 541 remedies: are there additional discretionary damages?

Answer 88

this parrallells the DTPA.

additional discretionary damages are dependent on finding that the D’s conduct was committed knowingly or intentionally. what it entails is that, in addition to actual damages, the P may recover up to 3 times the actual damages as additional discretionary damages.

Question 89

insurance code chapter 541 remedies: can you recover attorney’s fees?

Answer 89

this parallels the DTPA.

there is a mandatory provision for the recovery of REASONABLE AND NECESSARY attorney’s fees incurred by a prevailing plaintiff.

Question 90

insurance code chapter 541 remedies: are there equitable remedies?

Answer 90

this parallels the DTPA.

under chapter 541, THE COURT has the ability to order broad relief such as an injunction or rescission

Question 91

insurance code chapter 541: what is the statute of limitations? explain when it starts running and any extensions

Answer 91

this parallels the DTPA.

a 2-year statute of limitations applies to all actions brought under the insurance code. the statute begins running on the date the violation occurred, or the plaintiff discovered the violation. may be extended up to 180 days if the D knowingly caused a delay

Question 92

insurance code chapter 541 remedies: is there a notice requirement? explain

Answer 92

this parallels the DTPA

the P must provide notice to the D detailing his complaint, damages, and expenses, including attorney’s fees, with at least 60 days notice.

Question 93

insurance code chapter 541 remedies: is there a settlement requirement? explain

Answer 93

this parallells the DTPA

a D may offer a settlement to the consumer within the 60 day notice period, and if the offer is rejected and the P is awarded damages at trial, the court may limit damages based on the reasonableness of the original offer

Question 94

what is the point of the texas insurance code chapter 542, subchapter B. what kind of deceptive act is required?

Answer 94

chapter 542 provides a disincentive for insurance companies to delay payment of claims by giving consumers a cause of action against the insurance company for a failure to pay a claim promptly. this cause of action is not dependent on any misrepresentation or any unfair or deceptive practice–it arises just from an unreasonable delay

Question 95

upon receiving an insurance claim, what are the first three duties that insurance code chapter 542 requires within __ days.

Answer 95

an insurer generally must perform the following duties within 15 calendar days of receiving a claim:

1. the insurer must acknowledge receipt of the claim;
2. must begin an investigation of the claim; and
3. must request any information it deems necessary to make a decision about paying the claim.

Question 96

insurance code chapter 542 requires that, within ___ calendar/business days of receipt of all necessary information and documentation, the insurer must decide whether to pay or reject AND NOTIFY the claimant of the decision

Answer 96

15 business days

Question 97

insurance code chapter 542: if the insurance company denies a claim, it must…

Answer 97

state the reasons for the rejection in the written notice to the claimant

Question 98

insurance code chapter 542: if the insurance company decides to accept a claim and properly notifies claimant, payment must be made within __ business/calendar days after _______. if the company never notifies of an acceptance or rejection, then the failure to make a payment within __ days of _____ will subject the insurer to…

Answer 98

5 business days after DECIDING TO ACCEPT.

60 days of receipt of claim

subject the insurer to a private cause of action to recover an interest penalty and attorney’s fees

Question 99

insurance code chapter 542: failrue to comply with deadlines will subject insurer to a private cause of action for:

Answer 99

1. an interest penalty on the amount due under policy, calculated at the rate of 18% per year
2. recovery of reasonable and necessary attorney’s fees incurred in prosecuting the claim

this chapter 542 private cause of action is in addition to the policy benefits payable under traditional contract principles and any recover for violation of chapter 541 or the DTPA

Question 100

what is the purpose of the Fair Debt Collection Practices Act? The FDCPA

Answer 100

enacted to promote fair debt collection practices, to provide a private remedy against debt collectors engaged in abusive debt collection practices, and to promote state law remedies consistent with these purposes

Question 101

the FDCPA does/does not preempt state law remedies unless….

Answer 101

does not preempt state law remedies unless there is a direct conflict with the federal act

Question 102

if there is a direct conflict between FDCPA and state law remedies, then…

Answer 102

there is only preemption if thee state law provides a lesser remedy or lesser protection to the consumer

Question 103

the FDCPA provides redress to any “consumer” against any “debt collector” who violates standards of conduct related to colleciton of a “debt.” how does the FDCPA define “consumer”?

Answer 103

a consumer is any natural person obligated to pay a debt

Question 104

the FDCPA provides redress to any “consumer” against any “debt collector” who violates standards of conduct related to colleciton of a “debt.” how does the FDCPA define “debt collector”?

Answer 104

a debt collector is any person who REGULARLY collects or attempts to collect debts due or asserted to be owed to another, OR someone who is in business for the principal purpose of collecting debts.

Question 105

is someone who is seeking payment of debts owed to him considered a debt collector?

Answer 105

no

Question 106

can attorney’s trying to get debt for a client be considered debt collectors?

Answer 106

if the attorney regularly collects or attempts to collect debts on behalf of clients, then yes

Question 107

examples of things that are not debt collectors

Answer 107

1. legal process servers
2. a nonprofit debt counseling service
3. an official of the government acting in an official capacity

Question 108

the FDCPA provides redress to any “consumer” against any “debt collector” who violates standards of conduct related to colleciton of a “debt.” how does the FDCPA define “debt”?

Answer 108

any obligation of a consumer to pay money arising out of a transaction which is primarily for personal, family, or household purposes.

Question 109

are business debts subject to the FDCPA?

Answer 109

hell no, bitch

Question 110

list the four broad areas covered by the FDCPA

Answer 110

1. third-party communications
2. mandatory disclosures
3. strictly prohibited acts
4. prohibited false or misleading communications

Question 111

first broad area covered by FDCPA (third-party communications): a debt collector cannot … but can …

Answer 111

a debt collector is generally prohibited from contacting third parties for the purposes of collecting a debt without the consent of the consumer. the debt collector may, however, contact third parties in order to LOCATE the consumer.

Question 112

according to FDCPA, when debt collector contacts third parties in order to locate the consumer, he: [must do, cannot do, etc]

Answer 112

1. must properly indentify himself (and, if expressly requested, identify his employer), but MAY NOT state that he is a debt collector, that he is seeking to collect a debt, or that the consumer owes a debt
2. may not communicate by post card (because it can be openly read)
3. once the debt collector knows that the consumer is represented by an attorney, the debt collector may not communicate with anyone other than the attorney

Question 113

second broad area covered by FDCPA (mandatory disclosures): there are two required notices. what is the first (related to the validity of the debt), what is the timeline, and what does it need to say?

Answer 113

a validation notice.

within 5 days of the initial communication with the consumer, the debt collector must tell the consumer IN WRITING each of the following:

1. the amount owed
2. the name of the creditor
3. notice that (a) if the consumer disputes the validity of the debt (within 30 DAYS of receipt of the notice), the debt collector will stop the collection process and get verification of that debt; and (b) if the consumer does not dispute the debt, the debt collector will assume that the debt is valid

Question 114

second broad area covered by FDCPA (mandatory disclosures): there are two required notices. what is the second, and what does it need to say?

Answer 114

notice of attempt to collect debt

this is sort of like a mini miranda warning. in the INITIAL COMMUNICATION with the consumer, WHETHER WRITTEN OR ORAL, the debt collector must inform the consumer that (a) he is a debt collector attempting to collect and debt; and (b) any information collected will be used for the purposes of debt collection.

in ALL SUBSEQUENT COMMUNICATIONS, the debt collector must remind the consumer that they are acting as a debt collector attempting to collect a debt.

Question 115

third broad area covered by FDCPA (strictly prohibited acts): what does it mean to be strictly prohibted; list and elaborate on all acts that are strictly prohibited

Answer 115

the FDCPA prohibits the following acts regardless of whether they are deceptive or misleading (i.e. strictly prohibited):

1. a debt collector should not contact a consumer at any INCONVENIENT time or place. contact made BEFORE 8 AM or AFTER 9 PM is PER SE INCONVENIENT unless the consumer has consented.
2. no communications are permitted with a consumer represented by an attorney, unless the attorney consents
3. the debt collector may not call the consumer’s place of employment if he knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication (so the exception to this one relies on the EMPLOYER’S consent rather than the consumer’s consent)
4. no communication can amount to harassment or abuse, profanity, publishing the consumer’s debts as a list to others, or causing the telephone to ring continuously

Question 116

fourth broad category covered by FDCPA (prohibitd false or misleading communications): list and elaborate

Answer 116

a debt collector may not use any false, deceptive, or misleading representations or means in connection with the collection of any debts, such as:

1. representing that they are a member of acting with government authority;
2. implying that the failure to pay the debt is a crime or that the debtor can be sent to jail;
3. misrepresenting the amount or character or nature of any debt (the amount must be fuckin exact mate);
4. falsely implying that the debt collector is an attorney

Question 117

what is the big affirmative defense that a debt collector can use if accused of violating FDCPA? explain

Answer 117

Boda fide error defense

it is an affirmative defense to a claim under the FDCPA if the debt collector can show that:

1. the violation was NOT INTENTIONAL; and
2. REASONABLE PROCEDURES had been adopted by the debt collector to ensure the violation would not happen, but it happened despite the procudures

Question 118

remedies under private cause of action provided by FDCPA include recover of:

Answer 118

1. actual damages;
2. a civil penalty of up to $1000 per case (in addiiton to the actual damages);
3. reasonable and necessary attorney’s fees.

Question 119

there are no criminal penalties under the FDCPA. T/F

however…

Answer 119

T. no crimiinal penalties. however, the FTC is empowered to investigate and bring a public enforcement action against a D within one yar from the date of the alleged violation

Question 120

what are remedies under the Texas Debt Collection Act?

Answer 120

1. actual damages
2. attorney’s fees for a succesful claim
3. in some cases, an injunction
4. for certain violations only, a civil penalty of at least $100 per violation

Question 121

the TDCA prohibits conduct by both __ and __

Answer 121

“debt collectors” and “third-party debt collectors”

Question 122

under TDCA, what is the definition of a debt collector

Answer 122

any person who, directly or indirectly, enages in debt collection.

Question 123

under TDCA, a person seeking to collect a debt owed to themselves is/is not included in the definition of debt collector

Answer 123

is (so broader coverage than the FDCPA)

Question 124

under the TDCA, a third-party debt collector is…

Answer 124

generally the same as a debt collector under the FDCPA (so cannot be a third-party debt collector if seeking payment of debt owed to yourself)

Question 125

under the TDCA, attorneys who are representing when seeking collection of debts are included/excluded from the definition of third-party debt collectors

Answer 125

excluded

Question 126

what are the prohibited practices and restrictions provided by the TDCA

Answer 126

1. threats of coercion, vilolence, or criminal prosecution against any person
2. harassing telephone calls or other types of abuse
3. unfair or unconscionable means (such as charging or collecting interest, fees, or incidental expenses unless it is specifically authorized by the contract that is the basis of the debt)
4. fraudulent or deceptive misrepresentation*

*failure to make certain disclosures is considered fraudulent or deceptive misrepresentation

Question 127

what are the mandatory disclosures provided by the TDCA

Answer 127

in the initial communication, the debt collector must state that they are a debt collector apptemting to collect a debt and any information will be used for that purpose (i.e. this is the “mini miranda”)

in subsequent communiactions, the debt collector must state that the communication is from a debt collector

so, for initial and subsequent communications, identical to FDCPA

Question 128

what are 5 differences between FDCPA and TDCA

Answer 128

1. the TDCA applies to both “debt collectors” and “third-party debt collectors”
2. the TDCA has provisions relating to credit bureas, FDCPA does not
3. the TDCA requires that third-party debt collectors and credit bereaus obtain and file with the Sec. of State a $10,000 surety bond before doing business in Texas
4. the TDCA’s prohibitions and prescriptions in its list are exclusive (if it is not in the list, it is not prohibited) while the FDCPA’s list is not exclusive
5. the TDCA provides for criminal liability in addition to civil liability; criminal liability is not available under the FDCPA

Question 129

is the bona fide error defense available under the TDCA? in what ways is it different?

Answer 129

yes it is. it is basically the same as the FDCPA.

Question 130

is the TDCA a tie-in statute under the DTPA? if so, which damages are chosen?

Answer 130

yes, it is. the combination of the two may allow a consumer to receive ADDITIONAL DISCRETIONARY DAMAGES not otherwise recoverable under the TDCA.