What is the Texas Deceptive Trade Practices Act?

Texas Auto Dealer Fraud Attorneys

The Texas Deceptive Trade Practices Act (DTPA) protects Texans against false, deceptive and misleading business practices. The Act, enacted in 1973, defends consumers against false or misleading business practices that would otherwise harm or defraud them. The DTPA provides consumers victimized by bad actors the legal means to get justice and compensation.

Are you a victim of car dealer fraud? Contact our auto fraud attorneys today. The consultation is free.

The government and private citizens can both use the DTPA’s groundwork. The Texas Attorney General can seek court orders prohibiting businesses from further deceptive practices, while private citizens can seek redress for damages caused by specific acts listed in the DTPA. Those acts include:

Taking advantage of a consumer’s lack of knowledge, ability, experience or capacity;

Passing off goods or services as another’s;

Advertising goods or services with the intent not to sell them as advertised;

Representing goods as original or new if they are actually used or otherwise depreciated;

Knowingly making false or misleading statements of fact concerns the need for parts, replacement or service;
and many other false, misleading, deceptive or unconscionable acts.

The DTPA is very broad, protecting consumers from “false, misleading or deceptive acts or practices in the conduct of any trade or commerce.” The Act defines trade and commerce as “the advertising, offering for sale, lease, or distribution of any good or service, or any property, tangible or intangible, real, personal, or mixed, any other article, commodity, or thing of value wherever situated, and shall include any trade or commerce directly or indirectly affecting” Texans.

The Act defines goods as “tangible things or real property purchased or leased for use,” and service as “work, labor, or services purchased or leased for use, including services furnished in connection with the sale or repair of goods.” The DTPA does not cover professional services rendered.

The Act protects consumers and businesses engaging in transactions large and small. It does not, however, protect business consumers with assets totaling more than $25 million or those owned by a corporation with assets totaling more than $25 million.

Notably, the DTPA makes many practices illegal without requiring proof that the defendant intended to do something illegal. This makes DTPA violations easier to prove than other types of fraud and encourages people and businesses to conduct business both legally and fairly.

Consumers can sue under the Act so long as the alleged violation falls under the DTPA’s list of prohibited conduct and they relied on that conduct to their detriment. They can also sue under the DTPA for breaches of expressed or implied warranty, an unconscionable action or certain violations of the Texas Insurance Code.

Consumers can recover economic damages after prevailing in a DTPA case. A jury may award up to three times the economic damages if they find the business committed the violation knowingly, in addition to mental anguish damages. The Act specifically states prevailing consumers “shall be awarded court costs and reasonable and necessary attorney fees.”

The Act requires a consumer to file their lawsuit “within two years after the date on which the false, misleading, or deceptive act or practice occurred.” If the deceptive act took place over a period of time, consumers should begin their suit from the action’s first date. Given that some deceptions by their nature can be concealed or difficult to detect, the DTPA allows consumers victimized by those acts to have two years after they “discover, or in the exercise of reasonable diligence should have discovered” the deceptive act or practice.

A special DTPA provision gives additional time to consumers who wait to file their lawsuit because the business engaged in conduct meant to delay the lawsuit, such as promising to fix the mistake. However it’s in your best interest to contact an attorney as soon as you feel wronged and the business fails to make good on their promises to solve the problem.

A consumer wondering “what is deceptive practice” can look to the all-to-frequent crime of odometer fraud as an example. The National Highway Traffic Safety Administration (NHTSA) estimates fraudulent odometer readings cost Americans $1 billion each year from 450,000 vehicles sold with tampered-with odometers. These obfuscated mileages conceal potential costly problems arising from road wear-related damage. Accurate odometer readings are key to the consumer’s ability to make an informed purchasing decision, and falsifying them violates the deceptive trade practices act.

High mileage vehicles often encounter problems with internal parts that wear out over time. Brake pads and discs, tires, belts, pumps, clutches and flywheels all deteriorate with use. Costs to replace these parts ranges from trivial to very expensive. These costs have decreased as of recently, because modern automobiles remain roadworthy for much longer than their older counterparts. An Automotive News article stated in 2016 the average age of an American vehicle is closer to 12 years; the highest it’s ever been. Part of that can be attributed to Americans buying cars less often because of financial concerns, but also because modern vehicles last longer when paired with regular maintenance.

A vehicle’s mileage may not be the only factor in determining its overall worth, but also how the vehicle got that mileage. A vehicle with 100,000 miles of mostly highway travel will likely have fewer signs of wear and tear than one with the same amount of mileage in the start-and-stop environment of city driving. The Texas consumer protection act forces vehicle sellers to make a vehicle’s true mileage apparent up front so consumers can make an informed purchasing decision.

Tampering with odometer readings is not just against the Texas consumer protection act but has been a federal crime since 1986, when it was codified into national law by the Truth in Mileage Act of 1986. This same trade practices act requires car sellers disclose the vehicle’s mileage when transferring ownership of the vehicle. This is done via odometer disclosure statements shown at the time of sale or transfer. One of many forms signed by auto consumers during the sale process, it is a document showing at the time of sale the buyer and seller agreeing that the displayed mileage is correct. Odometer disclosures are required on all passenger vehicles, pickup trucks, motor homes, motorcycles, and trucks with a Gross Vehicle Weight Rating less than 16,000 pounds that are less than ten years old. Anyone wondering what is deceptive practice can think of it thusly: if the person who sold you the car did so by lying to you about the vehicle or obfuscating true facts about the vehicle in any way, you may very well have a valid claim.

Certain vehicles are exempt from the odometer disclosures portion of the trade practices act, including vehicles 20 years or older, vehicles with Gross Vehicle Weight Ratings over 16,000 pounds, snowmobiles, all-terrain vehicles, vehicles that are not self-propelled, or in the case of a title transfer in which at least one of the registered owners is staying the same, except when the title submitted is from out of state.

Odometer disclosure statements have to show the odometer at the time and date of transfer. It must also show the year, make and model of the vehicle, the buyer’s name and address, and the signatures of both the buyer and seller. The disclosure must state whether the shown mileage is accurate, inaccurate, or is in excess of the odometer’s mechanical limits.

Federal rules changed on Jan. 1, 2021, mandating odometer disclosure statements for vehicles up to 20 years old. Previously the limit was up to 10 years. For example, a 2011 model year vehicle won’t be exempt from odometer disclosure until 2031.

If you have been a victim of deceptive conduct, the attorneys of Allen Stewart, P.C. can help you recover your economic losses. Don’t wait; contact us today for a free evaluation of the merits of your deceptive practices trade claim.