Consumer Law Flashcards

1
Q

How should the DTPA be construed?

A

The DTPA shall be construed liberally & applied to promote its underlying purposes which are to protect consumers against false, misleading, & deceptive business practices & generally cannot be waived.

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2
Q

Who is a proper party under the DTPA?

A

Only a consumer is a proper plaintiff in a DTPA action. A consumer is any entity who seeks or acquires by purchase or lease, any goods or services, except that the term does not include a business consumer that has assets of $25 million or more.

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3
Q

What is the test for consumer status of a person that did not purchase goods or services?

A

Whether there was a good faith intent to purchase & the ability to purchase.

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4
Q

When can a third party be a consumer?

A

When a third party is an intended beneficiary, they acquired the item. When they are an incidental beneficiary, they did not.

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5
Q

What does goods & services include for the DTPA?

A

It includes all goods & services, even real estate. It does not include money or intangibles. It may include money (“pure loan”) if it is an essential part of a transaction for goods.

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6
Q

What are the exceptions to DTPA liability?

A

Business consumers, large transactions [not for homes; $100k+ if C had a L & signed the K; $500k +], newspaper advertisements published w/out knowledge, professional services, & PI (but not really)

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7
Q

Explain the professional service exemption to DTPA.

A

Nothing in the DTPA shall apply to a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill. The test is what is the essence of the service provided. Even a professional service is subject to the DTPA for material misrepresentation, a failure to disclose information, or an unconscionable action that cannot be characterized as advice, judgment or opinion.

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8
Q

Are personal injury damages recoverable under the DTPA?

A

Only under the general damage provision of 17.50(b) or the actual damage standard for tie-in statutes under 17.50(h).

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9
Q

Explain the large transaction exception to the DTPA:

A

The DTPA does not apply to a claim arising out of a written K if the K relates to a transaction, project, or set of transactions related to the same project involving consideration by the consumer of more than $100k. The consumer must be represented by an attorney & the K must not be for a home. If the transaction is for more than $500k DTPA does not apply except for the sale of residence.

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10
Q

Who may be sued under DTPA?

A

A consumer may sue anyone who violates the act; but the act complained of must occur “in connection with” a consumer transaction. There is no privity requirement. The test is whether the misrepresentation reached the consumer.

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11
Q

What 4 claims are available under the DTPA?

A

1 – the use by a person of false, misleading or deceptive practice that is on the laundry list, & relied on to the consumer’s detriment.
2 – Breach of an express or implied warranty;
3 – any unconscionable action or course of action by any person; or
4 – an act or practice that violates ch. 541 of Ins. Code. These acts must be a producing cause of mental anguish or economic damages.

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12
Q

In general what types of acts are on the laundry list?

A

General misrepresentations, misrepresentations about legal rights, & failure to disclose. There is no requirement for knowledge or intent unless the DTPA requires it.

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13
Q

What is the definition of DTPA unconscionability?

A

An act or practice, which to the consumer’s detriment, takes advantage of the lack of knowledge, ability or experience or capacity to a grossly unfair degree determined at the time of transaction.

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14
Q

Give examples of implied warranties that may give rise to a DTPA action:

A

UCC warranties, implied warranty of suitability in commercial leaseholds; Implied warranty of good & workmanlike performance; Implied warranty of habitability

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15
Q

What defenses are available in a DTPA action?

A

Negation of producing cause, mediation/arbitration clause, & statute of limitations (2 years).

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16
Q

What is required before filing a DTPA suit?

A

Notice to the defendant must be given 60 days before suit is filed. It must include the complaint, damages, & attorneys fees. The defendant can offer settlement that includes an amount of money (reduced to cash) to settle consumer’s claims & a separate amount to pay the attorney. Rejection of a reasonable offer limits a consumer’s recovery of damages.

17
Q

What is producing cause?

A

Producing cause is an efficient, exciting, or contributing cause which in a natural sequence, produced injuries or damages complained of. A producing cause is a substantial factor which brings about the injury & w/out which the injury would not have occurred.

18
Q

What damages are available in a DTPA action?

A

Under the basic DTPA, you get economic damages & if you prove knowingly you get mental anguish damages plus up to 3 times economic damages. If consumer proves intentionally, they can recover up to 3 times the total of economic & mental anguish damages.

19
Q

When can defendants recover attorneys’ fees under DTPA?

A

Only if the court finds the claim to be groundless or brought in bad faith or solely for the purpose of harassment.

20
Q

Who is a debt collector for federal debt collection act?

A

Any person who uses any instrumentality of interstate commerce to collect a consumer debt for another person. Or a debt collector collecting his own debts under a different name.

21
Q

Under federal debt collection law, what communications are prohibited w/debtor?

A

There are time & place restrictions (not before 8am or after 9pm or when inconvenient); can’t talk to them once they are represented by an attorney; can’t call them at work once you are told that the employer prohibits such calls.

22
Q

Under federal debt collection law, what conduct is prohibited?

A

Harassment or abuse generally, false or misleading representations, & unfair or unconscionable practices.

23
Q

What are the remedies for federal debt collection violations?

A

The private COA has a 1 year SOL. Debt collector is liable for actual damages & punitive damages up to $1000. When brought as a class action, actual damages for all class members cannot exceed $500k or 1% of the debt collector’s net worth.

24
Q

What conduct violates Texas Debt Collection Act?

A

Threats or coercion, harassment & abuse, unfair or unconscionable conduct, or fraudulent, deceptive, or misleading representations. Also a tort in Texas.

25
Q

Who is covered under the Texas debt collection act?

A

A consumer – an individual w/consumer debt.

26
Q

What are the penalties for the Texas debt collection act?

A

Criminal misdemeanor penalties of $100-500 per violation. Civil remedies – actual damages, injunctive relief, & attorneys’ fees. In very limited circumstances there may be a $100 recovery for each violation. If the person is a consumer, they can recover under DTPA as a tie-in.

27
Q

What are tie in statutes, & what is their relationship to the DTPA?

A

A tie in statute regulates false & misleading acts in connection with ____. If the person involved is a consumer, the DTPA will apply. If the DTPA applies the consumer gets actual damages instead of economic damages.

28
Q

What are the most common violations of Insurance Code Chapter 541?

A

Misrepresentations & false advertising of policy contracts; defamation of a competitor; unfair discrimination; & unfair settlement practices (failing to attempt in good faith to effectuate a prompt, fair & equitable settlement of a claim once liability has become reasonably clear.

29
Q

What conduct violates the unfair claim settlement practices act?

A

This statute deals w/prompt payment of claims. An insurer must respond to notice of a claim w/in 15 days if they are a primary insurer or 30 if they are surplus. They must accept or reject the claim w/in 15 days of their response. If they are unable to accept or reject they may extend up to 45 days. Failure to accept or reject will subject insurer to penalty. Payment of claims must be prompt after acceptance. Violation results in a statutory penalty of interest, plus attorneys fees.