Consumer Protection Claims Under the Texas DTPA
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The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) lets a consumer sue over one of the deceptive acts the statute lists, a breach of warranty, or an unconscionable action by any person. Before suing for damages, the consumer must give written notice at least 60 days ahead unless an exception in section 17.505(b) applies, and section 17.565 sets a two-year filing deadline. The law is Business and Commerce Code chapter 17, subchapter E, and section 17.44(a) says it "shall be liberally construed and applied" to protect consumers against "false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty."
Who counts as a consumer
Section 17.45(4) defines a consumer as "an individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires by purchase or lease, any goods or services." The definition leaves out a business consumer with assets of $25 million or more, or one owned or controlled by a corporation or entity with assets of $25 million or more.
Two other definitions frame the claim. "Goods" are "tangible chattels or real property purchased or leased for use," and "services" are work, labor or service purchased or leased for use, including services connected with the sale or repair of goods (17.45(1), (2)).
The laundry list in section 17.46(b)
Section 17.46(b) names specific false, misleading or deceptive acts, numbered (1) through (34) in the current text. For a consumer's own lawsuit, deceptive acts are "limited to the acts enumerated in specific subdivisions" of that list (17.46(d)), and the consumer must have relied on the act to the consumer's detriment (17.50(a)(1)). A few entries, quoted as the statute words them:
- (6) "representing that goods are original or new if they are deteriorated, reconditioned, reclaimed, used, or secondhand"
- (12) "representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law"
- (13) "knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service"
- (16) "disconnecting, turning back, or resetting the odometer of any motor vehicle so as to reduce the number of miles indicated on the odometer gauge"
- (22) "representing that work or services have been performed on, or parts replaced in, goods when the work or services were not performed or the parts replaced"
- (24) "failing to disclose information concerning goods or services which was known at the time of the transaction if such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed"
A violation of the Texas debt collection statute, Finance Code chapter 392, "is a deceptive trade practice" actionable under this subchapter (Finance Code 392.404(a)); the debt collection guide covers that statute.
The other grounds for a consumer suit
Section 17.50(a) allows a consumer's action when any of four things is "a producing cause of economic damages or damages for mental anguish": a laundry-list act relied on to the consumer's detriment; "breach of an express or implied warranty"; "any unconscionable action or course of action by any person"; or an act that violates Insurance Code chapter 541. An unconscionable action is one that, to a consumer's detriment, takes advantage of the consumer's lack of knowledge, ability, experience or capacity "to a grossly unfair degree" (17.45(5)).
Claims the DTPA leaves out
Section 17.49 carves out several kinds of claims:
- damages based on a professional service whose essence is "advice, judgment, opinion, or similar professional skill," though the exemption does not cover, among other things, "an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion," a failure to disclose under 17.46(b)(24), or an unconscionable action or breach of an express warranty that likewise cannot be so characterized (17.49(c));
- a cause of action for bodily injury or death or for the infliction of mental anguish, except as 17.50(b) and (h) provide (17.49(e));
- a claim under a written contract for a transaction or project involving total consideration by the consumer of more than $100,000, where in negotiating the contract the consumer had legal counsel not directly or indirectly identified, suggested, or selected by the defendant, unless the contract involves the consumer's residence (17.49(f));
- a transaction involving more than $500,000, other than one involving the consumer's residence (17.49(g)); and
- most claims against a licensed real estate broker or salesperson acting in that role, with the same misrepresentation, nondisclosure and unconscionability exceptions (17.49(i)).
A consumer's waiver of DTPA rights is void unless it is in writing and signed, the consumer is not in a significantly disparate bargaining position, and the consumer has a lawyer who was not identified, suggested or selected by the defendant (17.42(a), (b)). Section 17.42(c) adds that the waiver must be conspicuous and in bold-face type of at least 10 points, carry the heading "Waiver of Consumer Rights" or words of similar meaning, and be in substantially the form the statute sets out.
The 60-day notice before suit
Section 17.505(a) makes written notice "a prerequisite to filing a suit seeking damages." The notice goes to the business at least 60 days before filing and states, in reasonable detail, the consumer's specific complaint and what the consumer is claiming for economic damages, for mental anguish, and for expenses such as attorneys' fees incurred in asserting the claim. Within that period, the business can also ask in writing to inspect the goods involved.
Notice is not required when 60 days' notice is impracticable because suit must be filed to keep the statute of limitations from expiring, or when the claim is raised as a counterclaim (17.505(b)). A business sued without notice may file a plea in abatement not later than the 30th day after it files its original answer, and an abated suit stays on hold until the 60th day after proper notice is served (17.505(c) to (e)).
The notice period is also a settlement window. A business that receives the notice may tender a settlement offer within 60 days (17.5052(a)). If a court later finds the rejected offer for damages was the same as, substantially the same as, or more than the damages the factfinder awards, the consumer's recovery of damages is capped at the lesser of the two amounts (17.5052(g)). Once suit is filed, a party may move to compel mediation not later than the 90th day after service of the DTPA pleading, though a party cannot compel it when economic damages claimed are under $15,000 unless that party pays for the mediation (17.5051). For how the letter itself is put together, see the demand letters guide; for the mediation session, see how mediation works.
The two-year deadline
Under section 17.565, a DTPA action must be commenced within two years after the deceptive act occurred, or within two years after the consumer discovered it or, exercising reasonable diligence, should have discovered it. The period may be extended by 180 days if the plaintiff proves the delay was caused by the defendant knowingly engaging in conduct "solely calculated to induce the plaintiff to refrain from or postpone the commencement of the action." Deadlines for other Texas claims are collected in the deadline to sue guide.
What a consumer who wins can recover
Section 17.50(b)(1) sets the damages, in these words:
"the amount of economic damages found by the trier of fact. If the trier of fact finds that the conduct of the defendant was committed knowingly, the consumer may also recover damages for mental anguish, as found by the trier of fact, and the trier of fact may award not more than three times the amount of economic damages; or if the trier of fact finds the conduct was committed intentionally, the consumer may recover damages for mental anguish, as found by the trier of fact, and the trier of fact may award not more than three times the amount of damages for mental anguish and economic damages"
"Economic damages" means "compensatory damages for pecuniary loss, including costs of repair and replacement" (17.45(11)).
The court may also grant "an order enjoining such acts or failure to act," orders "necessary to restore to any party to the suit any money or property" acquired in violation of the subchapter, and other relief it deems proper (17.50(b)(2) to (4)). Under 17.50(d), "Each consumer who prevails shall be awarded court costs and reasonable and necessary attorneys' fees." The fee rule cuts both ways: if the court finds the suit "groundless in fact or law or brought in bad faith, or brought for the purpose of harassment," it shall award the defendant reasonable and necessary attorneys' fees and court costs (17.50(c)).
The attorney general's role
The consumer protection division of the attorney general's office may sue in the state's name to restrain a deceptive practice when it believes proceedings would be in the public interest (17.47(a)). Consumers can report practices through the Attorney General's General complaint form, which the office says is for complaints about false, misleading or deceptive business practices. The office states that a complaint is open to the public under Texas law and that it cannot give legal advice.
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