Deceptive Trade Practice Act or DTPA
When faced with a potential consumer fraud issue, most people wonder what laws are available to them. The most commonly used law is the Deceptive Trade Practices Act (“DTPA”). The DTPA is a law that exists in every state that allows a party to go after a business that has deceived them. The DTPA is a very broad law that is designed to cover as many possible situations as possible since the law cannot anticipate every situation where fraud is committed. As a general rule, it is said that if something seems to be fraudulent then it is prohibited by the DTPA. Even though the DTPA covers “fraudulent” business activities, it does not require that you prove actual fraud which makes it a much more practical and easier cause of action to bring. Proving actual fraud, i.e. the specific mindset to commit fraud, is very difficult and is generally not used in consumer fraud cases. Instead of proving actual fraud, all you need to do is prove that the defendant’s conduct, generally speaking, was false, misleading, or deceptive.
Many States Have Similar DTPA Laws
In Texas, when you are claiming a violation of the DTPA, you are required to send a letter that complies with the Texas DTPA which spells out the facts supporting your claim and the law. You must give the alleged violator of the DTP 60 days to respond and resolve the dispute. If after the 60-day period, the dispute is not settled, you can then file a lawsuit. It is very common for these disputes not to be resolved in the 60-day period and for a lawsuit to be filed. In my experience, most DTPA letters that we send in automobile fraud cases do even receive a response. The reason for this is, in my experience, that for the longest time, attorneys would send DTPA demand letters but never follow up and file suit. Even worse, when lawsuits were filed, when the dealership would force the case to be moved to arbitration, because there was an arbitration clause in the sales contract, many attorneys would simply dismiss the case rather than fighting the case in an arbitration. As a result, auto dealerships would not be concerned when they received a DTPA demand letter from an attorney.
If car dealerships aren’t afraid of DTPA demand letters, then why send them? The DTPA is a very powerful tool for plaintiffs. The DTPA allows a plaintiff to collect emotional distress damages. While it helps to have a doctor, psychologist, or psychiatrist that you have seen because of the offending conduct testify to the distress you have suffered, emotional distress damages can also be proven by your testimony or others close to you, e.g. your spouse, who personally saw or experienced the distress that you suffered. The Texas DTPA also allows you to recover the attorneys’ fees and costs that you incurred to prosecute the case. This is known as “fee-shifting” since it shifts the plaintiff’s attorneys’ fees to the defendant. This is necessary because these cases can be very expensive to litigate, and most plaintiffs don’t have the financial ability to pay an attorney to handle the case. The fee shifting portion of the DTPA is the reason that auto dealership cases are usually handled by attorneys on a hybrid fee structure, meaning that the plaintiff pays their attorney a smaller upfront fee with the attorney collecting the majority of their fees and costs from either the settlement or judgment issued in the case.
What’s Specific or Special About The Texas DTPA?
The biggest benefit of the Texas DTPA is that if the defendant’s (in this case the dealership) conduct is found to be willful and intentional, the trier of the case – either the judge, jury, or arbitrator – can award treble damages. Treble damages means that your damages, actual and emotional, can be times by 3. This means that if your actual and emotional damages are $10,000 and the defendant’s conduct is found to be willful and intentional, you will be awarded $30,000 plus attorneys’ fees. The attorneys’ fees are not trebled. Treble damages are not guaranteed even if the conduct is found to be willful and intentional and is up to the trier of fact.
The Texas DTPA is a powerful tool for consumers who have been misled or defrauded by a business. If properly followed and used correctly, consumers can recover substantial financial damages from businesses, however, since the DTPA has numerous specific requirements that must be followed, it is important to retain an experienced attorney to represent you in a potential DTPA lawsuit.
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