Texas Consumer Fraud Laws


What are the Consumer Protection Laws in Texas?

Texas consumers have rights.  Texas has an excellent consumer protection statute known as the Texas Deceptive Trade Practices Act (DTPA).  What sets this law apart from other common causes of action is that a consumer can recover their actual damages plus attorney's fees, mental anguish damages, and up to three times the amount of damages. Mental anguish damages are generally reserved for personal injury and death cases, so this is unusual for a business matter.  Moreover, because there is a possible award of three times the amount of damages, the Texas DTPA law has real teeth that should concern the fraudsters.  A $10,000 case can easily be three times if the conduct was especially egregious.   

What is the DTPA?

The DTPA is a Texas consumer protection law that kicks in when a company or individual is dishonest about the products, goods, or property they advertise, market, and/or sell to Texas consumers.  The DTPA protects innocent consumers against “false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.”  This law applies to real estate transactions.  

To be able to sue under the DTPA, you must be a “consumer.” A “consumer” is defined as any individual, partnership, corporation, or governmental entity who seeks to acquire by purchase or lease any goods or services.  That includes real estate. 

What are Some Examples of DTPA Violations?
  • False advertisements about a neighborhood community offerings and characteristics, that later turns out to be false. 
  • Fraud in a residential or commercial real estate transaction.
  • Taking advantage of a consumer's poor English language ability in the course of a negotiation and sell.
  • False statements about the existence of competitors to entice the sale.
  • Price gouging after a natural disaster or other emergency.
  • Claiming a product is new, when it's been used.
  • False claims about maintenance, repairs or endorsements of a product later discovered to be false. 
  • False representations about the quality of a used vehicle and/or mileage, or producing a false Car Fax report. 
  • Providing a false profit and loss on a business offered for sale or investment.
  • Representing a neighborhood community center has characteristics or qualities that you find later it does not; and
  • Taking advantage of a consumer's mental disability during a negotiation and sale.

The DTPA has a laundry list of deceptive conduct that can form the basis of a DTPA claim or lawsuit.  Some of the most common violations include:

  • Passing off goods or services as those of another in violation of Texas Business & Commerce Code17.46(b)(1).
  • Causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services in violation of Texas Business & Commerce Code17.46(b)(2).
  • Causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another in violation of Texas Business & Commerce Code17.46(b)(3).
  • Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he does not in violation of Texas Business & Commerce Code17.46(b)(5).
  • Representing that the goods are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another in violation of Texas Business & Commerce Code17.46(b)(7).
  • Advertising goods or services with intent not to sell them as advertised in violation of Texas Business & Commerce Code17.46(b)(9).
  • Making false or misleading statements of fact concerning the reasons for, existence of, or amount of price reductions in violation of Texas Business & Commerce Code17.46(b)(11).
  • 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 in violation of Texas Business & Commerce Code17.46(b)(24).

The above is not an exhaustive list of all the options under the DTPA.  The complete list of deceptive acts can be found here. 

What Damages are Available Under the DTPA?

Under the DTPA, you can recover the amount of economic damages or the amount of money that you spent, incurred, or lost as a result of the deception.  Economic damages not only cover money you spent on or in anticipation of the transaction, but also can include the costs of storage, repair, and replacement.  Almost anything you spent that can be fairly elated to the business dealing can be recovered.

If the jury finds that the deceptive conduct of the fraudster (known as the defendant) was committed knowingly, the consumer may also recover damages for mental anguish, as found by the jury. 

The jury is limited to awarding not more than three times the amount of damages for mental anguish and economic damages;

You can also recover court costs and reasonable and necessary attorneys' fees.

The DTPA's 60 Day Waiting Period.

You cannot sue under the Texas DTPA right away.  The statute requires that a pre-lawsuit demand be sent 60 days before a lawsuit is filed.  A lawyer will put together a demand letter detailing the deceptive conduct and itemized damages with a deadline that payment must be made.  If its not, a lawsuit can be filed after the expiration of the 60 days. 

Is There a Deadline to File a DTPA Lawsuit?


A DTPA lawsuit must be filed within two years after the date on which the false, misleading, or deceptive act or practice occurred. If the deceptive conduct took place over a period of time, then, to be safe, you should begin suit two years from the date of the first such action.

Note, the deadline is shorter than a normal breach of contract claim.  Many times DTPA and contract lawsuits are combined.  Contract actions have a 4 year statute of limitations, but the DTPA case is only two years.  

If you believe you've been a victim of consumer fraud or misrepresentation in the course of a business transaction, or the purchase of goods or services, contact Texas consumer fraud attorney Stephanie Sherman for a free consultation.  Don't let the fraudulent seller get away with your money.  You are entitled to not only the money you are out, but attorney's fees, costs, and possibly mental anguish damages in applicable. Most DTPA Sherman Law handles on a contingent fee basis meaning attorney's fees aren't paid until the case is settled or won. 

Baum Hedlund