The forms of deception that can occur in commercial transactions are limited only by the imagination of a dishonest purveyor, with subtle half-truths capable of inflicting harm no less than outright lies. It is not possible to anticipate all the ways a bad actor can mislead others—especially in this age of virtual business and online manipulation—but also important not to delay if you think you may be a victim.
That is because the Deceptive Trade Practices Act (DTPA) in Texas has a two-year “statute of limitations.” A lawsuit must be filed within two years of the fraudulent sale, lease, repair, service, or other offending conduct. The time period can be paused or extended in some instances, such as if it was not possible to discover the deception earlier, but the risk of failing to act promptly can be a loss of all rights to vindication as a policy of the law in preventing stale claims.
As with all legal issues, it is prudent to seek help from an attorney soon as any questionable matter is identified. That is all the more true in connection with deceptive trade practices due to the additional impact of mandatory pre-suit notice and other time-sensitive considerations.
What Counts as Deceptive Conduct in Texas?
The Texas Deceptive Trade Practices Act (DTPA) protects consumers and small businesses from a variety of unjust activities, with common examples including:
- Home or business sellers that fail to disclose deficiencies with a property
- Car dealers representing a junk vehicle was in a better condition
- Charging a greater base price due to credit, to conceal unlawfully high interest
- Falsely labeling or advertising the origin, contents, or ingredients of a product
- Misrepresenting the uses or benefits of a good or service
- Using fake reviews and not disclosing when one is a paid endorsement
- Suppressing negative customer reviews
- Lying about the need for repairs to a product, home, or vehicle
- Knowingly misleading you about rights or terms in your contract
- Failing to honor a warranty (whether express or implied)
- Stringing one along until the time period for a warranty expires
- Promising one thing while intending to substitute something else later on
No law could predict each and every way a seller might be devious, however, so the DTPA also provides a catch-all making any “unconscionable” act or practice unlawful. That can happen whenever one takes advantage of others’ comparative “lack of knowledge, ability, experience, or capacity to a grossly unfair degree.”
Identifying and Proving Deceptive Trade Practices
One issue that persons harmed by unethical businesses may encounter is even finding out they were duped, especially when it happens in subtle ways. Sometimes it does not become clear until well after a transaction what was untrue or unfair, or the other side may be adept at giving excuses and explanations.
For example, in unfair insurance practices, policyholders are regularly led to believe—by commercials on television to start and then by an insurance agent, broker, or adjuster after a claim arises—that the insurance company is there to look out for their best interests and act as their intermediary. Ultimately, an insurance company is looking out for their own bottom line. A claim may be denied in part with the adjuster emphasizing what was accepted to make it look like they went above and beyond what is normal or required to help you, when in reality that is far from true.
Because it takes time to build a case involving deception—with much of the key information in possession of others—it is usually a good idea to consider legal consultation when you have a valid suspicion as to whether you were misled or taken advantage of in some way. An experienced litigation attorney can help you answer that threshold question by helping to spot discrepancies.
The good news for consumers and small businesses who fall prey to deception is that proving a DTPA case can be somewhat easier than other types of claims. Unlike a common law case of fraud, for example, there is usually no requirement under the DTPA to prove a seller intended to deceive. A successful case can rest simply on establishing an unfair result occurred due to a practice deemed to be improper, or because a consumer’s lack of knowledge or experience was exploited.
If, however, it can be proven the seller’s actions were done knowingly or intentionally, then you could be awarded additional damages – up to three times the actual loss (“treble damages”) as a means of punishing offenders and discouraging future misconduct.
Is It Too Late to Bring My DTPA Claim?
As noted, the DTPA has a statute of limitations extending two years. That time is fixed by law, with only one exception in the statute itself expanding the period up to 180 days if you can show the other side knowingly induced you not to file suit within the two-year period in the hopes of running out the clock. See Tex. Bus. & Comm. Code § 17.565.
But the clock does not always start ticking from when the false, misleading, or deceptive act or omission occurred either. It starts instead at the point of “accrual” of a claim, which means when a person is first legally entitled to bring suit. Often it is not possible to know one was deceived until much later after a sale, lease, or other transaction. The DTPA thus provides that the statute of limitations starts from either when the violation occurred or, else, “after the consumer discovered or in the exercise of reasonable diligence should have discovered” the violation.
That is part of the reason why it is important to consider getting a legal consultation once you even suspect something is wrong. That may be when the period starts.
A few other laws and equitable doctrines in Texas can “toll” (meaning put a pause on the running of) the period, but those are fairly limited. They include:
- During the time a plaintiff was under a legal “disability,” which does not mean physical disability but instead someone who is a minor under age 18 or of “unsound mind” (i.e., incompetent)
- While the plaintiff was deployed in the military for active service, due to the Servicemembers Civil Relief Act
- Death of the person harmed by deception, which can toll limitations for up to 12 months to allow appointment of a personal representative of the estate, at which point the tolling stops even if less than 12 months
- The defendant was legally “absent” from the state, preventing service of process during some period of time
- A dismissal for lack of jurisdiction if a good faith mistake was made about the proper place to bring suit (which sometimes occurs when a person brings suit themselves, “pro se”), so long as the suit is brought in a court of proper jurisdiction within 60 days after dismissal
- Hughes tolling, for while a plaintiff is legally barred from bringing suit
- American Pipe tolling, which stops the statute of limitations for putative class members while class certification is pending
Time Is of the Essence
The DTPA in Texas is broadly designed to apply to most consumer and small business transactions and has powerful remedies intended to discourage and rectify deceptive practices. This works in favor of a victim, but requires acting promptly as well given the policy in Texas of otherwise protecting and encouraging business activity.
Beyond the two-year statute of limitations itself, it is important then to take action once you suspect any wrongdoing as well because it will naturally take some time to investigate, gather evidence, and determine the proper damages. That has to be done within the two-year period also because the statute requires giving a defendant pre-suit written notice at least 60 days before bringing suit. The purpose is to give the business an opportunity to inspect and assess things itself, then offer to compensate the plaintiff if so inclined, which allows them to further avoid the risk of treble damages.
If you have been the victim of a deceptive trade practice in Texas, consulting with an attorney promptly is a crucial first step to compensation. Wright Commercial Litigation has dealt with all kinds of deceitful actors in many different types of industries and transactions: business purchase and sales, investments or acquisitions, repair services, consulting, false advertising, and much more. In appropriate cases the firm can offer to work also on a hybrid contingency fee basis in which the costs of litigation are greatly reduced for those who have been wrongfully harmed.
Contact the firm here to request an initial consultation on your DTPA dispute.
