Trade practices are a business’ operating policy or procedure, including confidential practices that allow a business to have a leg up on their competitors. Unfair trade practices are any business practice or act that is fraudulent, deceptive, unethical, or causes an injury to a consumer. This includes practices that have been deemed unlawful, including those violating consumer protection laws. Unfair advertising is a form of unfair trade practices that occurs when a business misrepresents a product, service, or price. Businesses that employ unfair trade practices can be liable for hefty fines and penalties.
These practices must cause or be likely to cause substantial injury to a consumer, must not be reasonably avoided by consumers, and cannot be outweighed or offset by any benefits it offers the consumers or competition.
These laws can be incredibly specific and don’t necessarily appear intuitive at the surface. They don’t always automatically register as being “unfair” or presenting harm to consumers. Many well-meaning business owners may inadvertently commit unfair trade practices when trying to drum up new business or bring a flailing business back to life. That’s why it’s especially important for business owners to be aware of what constitutes and unfair trade practice so they can avoid any liability.
Texas’ Deceptive Trade Practices Act
The Texas Deceptive Trade Practices-Consumer Protection Act, or the “DTPA”, is a powerful piece of legislation that protects consumers of goods and services (including real estate). It allows them to seek relief in the form of economic damages when businesses selling those goods and services operate with “false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.”
This act is enforced by the Texas Attorney General. Consumers, under the act, aren’t just people. They can also be partnerships, businesses, corporations, or even government agencies. Claims under the DTPA have a two-year statute of limitations. That means that, with limited exceptions, all claims must be brought within two years of the deceptive trade practice taking place.
The act, under Texas Business and Commerce Code, gives a long list of 34 prohibited acts, known as the “laundry list” that are considered false, misleading, or deceptive practices. Texas business owners and operators should carefully review all of them in ensuring proper business practices.
Common Unfair Trade Practices
While it is important to review the list of unfair trade practices in Texas in its entirety, as well as any other applicable federal or state statutes for businesses that operate beyond Texas, some of the most common forms of unfair trade practices include:
- Misleading or false advertising, including false statements, leaving out pertinent details, or advertising goods that are no longer available. Businesses can’t greatly exaggerate the benefits of their products or fabricate information.
- Overcharging or price-fixing with competitors. This includes hidden fees and undisclosed charges.
- Giving misleading price information.
- Commercial fraud involving dishonesty and criminal activity. It is important to note that overstating company profits is a form of commercial fraud.
- Commercial misrepresentation by making false or misleading statements to a consumer. Misleading statements don’t have to necessarily be false, they just need to know that they may mislead a reasonable consumer into believing something untrue.
- Defamation of market competitors to reduce competing sales or a competitor’s reputation.
- Taking advantage of a consumer’s lack of knowledge, ability, experience, or capacity. This includes consumers who are particularly vulnerable, such as those who speak English as a second language or are elderly.
- Faking endorsements, affiliations, or connections.
- Offering unfounded guarantees and warranties that won’t be honored as they are represented.
- Selling used, reclaimed, refurbished, reconditioned, deteriorated, or otherwise older goods as new.
- Passing off goods or services as something they are not.
- Making false statements as to the quality of goods and their potential need for repair.
- Misrepresenting the source of the goods or services.
- Advertising an untrue quantity of goods.
- Fraudulently claiming that a company is going out of business.
Texas Unfair Trade Practices Defense Attorney
The Benjamin Law Firm, led by Attorney Brock Morgan Benjamin, offers comprehensive civil litigation services with significant experience litigating cases involving unfair trade practices. Our office is based in El Paso, but we proudly serve clients across Texas. Contact us or call us at (915) 301-9028 today so we can get started planning your defense. También podemos ayudarte en español.
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