The Deceptive Trade Practices Act, or DTPA, is the primary consumer protection law Texans rely on to hold businesses accountable for false, misleading, or deceptive acts and practices. Consumers who successfully prove a DTPA claim may recover economic damages, and in cases involving knowing or intentional misconduct, the consumer may be awarded additional damages up to three times the value of their damages arising from the deception, along with possible attorney fees.
Considerations for DTPA Actions
Given the potentially substantial costs of losing a DTPA suit, Texas businesses have an obvious incentive to stay “on the right side of the law” by avoiding the unscrupulous practices the law describes. However, simply avoiding wrongdoing will not necessarily deter all DTPA suits, and a business may sometimes have to defend its reputation for honesty and integrity in court. Kretzer & Arnett regularly advises companies facing this type of situation.
One other point needs mentioning with respect to the DTPA. Businesses that maintain multiple divisions or locations that operate with a high degree of autonomy may occasionally find themselves confronted with a DTPA lawsuit that is based on genuinely plausible, if not always provable, allegations of deceptive practices by one of these smaller offices. In these situations, the company will need to consider options for settling with a consumer who has at least a reasonable claim, but company leadership may also want to confer with a business law attorney to discuss more extensive “damage control” strategies. Usually, the priorities here will be to repair any potential damage to their hard-won reputation and to make sure that satellite offices do not repeat the same kind of mistake and expose the company to further risk.
