Under Texas’ Deceptive Trade Practices Act (DTPA), consumers have the right to sue businesses who promote their products or services in a fraudulent way. As an entrepreneur who aspires to operate and grow their business legally, understanding the DTPA’s policies is an essential tool that can safeguard your business from potential damages.
What is on the DTPA’s prohibited list?
There is a total of 34 prohibited business practices specified under the DTPA’s “Laundry List”. This comprehensive document is a part of Texas’ business and commerce code. Each act provides a thorough explanation of the illegal practice, helping both businesses and consumers gain valuable insight into what the violation entails.
Here are eight of those prohibited acts:
- Labeling your goods with fake geography origins.
- Selling your goods as “new” or “original” when they are repurposed or second-hand.
- Claiming that your goods need a specific part or repair service when they do not.
- Adding a “corporation” or “incorporated” at the end of your business title when it is not registered as one.
- False baiting your consumers by advertising your goods with no intent to sell them as such.
- Fraudulently announcing that your business will be closing to gain an influx of sales.
- Advertising your goods with misleading price reduction labels.
- Representing your goods with a false list of ingredients, materials, uses or quantities.
By learning about these illegal business trade acts, entrepreneurs can incorporate the proper measures necessary to ensure that their businesses can remain fully compliant with the DTPA law.
What happens if I receive a DTPA demand letter?
When one of your customers sends your business a DTPA demand letter, it is important to remain calm and cautious. Start by reviewing every detail mentioned in the letter, as well as the customer’s sought number of economic damages.
Remember, you will still have a 60-day window to come up with a course of action and respond to the demand letter. Depending on the type of complaint, you can offer a settlement or counter the claim by proceeding with trial.
By regularly checking your business operation’s practices, you can easily spot any known deceptive trade act and resolve them the right way, helping your business thrive in the market without any record of a DTPA violation.