Most states, including Texas, prohibit businesses from using false and misleading advertising practices. Texas has not adopted the Uniform Deceptive Trade Practices Act as many other states have done, but it has a unique, comprehensive law addressing false and misleading advertising. The Deceptive Trade Practices Consumer Protection Act (DTPA) outlines illegal advertising and trade practices in Texas.
There are various forms of deceptive trade practices under Texas law. Each form of deceptive advertising practice shares one thing in common, however. All of these false and misleading practices are designed to lure potential customers or clients into purchasing products or services based on misleading or untrue information.
Bait and Switch Advertising
Bait-and-switch advertising is a type of consumer scam that occurs when an advertiser attempts to lure a customer into a store based on an exceptionally priced item. Once the customer has arrived in the store, the advertiser will pressure the customer to purchase a similar item that is not as valuable. In the end, the advertiser wins because they have sold an item at a reasonable price.
This tactic is deceptive for consumers who think they can go into the store and purchase the advertised item at a highly discounted price. In many cases, an advertiser or seller will not even have the product advertised online or in print marketing in the store. For example, a car dealership could advertise a 2015 Honda Civic with very low mileage for $8,000. When a customer comes in, the car dealership may claim that a particular car has already sold. They may offer the customer another 2015 Honda Civic for the more reasonable price of $15,000.
High-Pressure Sales Tactics
Using high-pressure sales tactics is illegal in Texas. Unfortunately, many lower-income, minority, and elderly homebuyers are targets for high-pressure loan officers. These loan officers might encourage homeowners to lie about their income to secure a home loan, knowing that the borrower will struggle to pay the mortgage.
Or, they may charge unnecessary fees and pressure borrows into dangerous, high-risk home loans. Sometimes salespeople will use high-pressure tactics to sell homeowners home improvements and then finance the improvements at extremely high-interest rates. Predatory home loan companies will pounce on vulnerable people in desperate situations and exploit them through high-pressure sales tactics.
Low Stock Scams
Another type of false advertising practice involves low stock scams. In these types of scams, sellers will list an item at an exceptionally low price. However, the seller will only stop a few items at such a low price. The seller knows that they will run out of stock immediately after the advertisement runs. The seller benefits because they only have to sell a few items at an exceptionally low price. The seller will then sell the items at a regular price to customers who come to the store to buy a low priced item.
Sellers will often list the number of items they have in stock in their advertisements. Doing so is an attempt to avoid being charged with deceptive trade practices under Texas law. However, most sellers will only advertise the number of items they have in stock in the fine print.
Artificially Inflating Prices During a Disaster
During natural disasters, businesses cannot artificially inflate their prices. Companies cannot take advantage of natural disasters like hurricanes and tornadoes to sell food, medicine, fuel, or any other necessity at an excessive or exorbitant price. Gouging customers for gasoline, bread, or bottled water before a hurricane is a violation of the DTPA. Once the governor of Texas has declared a national emergency, sellers must refrain from price gouging on essential items. If not, they will face penalties under the DTPA.
In Texas, false advertising is illegal. False advertising is a broad category, but it involves any false statements related to a seller’s product. False advertising can also include making false statements about a competitor’s product to take his or her customers and business. Typically, only objective statements violate Texas’s false advertising laws. For example, suppose a car salesman states that a car gets better gas mileage than it does. This would be a clear-cut case of false advertising.
However, subjective advertising claims can also violate Texas’s false advertising laws. For example, suppose a seller promotes a car as the “best value for your money” or promotes a product as “professional-grade.” In that case, you may still be able to file a claim against the seller for false advertising. Keep in mind that the more subjective the claim, the more difficult it is to prove false advertising.
Penalties for False and Misleading Advertising in Texas
Under Texas law, victims of false and misleading advertising are entitled to actual damages and treble damages. Courts can award victims injunctive relief, attorneys fees and costs, and restitution. There may be additional remedies available through other laws. Additionally, courts can award restraining orders against the offender and issue civil penalties up to $2,000 per violation, not to exceed $10,000. The penalties become harsher when the consumer victim is age 65 or older, and courts can award $10,000 per violation up to $100,000.
Contact a Fort Worth False and Misleading Advertising Lawyer Today
If you are involved in a DTPA claim, you need an experienced lawyer on your side. Consulting with an attorney will make the legal process run more efficiently. Attorney Steven Jumes has an in-depth understanding of the DTPA and knows how to litigate your claims properly. He will ensure that you plead and prove your claims in court. If you are open to a settlement agreement, he will negotiate strongly on your behalf. Contact the Law Offices of Steven Jumes today to schedule your initial consultation.