Deceptive Trade Practices Basics
There is a federal law known as the federal Trade Commission Act (FTCA) and many state laws known as deceptive trade acts that make the general practices of unfair and deceptive business behavior to a consumer to be illegal. In Texas, the Deceptive Trade Practices-Consumer Protection Act (DTPA) provides a series of activities that are expressly prohibited as deceptive and the DTPA allows the consumer to put the business on notice of the deceptive practice in an attempt to resolve the problem with the business.
Some Texas laws are designed to “tie in” to the DTPA so that those other laws are not only actionable as that law is itself written, but a consumer can also bring a claim based on the DTPA. The Texas version of the FCRA and the Texas version of the FDCPA are each what are called “DTPA tie-in statutes.”
Because as we already discussed the DTPA allows a consumer to put a business on notice of a problem, this notice mechanism transfers over to the tie-in statutes even if the tie in statutes themselves do not expressly provide the consumer with a mechanism to dispute to the business entity.
Unfair and Deceptive Acts and Practices (“UDAP”) or unfair methods of competition were first addressed when Congress passed the Federal Trade Commission Act in 1914. Since then, all 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands have enacted at least one statute with broad applicability to most consumer transactions aims at preventing consumer deception and abuse in the marketplace. A host of abuses at the default or collection stage of a credit transaction may fall under the UDAP category including:
collection practices by a collection agency or creditor
collection suits in inconvenient venues
Abuse of service of process
Repossession
Foreclosure