The Deceptive Trade Practices Act and The Fair Debt Collection Practices Act - Assignment Example

USA Consumer Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 30, 07, 2010 Part I Question A 1. Economy 2. Requires claims for pure loss must be brought in contract not tort 3. The transaction must be over $50 4. 4 years 5. Stocks and bonds 6. Let the buyer beware 7. 50,000,000 8. American 9. Never call a consumer once the consumer tells the debt collector that that the employer does not allow such calls 10. None of the above 11. Owes more than her house is worth 12. None of the above 13. 60 days 14. All of the above 15. Damages for medical bills 16. An attorney suing to collect a debt owed a Visa 17. Attorney’s fees 18. 60 days 19. Consumer Financial Protection Bureau Act 20. Net worth of the defendant Part I Question B 1. True. Though the boy did not buy the toy himself, he was the beneficiary because his father bought it for the boy’s use and not for any other person’s. The boy was the intended and not an incidental beneficiary of the toy. 2. False. A review of one’s credit reports copy only helps identify cases of erroneous billing. Identity theft is prevented by keeping and using the card safely. 3. False. The Jury in the American trial decides only on issues of fact. They are only required to hear evidence, render verdicts or award damages without asking questions. Judges are the ones who deal with matters of law. 4. True. In proximate cause, one has to prove that if the action that was not performed would have been performed, the outcome for which damages are being demanded would not have occurred. Proving this is not easy at all. 5. False. Whereas it is easier to pay for online purchases using credit card, the card information could be accessed by hackers who could use it fraudulently. It is possible that the information could be stored somewhere, or somebody from the company one is buying from might do mischief with the card information. Identity could easily be stolen. 6. True. Arbitration is meant to provide a less costly forum of dispute settlement than the normal court process. When it becomes costly, those who cannot afford might be denied the services. 7. False. Apart from the consumer or user of the product, other people who might have no direct relationship with the product such as injured guests and bystanders could also sue for damages the product might cause. 8. False. The FACTA entitles the consumer one free copy of her credit report from credit bureaus only once a year. 9. False. A business with assets worth $25 million and above or the owned and controlled by a corporation or body with assets worth $25 million and above is exempted from the Texas Deceptive Trade Practices Act. 10. False. UDAP means Unfair and Deceptive Acts and Practices of competition. It is meant to protect consumers against fraud and exploitation. Part II Question A The Deceptive Trade Practices Act (1973) was established in order to shield consumers from unfair, deceptive or misleading businesses in the actual or intended acquisition or purchase of goods and services. In the Casey case, it is evident that the house was sold to her using deception, and there are certain claims she could have under the DTPA. Among the claims she could make are under the laundry list which include general misrepresentations and failure to disclose. Casey could also claim for unconscionability and breach of warranty (Alderman 2005). General misrepresentation arises when the seller gives misleading information about the goods or services he intends to sell. It also involves withholding some vital information which is necessary in helping the buyer make the decision on whether or not to bur a product or service. We are told that Casey looking for a new house to buy, and that she had never owned one before. When she sees a house that had been repainted and looked perfect, she must have thought the house was new hence, her decision to buy it. This fact is strengthened by the fact that she found the price of the house to be lower than that of the other new houses she had looked at. The seller did not disclose that the house was indeed secondhand and had just been repainted. This is deception on the part of the seller. If the buyer had known that the house had been previously owned, she would possibly not have bought it. Casey came to learn later from somebody else that the house had been previously used by Casey’s mother who was brutally murdered inside it. The seller had not disclosed this information to Casey. Her decision to buy the house was based on lack of this vital piece of information. When Casey learns about it, she is so affected that she starts experiencing nightmares and even loses her job. It is possible that if the seller had told her that his mother had been killed therein, she either have not bought the house or if she had insisted on buying it, she would have been psychologically prepared to stay in it. The advertisement that the seller puts out says the house is in ‘excellent condition.’ He does not say it is used. It can be said that apart from giving misleading information that the house was in excellent condition, he also failed to state that it was secondhand. Casey therefore bought the house based on misleading information about the house. Repainting the house was meant to have it pass off as new, which is deception. Related to this, is the issue of price reduction. Casey is said to have bought the house at $300,000 way below the market rates. The seller does not disclose to Casey why the price is this low. Another form of misrepresentation occurs when the seller fails to disclose information which is in his knowledge, and which he knows that if the buyer knows about it, he would not buy the product. The seller in Casey’s case knows that his mother was killed in the house, possibly an indication of insecurity in the area, but he does not disclose this to Casey. Similarly, she failed to tell her that the house was freshly painted because it was secondhand. He knows that if Casey had known about it, she would not have bought the house. Another claim that Casey could make is referred to as unconscionability. This happens when the seller takes advantage of the buyer’s lack of knowledge, experience, ability or capacity to a very unfair degree. The buyer must however prove that the seller took advantage of him at the time the contract was being sealed. It is evident that Casey was taken advantage of by the seller. Firstly, Casey was new in the country, having recently moved from France to Texas. She was desperately in need of a house, a vulnerability that the seller took advantage of. Her newness was also disadvantageous because she was not well versed with housing trends in Texas. We are also told that she had never owned a house previously, hence lacking the experience needed to differentiate between a used and a recently painted house. Casey does not also understand English well, while the seller is said to have opted for the real Texan accent which is difficult to understand. This must have hindered Casey from asking many questions, or that communication between the two was limited. It could be said that choice of accent and failure to clarify certain issues was deliberately meant to disadvantage Casey and rush her into making the purchase. The one hour taken to view the property and the rushed signing of the contact was also suspect. All evidence point to the fact that Casey was unfairly taken advantage of by the seller. There are a number of damages that Casey could recover from these claims under the DTPA. These include, mental anguish and any other damages the court may deem fit. Casey suffered severe emotional and mental anguish which led to her lose of job after establishing that the seller’s mother had been murdered in the house. She experienced nightmares whereby her sleep was disrupted. The judge could establish the extent of mental anguish she suffered from and award commensurate damages. These damages are three times. Casey has been trying to sell her house without success. She had however bought it under deception. The judge could order the seller to repossess the house and refund Casey’s money. It is also said that as a result of distraction, Casey has lost her job and livelihood. If it is established that the mental anguish was intentionally caused as it was, the judge could order the seller to pay Casey for the lost earnings three times. Casey could also claim for her attorney’s fees where it is deemed reasonable and necessary. Such fees are awarded on hourly basis. Question B The Fair Debt Collection Practices Act (FDCPA) was enacted to protect consumers from abusive practices perpetrated by debt collectors, enhance fair debt collection practices, provide consumers an avenue of disputing any inaccuracies and request for validation of debts they are said to owe. This act gives guidelines that regulate the conduct of debt collectors, lays out credit consumers’ rights and spells out the various remedies and penalties to be meted out to violators (Alderman 2009). From the Carey case, has defaulted in settling the debt for the TV set and the oven. The two companies that have been contracted to collect the debt, GBH and RGM are engaged in acts that violate the Act, and for which Carey could make some claims and if possible, ask for some damages to be awarded if she prevails. RGM is said to have written a letter to Carey asking her to pay the debt owed within 30 days or else she the company would send the Sheriff to arrest and jail her. If this was the initial communication between the two parties, it was wrong on the part of RGM because the initial communication is meant to provide the consumer with a notice. The debt collector is not permitted to threaten to arrest a consumer, or take legal action against him. RGM, in its initial communication, is said to have threatened to have Carey arrested by the Sheriff. This is a violation of the act, for which Carey can seek legal redress. The FDCPA also bars debt collectors from communicating with third parties with the aim of revealing or discussing the debts owed, unless if the communication is meant to help them trace the whereabouts of the debtor. The only communication allowed is with the debtor’s attorney or his spouse. RGM is said to have contacted Carey’s mother and father and talked to them about her debt. Since this is not acceptable, Carey could file a law suit against the company. FDCPA does not allow the use of a language that is abusive or profane when communicating with credit consumers when the communication relates to the debt they are trying to have him settle. RGM is said to have called Carey a deadbeat. This is actually abusive, and contravenes the Act. Carey could sue the company for damages. GBH, working on behalf of the company that had hired out the TV set to Carey is said to have used the same tactics used by RGM. Back to the FDCPA, the debt collector is prohibited from threatening to garnish, seize or attach a consumer’s property in a bid to settle the debt, unless such action is authorized by the court of law. RGM is said to have written her a letter threatening to take possession of and dispose her house if she does not pay the debt promptly. Similarly, the Act compels debt collectors to establish contact with the debtor and give him a notice. Further, the company should give the consumer a 30 day period within which to pay so that if there is any dispute, the consumer can raise it for validation of the debt. Asking Carey to pay up promptly is prohibited. As earlier stated, debt collectors are prohibited from contacting third parties and disclosing the details of the debt, or engaging in abusive language with the said third parties. RGM is said to have contacted Casey’s mother and told her about Casey’s debt. The company blames Carey’s mother for being a bad mother for raising a daughter who could not pay her bills. This is rather abusive and contrary to the stipulations of the Act. Further, this information is erroneous because RGM is supposed to restrict communication to the debt Carey owes the TV Company. Carey has not refused to pay, but she is simply going through tough economic times. FDCPA prohibits debt collectors from harassing consumers, threatening them or using abusive language and intimidation. They are obligated to discuss with consumers who wish to enter a discussion with them on how they plan to repay the debt. Both debt collectors are said to have yelled at Casey when she called them to work out a flexible repayment plan. They abused her and demand for full payment otherwise, they would garnish all her property. This is not accepted by the Act, and if Casey feels aggrieved, she could sue for damages. Asking her to pay soon goes contrary to the 30 day period allowed before payment can be demanded. These are some of the areas which Casey could consider when seeking for legal redress against the two companies. There are a number of claims and damages that Casey could ask the court to grant and recover if she prevailed. Casey could institute a private suit in the federal or state court for the award of statutory damages, actual damages, court costs and attorney’s fees. It is said that Casey is so disturbed that she can neither eat nor sleep, and has closed down her business, leading loss of livelihood. She could therefore sue for the pain and anguish the conduct of the two companies caused her. The judge may order the companies to pay her $1,000 even if she fails to evidentially prove that she suffered actual damages, because FDCPA falls in what is referred to as the strict liability law. Casey also lost her job and by extension, her wages because for the two companies. If she incurred any medical costs because of the two companies, the court might order that she gets a reimbursement of the medical bills. Casey could also be awarded a reimbursement of her attorney’s fees arising from the suit. All these are only possible if the debt collectors fail to convince the judge that their violations were not intentional. Should Casey fail to prevail, she could be ordered to reimburse the two companies’ attorneys’ fees. Question C Bob and Mary’s case falls under the property liability law. Each of them bought Toyota 2010 car. Whereas Mary’s car crushed and got irreparably damaged besides seriously injuring her leading to her hospitalization, Bob got scared of his car and sold it at a price less by $2,000. If each one of them chose to sue Toyota Company, they could make certain claims and requests for various damages which the court could grant if they prevail. Legal claims on product liability law are based on strict liability, negligence and breach of fitness warranty. This kind of liability is common in motor vehicles and medical supplies. It looks at the design defects which existed prior to manufacture of the product, manufacturing defects which occurred at production time or marketing defects arising from incorrect instructions and warnings. In product liability law, negligence is said to occur when an individual or manufacturer of a product fails to exercise reasonable, ordinary or proper care in the manufacturer of a product. This is an entity that is legally obligated to do that which he fails to do and whose result could lead to injury or loss (Alderman 2009). It is possible that the manufacturer of Mary’s and Bob’s car, Toyota, failed to carefully design a car that could assure of security and that of others on the road. By failing to design a sound accelerating system, the gas pedal got stuck hence occasioning the accident. It is possible that Toyota acted negligently, and Mary could sue. Breach of warranty subsists when the seller fails to fulfill the terms of a claim, a promise or a representation he had made about product quality or type. It is expected that when the seller gives the buyer certain warranties about the product he sells, he should be able to honour the terms of this warranty. Though Mary’s car crushed, it has been established that the kind of car that she had bought has a defective accelerating system. Since the accident was caused by this problem common among her kind of model, she could ask Toyota to honour the terms of warranty and either refund the money she had paid for the car or give her a car of comparable value. Bob could also seek for similar warranty honour because it has been established that his car could have a similar problem. This has scared him from using it. Property liability also deals with issues to do with misrepresentation. This refers to the giving of false security to the consumers about the safety or security of a product. This is done as a way of drawing the attention of the consumers away from the inherent dangers posed by the use of the product. It can be implied that while marketing Toyota 2010, the company must have concentrated more on the positive side of the car and avoided talking about the negative side. Consumers such as Mary and Bob must have been attracted to the positive side and decided to buy the car. Their decision could be said to have been influenced by the misrepresentation made by the company. In strict liability, there is the extension of the vendor or manufacturer’s responsibility to all those individuals who might have been affected by the vendor’s product by default. This includes those who might be affected but who might have no direct relationship with the product. Those affected must however prove that there was a defect in the product, and that the defect was a proximate cause of their injuries, and that the same defect made the product injured dangerous to unreasonable degree. It is because of the defective accelerating system that Mary’s car rammed into another one and damaged it. Mary’s spoilt computer could also be attributed to the vehicle’s faulty accelerating system. Both Mary and Bob could institute court proceedings and ask for the award of damages. They must however prove that the cause of the accident involving Mary’s car would have been avoided if Toyota had been careful in designing the accelerating system, if a warranty was in place, if the vendor or manufacturer misrepresented some information about the cars before they bought them and that the car that Mary’s car rammed into would not have been rammed into had it not been for the actions of the company. Mary could ask the court to award her economic damages. These are damages on her car because it was clear that the company manufactured and sold her a defective car without her knowledge. She could for example ask for a refund of her money with penalties and replacement of her car with another one of comparable value. Mary could also ask that Toyota pays for the other car which she rammed into, under the strict liability law. Mary was injured and suffered emotional and mental anguish. She could therefore ask for compensation for this kind of suffering, together with damages related to her hospitalization. Toyota could also be asked to pay for the injuries suffered by the owner of the car Mary rammed into. Mary could also be compensated for the loss of earnings for the time she was in hospital after the accident, the cost of the suit and her attorney’s fees. Bob could also ask for the award of some damages. After his sister’s accident, he has stopped using his car out of fear. He is also unable to sleep because he is upset due to the money he lost, and has been threatened with a sack for sleeping on the job. This implies that he is suffering from mental anguish. He could therefore ask for economic damages. If the warranty is still in place and having established that the car has a defective accelerating system, Bob could ask for a vehicle of comparative price, or a refund of his money against return of the car to the company. Bob could also demand for the cost of the suit and his attorney’s fees. References Alderman, Richard 2009, .An Introduction to US Consumer Law, University of Houston, Houston. Alderman, Richard 2005, The Deceptive Trade Practices Act: Still Alive and Well, Journal of Texas Consumer law. Read More