The Deceptive Trade and Consumer Protection Act - Assignment Example

U.S. Consumer law Part A Circle the best answer: 1.Which of the following was not a requirement for certifying a class action? 1. Commonality. 2. Typicality 3.Economy. 4. Numerosity. 5. Adequacy of representation. 2. The economic loss rule is a judicially created rule that: 1.Requires claims for pure economic loss must be brought n contract not tort. 2. Limits tort claims to only economic loss. 3. Prohibits recovery of mental anguish damages for breach of contract. 4. Requires that claims for economic loss must be brought in tort not contract. 5. None of the above. 3. Which of the following is not a prerequisite for a credit card holder to assert claims and defenses he would have against the merchant, against the credit card company? 1. The transaction must be over $50. 2. The consumer must make a good faith effort to settle with the merchant. 3. The transaction must be in the consumer's state or within 100 miles of his home. 4. The consumer must report it to the credit card company within ten days. 4. The statute of limitation for a breach of warranty is: 1. 1 year 2. 2 years 3. 3 years 4. 4 years. 5. Which of the following is not a good under the Texas Deceptive Trade Practices Act? 1. A car. 2. A house. 3. Stocks and bonds. 4. A dog. 6. The term “caveat emptor" means: 1. Let the buyer beware. 2. You must disclose. 3. Empty promises. 4. Seller is responsible. 7. Credit bureaus process approximately how may pieces of information a day? 1. 50,000,000 2. 50,000 3. 5,000 4. 5000 8. Which of the following is not a credit bureau in the United States? 1. Experian. 2. TransUnion. 3. American. 4. Equifax. 9. Under the fair Debt Collection Practices Act, a debt collector may: 1. Never call a consumer at work. 2. Call a consumer no more than once a day at work. 3. Not call a consumer once the consumer tells the debt collector that the employer does not allow such calls. 4. Call a consumer at work any time he wants. 10. Which of the following is not included within the term actual damages? 1. Cost to repair a product. 2. lost income. 3. Pain and suffering. 4. Lost profits. 5. None of the above. 11. The term “upside-down" means that the consumer: 1. owes more than her houses is worth. 2. Was tricked into buying the house by the seller. 3. Is so confused that she could not protect herself. 4. All of the above. 12. Which of the following is not a basis for challenging an arbitrator's decision in court: 1. fraud. 2. Evident partiality. 3. Misconduct. 4. Disregard of the law. 5. None of the above. 13. To assert a billing error against a credit card company, the consumer must act within how many days after the bill is sent? 1. 20 days. 2. 30 days. 3. 50 days. 4. 60 days. 14. Which of the following involves a voluntary dispute resolution process that is not binding unless the parties come to an agreement: 1. arbitration. 2. Mediation. 3. Negotiation. 4. All of the above. 5. More than one of the above. 15. In an action for breach of warranty, which of the following damages may not be recovered: 1. damages for mental anguish. 2. Attorney's fees. 3. Damages for the cost to repair a defective product. 4. Damages for medical bills. 5. More than one of the above. 16. The fair debt Collection Practices Act does not apply to which of the following? 1. A company that collects a debt owed to a plumber for fixing a house toilet. 2. An attorney suing to collect a debt owed Visa. 3. A company collecting a debt owed Visa. 4. Visa collecting its own debts. 5. More than one of the above. 17. For a misrepresentation under the Texas Deceptive Trade Practices Act, which of the following type of damages may not be recovered: 1. attorney's fees. 2. Economic damages. 3. Damages for mental anguish. 4. Punitive damages. 5. Damages for pain and suffering. 18. The Taxes Deceptive Trade Practice Act requires notice be sent to the defendant how many days before a lawsuit is filed? 1. 20 2. 30 3. 45 4. 60 19. Which of the following recently has been enacted into law in the U.S.? 1. Credit card Act. 2. Arbitration fairness Act. 3. Consumer financial protection Bureau Act. 4. More than one of the above. 5. All of the above. 20. Which of the following is not an appropriate standard by which to evaluate punitive damages under the Constitution? 1. Net worth of the defendant. 2. Ratio to the amount of damages awarded. 3. Degree of reprehensibility of defendants conduct. 4. Sanction for similar misconduct. Part B True/ false explain Your answer should be typed. For each of the following questions, state whether the statement is true or false, and then explain your answer in two sentences or less. Your answer should look as follows: " 1. True, explain the reason why it is true" 1. If a father buys a toy for his son, the son may be a consumer under the Texas Deceptive Trade Practices Act? T/F True, the son acquires the toy when it is bought for his benefit. In other words, he is an intended beneficiary rather than an incidental recipient. 2. The best way to prevent identity theft is to review a copy of your credit report? T/F True, by reviewing a copy of one’s credit report may reveal accounts unknown to you but included in the credit report is the first sign of identity theft. 3. In an American jury trial, the jury decides issues of fact and law? T/F False, juries only decide issues of fact 4. It is easier to recover damages under a producing cause standard than a proximate cause standard? T/F True, a producing cause standard does not require foreseeability like proximate cause standard. 5. If you buy something online, it is best to use a credit card? T/F True, using a credit card helps to reduce exposure to fraud and saves a lot of money. Checks and debit cards are a number of the most horrible ways to pay for anything. 6. Excessive costs may invalidate an arbitration clause? T/F False, such a clause may expose a person to disastrous debt, but such a clause in contravention of Consumer Protection Act not against arbitration. 7. Strict Products Liability, 402A, applies to only the consumer or the user? T/F False, strict liability 402A applies to makers of products that are unreasonably dangerous to the consumer or user. 8. A consumer has the right to a free copy of her credit report once a month? T/F False, Every American consumer is entitled to free credit reports annually from major credit bureaus. 9. Any business may be a consumer under the Texas Deceptive Trade Practices Act? T/F True, the DPTA makes it illegal for any business or individual participating in "commerce or trade" to participate in "unconscionable conduct (Devine 2010, 1)." 10. "UDAP" means" you Don't Attack Professors"? T/F False, it means Unfair and Deceptive Acts or Practices Essay Questions Question A The Deceptive Trade and Consumer Protection Act do not regulate every situation where one party has misled another party. A number of states restrict the scope of this statute to commercial dealings involving a consumer leasing or purchasing goods for family purposes or personal household. The terms used in every statute to describe the statute’s scope are frequently the subject of court cases. Most states require an open-minded interpretation of the deceptive trade practices terms, including those setting forth the statutes applicability (Watson 1994, 23). In order to succeed on such a claim, first, Casey must prove the following: there was a deceptive or unfair deceptive practice. Second, the unfair practice affected commerce and third, the deceptive act caused harm to her or to the business. The suitable plaintiff under many deceptive trade practices statues is a consumer normally defined as an individual who will use a service or good for household, personal or family purposes. The process of determining if a plaintiff is a consumer needs use of two kinds of analysis, an objective test and a subjective test. The subjective test considers the planned use of the service or good at the time when the transaction was conducted. Therefore, if a buyer of a product plans at the time of buying to use the product for a household, family or personal purpose, the purchaser will most likely be taken as a consumer under the pertinent statute. On the other hand, the objective analysis considers if the type of product in the transaction is used for a family, household or personal purpose. A number of deceptive trade laws include wide restrictions on unfair or deceptive trade practices. Often, these states include bans against unconscionable practices and fraudulent practices. When interpreting the FTCA, the Federal Trade Commission does not need that the individual committing a deceptive act have the intention to deceive (Slaughter 2009, 1). Additionally, the FTC the actual deception is also not a requirement. The FTC just requires that a person has the capacity to commit an unfair trade practice or deceive. Similarly, state laws do not require that a party specifically plans to deceive, nor must a party always know that a statement is not true to be liable for falsifications made to a client (McNamara Law Office 2000, 1). In this case, the seller engaged in a deceptive act by selling a house to Casey without disclosing all the relevant facts. The question of whether the seller acted in bad or good faith is not relevant. Given the fact unfair competition methods assume so many forms; all instances are not listed by the act. As an alternative, courts of law have always held that the subsistence of deceptive acts must be ascertained from the circumstances of every particular case. Generally, acts are normally found to be deceptive when they are unethical, unscrupulous, oppressive, injurious to consumers, immoral, or when they offend recognized public policy. In this case the actions of the seller were injurious to because she could not even sleep in the house. She had nightmares about what happened in the house, and has lost her job because she had become so distracted. More importantly, she tried to sell the house, but on one will pay more than one-half what she paid. According to Cantu (1994, 28), queries as to whether or not the seller of the house who committed the deceptive act planned certain consequences or acted in bad or good faith are not relevant. The pertinent question is what effects the behavior of the seller had on Casey. In a normal deceptive or unfair trade practice cases, the judge is liable for determining if the supposed acts were perpetrated (Slaughter 2009, 1). After this determination, the court of law makes a decision as a matter of law if or not the shown facts comprise deceptive or unfair trade practice. A person who has been the casualty of unfair or deceptive trade practices has a number of remedies. State unfair trade practices laws have been specifically successful because of damages provisions incorporated in the statutes. Nearly half of the states have a provision for minimum statutory damages to a plaintiff who has shown an unfair trade practice, even if the plaintiff has failed to show actual damages. The actual power behind the deceptive or unfair trade practices law is the civil remedy. Any business or person destroyed or injured by deceptive or unfair trade practices can take legal action against the perpetrator. A number of states also allow courts to award triple damages, which imply the real damages to an injured party by an unfair trade practice are tripled(Slaughter 2009, 1). Quite a lot of states also allow courts to impose attorney's fees or punitive damages for these practices. Therefore, if Casey is awarded damages, the law automatically triples or trebles the damages she suffered as a result of the unfair trade practice. The law even permits a judge to compel the losing side to meet the cost of attorney’s fees of the winning party. Question B Debt collectors are notorious for a number of their underhand methods used to collect debts. Most collectors manage to get away with these underhand tactics because people are not aware of the regulations dictating how debt collectors can deal with clients when trying to collect debt. The Fair Debt Collection Practices, commonly recognized as FDCPA, is a federal law that is used to govern the acts of parties serving as debt collectors for private debts (Larson 2003, 1). Home loans, credit card accounts, and medical bills are considered private debts. The act controls the debt collectors’ behavior. A debt collector is any individual who collects debts regularly. This meaning also includes lawyers offering services related to debt collection regularly. Even in cases where the money is owed legitimately, the conduct of a debt collector is regulated by law. Ordinarily, in-house collection representatives are not covered by the FDCPA act. For instance, if one has a credit card, and one is contacted by the store’s debt collection department, the act is not applicable. Nonetheless, if the store employs an external collection outfit to make contact with the consumer in connection to the debt, the agency’s behavior is regulated by the act. Likewise, if the same retail store employs an in-house collection outfit, but hints to the consumer that the amount owed will be collected by a third party, the FDCPA is applicable to them due to that representation. “Similarly, if the same store uses an in-house collection agent, but suggests to the consumer that the collection is being performed by a third party, the FDCPA may apply to them as a result of that representation (Larson 2003, 1)”. The act also states how the debt collector should act when interacting with a person. The law prohibits the debt collector from giving out or releasing information to consumer’s debt to anyone but the consumer and his or her spouse or a parent in case the debtor is a minor, but both RMG and GBH engaged in this behavior which is prohibited by the act. In this case, Casey bought a TV and an oven from different stores and agreed to pay $100 a month for one year for the TV and oven. After failing to honor her promise, the stores have asked her to pay, and now the matter has been turned over to debt collector. RGM Company is collecting the debt for oven, and GBH Company is collecting the TV debt. In communicating with Casey, RGM wrote a letter to Casey, telling her that unless she pays within 30 days, the will send the sheriff to put her in jail. They also called her father and told him his daughter was a deadbeat. In addition, debt collectors are not permitted to communicate through post card or even use any form of language or symbol on an envelope that reveals that are debt collectors. The prohibition is not limited to the use of language or symbols only, debt collectors are also banned from using any kind of abuse or harassment while trying to collect debt (Polino1999, 66). They are not allowed to threaten aggression against the debtor, their property or even their reputation. Further, debt collectors are prohibited from using irreverent or obscene language in the process of communicating with the consumer or the person owing the money through mail or phone. Both RGM and GBH contravened the FDCPA act because when Casey called them to work something out, they both yelled at her, called her names, and told her that all they would accept is payment in full and if she didn't pay soon she would lose everything she owns. This can be termed as use of profane language and contravenes the FDCPA act. Casey has a right to claim that firms contacted by the stores to collect the debts on their behalf contravened the FDCPA act by contacting called her father to tell him that his daughter was a deadbeat, calling her mother to tell her that she was a bad mother because her daughter did not pay her bills, threatening to put her in jail if she failed to pay the debts and worse still for telling her that she will lose her house if she did not pay promptly. All these underhand tactics are prohibited under the FDCPA Act. Under the Fair Debt Collection Practices Act, Casey has the right to sue both debt collectors, RGM and GBH, in federal or state court within a period of one year from the time when the violation occurred. If Casey winds the case against the two debt collectors, she may be able to recover damages in the amount of all losses suffered due to the violation together with an extra amount of up to one thousand dollars. This includes losses suffered as a result of closing her restaurant for several days. She may also recover attorney fees and court costs. Question C There are generally two aspects to claims relating to defective products: one is the likely claim against the vendor under sale contract; the other is the likely claim against the maker of the good in tort for this faulty good. The claim against the maker of the good is difficult to establish before claiming tort that the good caused damage to the property or personal injury. In the nonexistence of a contract with the producer, one cannot sue him for the expenses of repairing the product even if this was because of a latent flaw; it is not property damage as a good cannot damage itself. Generally, a buyer can be able to recover all his losses caused by defective products from the vendor under the Sale of goods act (The Sunday Times 2007, 1). Also, he has a claim for personal injuries from the company under the consumer protection act. However, if there is no such injury or damage he has a claim against the vendor unless if there is a guarantee which is enforceable against the company that makes the product. Therefore, Mary can be able to recover all his losses caused by the defective vehicle including destruction to her computer and personal injury which included several broken ribs, and a broken leg as well as serious head injuries. Notwithstanding the safety steps a dealer or manufacturer claims to take in handling and making a vehicle, Mary and Bob can make a claim of strict liability based on the Toyota accelerator pedals, without showing carelessness if the following conditions subsist. First, the motor vehicle or one of its elements had an irrationally dangerous fault that injured the passenger, driver or otherwise. The fault can occur either in the vehicle design, during shipment or handling, during manufacture, or through a failure to caution customers of a risky part of the motor vehicle. Second, the fault in the vehicle caused an injury while it was being used in a manner that it was planned to be used. Reasonably expected use of a motor vehicle includes involvement of the vehicle in collision with other vehicles, so the producer’s responsibility in making a car includes the responsibility to create a design that is rationally secure in case of collision. The nonexistence of specified safety features may lead in a determination that the motor vehicle is imperfectly designed. Third, the motor vehicle had not been considerably changed from the state in which it was initially sold. "Considerably" means in such a manner that the vehicle’s performance is affected. In Many and Bob’s case, all the three conditions exist and they can therefore sue the manufacturer for strict liability. The Toyota manufacturer may have a defense to strict liability, especially if Mary and Bob owned the cars for sometime, if it can be proven that they knew about the fault but proceeded to use the vehicles anyway. Usually, this is established through the car’s condition, which the company will be in a position to examine if a claim is brought against it, or from description provided by the customer on the use of the vehicle (Hewitt 1991, 8). In a number of states, a manufacturer may also be capable to defend against vehicle fault claim under the conjecture that comparative or contributory negligence was a factor in or the cause of injuries. Conventionally, vehicle producers have been involve in what is called cost-benefit analysis when making a decision on whether to modify a potentially faulty vehicle design. During this process, the companies calculates the cost of changing the design, including vehicle repairs and recalls and compare that cost against the likely cost of legal action and settlement after the fault leads to injuries. More often than not, punitive damages are awarded with an aim of adding the potential expenses a company will face in case it decides to ignore the design fault, thereby shifting analysis of cost-benefit toward eradication of faults. From, the case it is clear that Toyota manufacturers chose to ignore the defect since the problem of accelerator pedals is common to many Toyota cars. If successful, Mary and Bob may be awarded punitive damages which will enable them to recover all damages they suffered. In most cases, courts award punitive damages which are aimed at punishing vehicle makers and persuade them to fix intrinsic faults in automobile designs that have led to injury. A fascinating topical trend in liability involving vehicle product is a higher financial level for punitive damage awards in successful legal actions against sellers or manufacturers. Normally, the punitive damages are beyond and above damages that compensate litigants for their injuries and can occasionally range into millions of dollars. Taking into account this fact, Mary and Bob can be awarded punitive damages that are way beyond the losses and injuries they suffered due to faulty accelerator pedals. Bibliography Cantu, C 1994, Texas Deceptive Trade Practices Act (Joint venture), San Antonio St. Mary's University, School Of Law, Texas Devine, J 2010, Overview of the Texas deceptive trade practices act, viewed July 29, 2010 < http://ezinearticles.com/?Overview-of-the-Texas-Deceptive-Trade-Practices-Act&id=1170558> Hewitt, S 1991, Manufacturer's Liability for Defective Goods, Wiley-Blackwell, Malden, MA McNamara Law Office 2000, Texas Deceptive Trade Practices Consumer Protection, viewed July 29, 2010 < http://library.findlaw.com/2000/Mar/1/130722.html> Larson, A 2003, The Fair Debt Collection Practices Act (FDCPA), viewed July 29, 2010 < http://www.expertlaw.com/library/consumer/fair_debt_collection.html> Polino, S 1999, Complying with the fair debt collection practices act in Texas, National Business Institute, Eau Claire. Slaughter, J 2009, Law prohibits unfair and deceptive trade practices, viewed July 29, 2010 The Sunday Times 2007, What is a manufacturer’s liability for defective goods that did not cause damage? Viewed July 29, 2010 Watson, C, 1994, A guide to the Texas Deceptive Trade Practices-Consumer Protection Act (Rev ed.)Texas Young Lawyers Association, Washington Read More