Consumer Fraud

Fraud and Misrepresentation

Fraud occurs on a daily basis and negatively affects thousands of people. You might have an idea of what fraud is, but not the several different sub-divisions of it. One that you’re most likely to encounter in your day-to-day life is consumer fraud.

Consumer fraud happens when someone gives false information out to another person that’s supposed to make them do or buy something. A lot of times this can be seen in advertisements where the product is nothing like it is described or can’t do something it says it’s able to do. It’s why you will often see notes at the bottom of commercials saying that results may vary or something similar. That’s so that companies can protect themselves from civil suits. In this type of case, you need to be able to prove that the given information was relied upon for the action that was taken.

There is a subtype of consumer fraud is called negligent misrepresentation. Negligent misrepresentation occurs when someone gives another person false information. They use that false information in some kind of business transaction. For example, if you hired a consultant that was supposed to help you buy a house and they intentionally gave you a higher down payment amount than the actual amount required.

When Funk & Associates handles consumer fraud cases, we almost always add a Texas Deceptive Trade Practices Act claim. This increases their effectiveness dramatically. Find out more about Texas’s DTPA act here: Texas Statute 17.46.

Contact Funk & Associates today if you think you’ve been a victim of consumer fraud. Keep in mind that our Austin personal injury law firm only handles consumer fraud cases where the damages are greater than one hundred thousand dollars.

More Information


Frequently Asked Questions

What are the most common types of consumer fraud?
Inept or dishonest business practices are common causes of consumer fraud. When businesses and other entities make misleading claims or empty promises regarding a product or service they offer, consumers could be cheated out of their hard-earned money.

Common types of consumer fraud include:

  • Identity theft
  • Credit card fraud
  • Debit card fraud
  • Mortgage scams
  • Prize and lottery fraud, sweepstakes scams
  • Fake charities
  • Debt collection fraud
  • COVID-19 scams

Fraudsters and scammers target young people and seniors more than other groups, as they see these groups as more fallible and more trusting, but individuals in every age group could fall victim to scams.

How much can you sue for consumer fraud?
Every case is unique, and the compensation you can seek for consumer fraud will depend on many different factors, including the type of fraud, the damages you suffered, and other factors. If you believe that you have been the victim of consumer fraud, then consult with an experienced consumer fraud attorney right away.

What are the fundamental rights of consumers?
In early 20th century America, consumers had limited rights when it came to purchasing goods and services and were also limited in their ability to defend themselves and pursue damages against businesses and manufacturers that sell faulty products or make misleading claims about their offerings. The basic rights that all American consumers are entitled to include:

  • The right to safety
  • The right to be informed
  • The right to choose
  • The right to be heard
  • The right to the satisfaction of basic needs
  • The right to redress
  • The right to consumer education

What is the lemon law?
Lemon laws are designed to protect consumers from financial loss if they purchase a faulty product or service that repeatedly fails to meet quality standards. Although a variety of products and services could be found to be defective, the term “lemon” usually refers to motor vehicles, including cars, motorcycles, and trucks.

Lemon laws require vehicle manufacturers to recall or repurchase vehicles that are found to be defective. The law considers the nature of the defect, the amount of time the vehicle is not available to the consumer due to the mechanical issue, and how many times the vehicle has required repairs.

Can I sue if the defect or problem was unintentional?
Typically, yes. Even if the automaker did not knowingly manufacture, market, and ultimately sell you a defective vehicle, you can generally still hold them accountable. If you file a product liability lawsuit, any negligence or misdeeds on the manufacturer’s part are typically considered irrelevant. If they sell you a defective product, you could take legal action.

Can I sue if I did not purchase anything?

It depends, and the determination will be based on whether you suffered any actual damages. While you could potentially sue a company for marketing a product that they did not have in stock or have a substitute for, the more likely scenario is that you may be able to hold them accountable by reporting them, which might cause them to incur penalties. To file a lawsuit, you would likely need to demonstrate that you incurred actual damages.

When can I sue for false advertising?
Companies and businesses frequently make bold assertions in their marketing campaigns, and sometimes the products or services marketed do not measure up to what is promised. You can generally bring a lawsuit for false advertising against a business even if they include disclaimers in their marketing or make accurate statements, as long as the advertising itself gives the wrong impression about a product or service to consumers. It is even possible that a company could be held liable for false advertising if no consumer was misled.

When can I sue for deceptive pricing?
Companies can be held liable if they deceive customers about the pricing of their products and services. If a business misleads a customer into believing that a product is free, but then charges for that product, they could be held liable. They could also be held liable for hidden fees and surcharges that the consumer did not authorize. Even businesses that are going out of business could be held responsible for deceptive pricing practices if they inflate prices while claiming to offer products at a reduced price. If you have been deceived into believing that you were getting a bargain on a product or service, or were charged fees that you did not authorize, you could have grounds for legal action.

What should I do if I think I am a victim of consumer fraud?
If you believe that you may have been scammed, you should immediately reach out to the local branch of the state consumer protection agency. Depending on the type of scam, you may even want to alert federal authorities. It will be up to a prosecutor to determine whether or not to file charges. Even if the scammer is not taken to criminal court or convicted of a criminal offense, you could still collect damages through a civil lawsuit, as the burden of proof in civil cases is much lower than it is in criminal cases.

What sort of things can be claimed under the Texas Deceptive Trade Practices Act?
The Texas Deceptive Trade Practices Act, or DTPA, protects consumers against fraudulent and unlawful business practices. Specifically, the Texas DTPA protects consumers against:

  • Breach of Warranty: Breach of warranty occurs when a business sells a product that does not live up to claims the business made about the product.
  • Unconscionable Acts: If a business takes advantage of a consumer’s naivety or ignorance around a certain product or service in a way that is deemed “grossly unfair,” then the business may be guilty of an unconscionable act.
  • False, Misleading, or Deceptive Acts: Consumers have protection and legal defense against manufacturers who may make misleading claims about a product or service or take advantage of consumers during a crisis.

What is the statute of limitations to file a consumer fraud claim?
In Texas, the statute of limitations for a consumer fraud claim is two years. This means that, in general, you have two years from the date of the fraudulent action to bring a lawsuit against the fraudulent party. If you do not take legal action within this period, you will likely forfeit your ability to collect damages in civil court.

Do I have a case?

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The submission of information to Funk & Associates (“The Firm”) or one of its attorneys does not create an attorney-client relationship, and the receipt of said information does not constitute an attorney-client relationship.  This website presents general information which is not intended to be legal advice, nor should you consider it as such.  Contacting Funk & Associates does not, and should not, prohibit you in any way from seeking legal advice regarding this or any other matter.  This Firm makes no representations, material or implied, of any statute of limitations which may or may not exist.