Texas Consumer Protection Laws: Lemon Law, Refunds, Repairs and Scams

Under the Texas lemon law, a manufacturer, converter or distributor must make repairs needed to conform a new motor vehicle to its express warranty, including after the warranty expires if the problem was reported during the warranty. If it cannot fix a defect that creates a serious safety hazard or substantially impairs the vehicle's use or market value after a reasonable number of attempts, it must reimburse reasonable incidental costs and either replace the vehicle with a comparable one or take it back and refund the full purchase price minus a reasonable allowance for use. A reasonable number of attempts is presumed, before the earlier of the warranty's expiration or 24 months/24,000 miles from delivery, if: the same defect was repaired four or more times and continues; a serious safety hazard was repaired two or more times and continues; or the vehicle was out of service for repair a cumulative 30 or more days (not counting days with a comparable loaner). The manufacturer must receive written notice and a chance to cure, and a proceeding must be started within six months after the earlier of the warranty's expiration or 24 months/24,000 miles from delivery.

The Attorney General explains that federal law requires used car dealers to tell buyers whether a used car is sold with or without a warranty, using a Buyer's Guide displayed on a side window. "AS IS" means the vehicle has no warranty and the seller has no obligation for repairs; "WARRANTY" means the guide must list exactly which parts and services are covered and for how long. The Buyer's Guide becomes part of the sales contract and overrides contrary contract terms, and must be in Spanish if the sale is in Spanish. Any warranty the seller offers must be in writing to be valid.

A consumer may cancel a home solicitation transaction until midnight of the third business day after signing. The law applies when a merchant personally solicits the sale somewhere other than the merchant's place of business and the consumer agrees there, for goods or services over $25 (or real property over $100), whether paid in cash or installments. It does not cover farm equipment, regulated insurance sales, sales under an existing revolving charge account, or sales negotiated at the merchant's fixed business location, among others. The merchant must give a receipt or contract with the date, the merchant's name and address, and a statement of the right to cancel.

The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) lists specific false, misleading or deceptive acts. A consumer may sue when a listed deceptive practice the consumer relied on, a breach of warranty, or an unconscionable action is a producing cause of economic damages or mental anguish. A winning consumer recovers economic damages plus court costs and reasonable attorneys' fees; if the conduct was knowing, the consumer may also recover mental anguish damages and up to three times economic damages, and if intentional, up to three times economic and mental anguish damages. A court must award the defendant fees if the suit was groundless, in bad faith or for harassment.

The Attorney General notes that it is illegal to knowingly make false or misleading statements about the need for parts or repairs, to say work was done or parts replaced when that is not true, or to represent used or refurbished parts as new. The Attorney General recommends getting a signed written authorization before a shop tows, inspects, diagnoses or disassembles your car for an estimate, a separate signed authorization before repairs begin, and a work order spelling out the work, fees, completion date and payment terms.

During a disaster declared by the Governor or the President, the DTPA prohibits taking advantage of the disaster by selling or leasing, or demanding, an exorbitant or excessive price for fuel, food, medicine, lodging, building materials, construction tools or other necessities. The rule applies during a designated disaster period that begins when the disaster occurs or is declared and ends 30 days after the declaration expires or is terminated.

Credit services (credit repair) organizations must register with the Secretary of State before doing business in Texas. They may collect payment before completely performing their services only if they have a surety bond or surety account for each location, and they may not charge solely for referrals to lenders. Contracts must state that the buyer may cancel before midnight of the third day after the transaction and include a notice of cancellation. Debt management providers must register with the Consumer Credit Commissioner, may not collect fees before a compliant agreement is signed, and are limited in what they can charge (for example, for plans that reduce interest or fees, a consultation fee of up to $100 and a monthly fee of the lesser of $10 per account or $50, subject to adjustment).

The Attorney General advises getting several detailed written bids, checking references, insisting on a written contract that states the work, start and completion dates and all promises, and never signing a contract with blanks. The Attorney General notes that some trades, such as electricians, must be licensed by the state, and that the Texas Department of Licensing and Regulation licenses and investigates complaints about over twenty types of businesses and occupations.

A person who conducts business in Texas and owns or licenses computerized sensitive personal information must notify affected individuals of a breach without unreasonable delay and no later than 60 days after determining that the breach occurred (delay is allowed at law enforcement's request). If the breach involves at least 250 Texas residents, the business must also notify the Attorney General, through the Attorney General's online form, as soon as practicable and no later than 30 days after determining the breach occurred.

Consumers can file a complaint online with the Office of the Attorney General's Consumer Protection Division by choosing the complaint form that fits their problem. Have the business's name and full address, a detailed description, dates and amounts, contract and payment information, and any steps taken to resolve it; supporting documents may be uploaded. Complaints are open to the public under Texas law, and the Attorney General cannot give legal advice. A confirmation email with a complaint number is sent after filing.

1) Written notice and final repair chance: the owner (or someone on the owner's behalf, or the Texas Department of Motor Vehicles) must give the manufacturer written notice of the defect, and the manufacturer must get an opportunity to fix it, before a refund or replacement can be ordered. TxDMV recommends sending the notice by certified mail. 2) State complaint process (required): a refund or replacement under the lemon law is available only after the owner uses the state's administrative process. The owner files a Lemon Law complaint with TxDMV with a $35 filing fee and gives the manufacturer notice of the complaint with a last opportunity to repair. TxDMV staff review the complaint and try mediation; if that fails, a TxDMV hearings examiner holds a hearing and issues a final written decision within 60 days after the hearing closes. Either side may ask TxDMV for rehearing and then appeal to state district court in Travis County. If no final order is issued within 150 days after the complaint is filed, TxDMV must notify the parties that the owner may file a civil lawsuit. 3) Deadline: the complaint must be filed no later than six months after the earliest of the express warranty's expiration or the date 24 months or 24,000 miles have passed since original delivery.