When do hidden fees violate the Texas DTPA?

Rule Under Texas Law

• Tex. Bus. & Com. Code § 17.46(b)(5) prohibits misrepresenting the characteristics or benefits of goods or services.
• Section 17.46(b)(24) prohibits failing to disclose information known at the time of the transaction with intent to induce the consumer to enter into the transaction.
• Advertising one price while charging materially different amounts through hidden fees may constitute bait-and-switch.
• Fees must be disclosed in a clear and conspicuous manner before the consumer commits to the transaction.

What You Must Prove

• The consumer was not adequately informed of the fees before agreeing to the transaction.
• The undisclosed fees materially affected the consumer's decision to purchase.
• The business knew of the fees and failed to disclose them.
• The consumer suffered actual damages as a result (typically the undisclosed fee amount).

Common Defenses

• The fees were clearly disclosed in writing before the transaction was completed.
• The consumer signed documents acknowledging the fees.
• The fees were optional and the consumer chose to accept them.
• Industry practice and regulations govern the disclosure, and those requirements were met.

Damages and Attorney's Fees

• Economic damages typically include the amount of the undisclosed fees.
• If the conduct was knowing, treble damages may be available.
• Attorney's fees are recoverable for prevailing consumers.
• If the fee scheme affected many consumers, class action may be possible (though difficult under DTPA).

Related Texas DTPA Pages