Texas Penal Code 32.42 – Deceptive Business Practices

WHAT IS DECEPTIVE BUSINESS PRACTICES IN TEXAS?

The Texas law against deceptive business practices prohibits dishonest, deceitful, or misleading conduct, whether intentional or criminally negligent, committed in the course of business dealings that exposes the other party to financial loss or disadvantage. The offense criminalizes conduct that falls short of theft, and is often mistakenly viewed as a civil matter. Examples of such swindling and fraud include selling knockoffs, or counterfeits.

WHAT IS THE DECEPTIVE BUSINESS PRACTICES LAW IN TEXAS?

Tex. Penal Code § 32.42. DECEPTIVE BUSINESS PRACTICES.

(b) A person commits an offense if in the course of business he intentionally, knowingly, recklessly, or with criminal negligence commits one or more of the following deceptive business practices:

(1) using, selling, or possessing for use or sale a false weight or measure, or any other device for falsely determining or recording any quality or quantity;

(2) selling less than the represented quantity of a property or service;

(3) taking more than the represented quantity of property or service when as a buyer the actor furnishes the weight or measure;

(4) selling an adulterated or mislabeled commodity;

(5) passing off property or service as that of another;

(6) representing that a commodity is original or new if it is deteriorated, altered, rebuilt, reconditioned, reclaimed, used, or secondhand;

(7) representing that a commodity or service is of a particular style, grade, or model if it is of another;

(8) advertising property or service with intent:

(A) not to sell it as advertised, or

(B) not to supply reasonably expectable public demand, unless the advertising adequately discloses a time or quantity limit;

(9) representing the price of property or service falsely or in a way tending to mislead;

(10) making a materially false or misleading statement of fact concerning the reason for, existence of, or amount of a price or price reduction;

(11) conducting a deceptive sales contest; or

(12) making a materially false or misleading statement:

(A) in an advertisement for the purchase or sale of property or service; or

(B) otherwise in connection with the purchase or sale of property or service.

(c) An offense under Subsections (b)(1), (b)(2), (b)(3), (b)(4), (b)(5), and (b)(6) is:

(1) a Class C misdemeanor if the actor commits an offense with criminal negligence and if he has not previously been convicted of a deceptive business practice; or

(2) a Class A misdemeanor if the actor commits an offense intentionally, knowingly, recklessly or if he has been previously convicted of a Class B or C misdemeanor under this section.

(d) An offense under Subsections (b)(7), (b)(8), (b)(9), (b)(10), (b)(11), and (b)(12) is a Class A misdemeanor.

WHAT IS THE PENALTY CLASS FOR DECEPTIVE BUSINESS PRACTICES IN TEXAS?

The penalty category for deceptive business practices depends on whether a person has previous convictions, and the person’s intent at the time of committing the crime.

If a person has been previously convicted of deceptive business practices, any subsequent charge will be a Class A misdemeanor, punishable by up to one year in county jail.

The first offense is a Class C misdemeanor, punishable by a fine of up to $500, if, in the course of business and with criminal negligence, a person:

• used, sold, or possessed for use or sale a false weight or measure, or other device to falsely determine or record quantity or quality;
• sold less than the represented quantity of a property or service;
• as the buyer who weighed or measured the property or service, took more than the represented quantity;
• sold an adulterated or mislabeled commodity;
• passed off property or a service as something else;
• misrepresented the commodity as new or original when it was not;

Committing deceptive business practices in any of the above ways intentionally, knowingly, or recklessly, increases the charge to a Class A misdemeanor. Deceptive business practices is also a Class A misdemeanor if, during the course of business, a person intentionally, knowingly, recklessly, or with criminal negligence:

• misrepresented or held something out as a particular style, grade, or model when it was not;
• falsely advertised the quantity or quality of property or a service;
• misrepresented the price of property or a service;
• made a materially false or misleading statement of fact concerning the price of something;
• conducted a deceptive sales contest;
• made a materially false or misleading statement of fact in an advertisement or elsewhere concerning the purchase or sale of property or a service.

WHAT IS THE PUNISHMENT RANGE FOR DECEPTIVE BUSINESS PRACTICES IN TEXAS?

Deceptive business practices charged as a Class C misdemeanor is only punishable by a maximum fine of $500. A Class A misdemeanor carries up to one year in jail, and a maximum fine of $4,000.

WHAT ARE THE PENALTIES FOR DECEPTIVE BUSINESS PRACTICES IN TEXAS?

A person charged with deceptive business practices as a Class A misdemeanor may be eligible for probation after a conviction, or deferred adjudication without a conviction, for a period not to exceed two years.

If charged with a Class C misdemeanor, a person may ask the judge to grant deferred adjudication for a period of up to 180 days. If convicted of a Class C misdemeanor, the person will be required to pay a fine without any further community supervision obligation.

WHAT ARE THE DEFENSES TO DECEPTIVE BUSINESS PRACTICES IN TEXAS?

The statute does not create any defenses for a person accused of deceptive business practices. An accused may attempt to negate any of the elements the State must prove beyond a reasonable doubt.

WHAT IS THE STATUTE OF LIMITATIONS FOR DECEPTIVE BUSINESS PRACTICES IN TEXAS?

The limitation period for deceptive business practices is two years.

DECEPTIVE BUSINESS PRACTICES IN TEXAS

The law against deceptive business practices prohibits conduct that may cause unknowing buyers, sellers, or potential buyers and sellers to lose money or value in property, commodities, or services. If a person makes material misrepresentations about a product or service, such conduct may fall short of theft, but he or she may be charged with deceptive business practices.

TEXAS DECEPTIVE BUSINESS PRACTICES COURT CASES

The case law regarding deceptive business practices in Texas illustrates the types of conduct criminalized by the statute.

• In Dunham v. State, the defendant was a door-to-door alarm system salesman. He knocked on the elderly victim’s door, who contracted with a different company, and told her he was there to update her system. He gave her the impression he worked for her current alarm company, talked his way inside, and told her about new “free” features. He had the victim break her contract with the old company, and installed a new system.

  The victim realized the next day she would be paying double what she used to pay, and that it was to a different company. A jury convicted the defendant of deceptive business practices, and the appellate court affirmed.