One of the more exciting things about becoming an adult is the increased ability to buy new things (that car you’ve been saving for or your first home)! But what do you do when those things are defective, broken, or otherwise in need of repair? 

What is consumer protection?

Consumer protection is the practice of safeguarding buyers of goods and services and the public against unfair practices. Examples include debt collection practices, identity theft protections, and even unsolicited credit cards. Below are some examples of consumer protection laws enforced by the Federal Trade Commission.

Truth In Lending Act – Requires disclosure of credit costs and contract provisions so consumers can compare them.

Fair Credit Reporting Act – Ensures fair, timely and accurate reporting of credit information, and in certain circumstances, requires deletion of obsolete or incorrect info.

Fair Credit Billing Act – Sets out how to fix billing errors on credit card accounts, including fraudulent charges.

Fair Debt Collections Practices Act – Bars debt collectors from using unfair and deceptive practices to collect overdue bills.

Magnuson-Moss Warrant Act – Requires manufacturers and sellers to explain warranty coverage, terms & exclusions

Credit Card Accountability, Responsibility & Disclosure Act – Limits fees & penalties charged by credit card companies, and when they may increase interest rates, and by how much.

NOTICE: All of the examples included above include the word Act. That means that these are all examples of statutory law which was created by the legislative branch (Senate and House of Representatives). You can compare this to common law which is the type of law that is created through the decisions of courts.

What is a warranty?

Warranties are another version of consumer protection that establishes your right to have defects fixed at no charge. In general, warranties are promises or guarantees that a product will do what it is intended to do. Different types of consumer products will have different types of warranties, and there are limits to what a warranty covers.

All warranties must be labeled as “full” or “limited.” But what is the difference between them?

Under a full warranty,  the dealer/manufacturer is given a reasonable number of chances to fix defects, but then must allow you to choose a full refund or replacement without charge.  Full warranties are rare and most warranties are limited. Under a limited warranty, no refund/replacement rights exist beyond what is stated in the contract/warranty.  

What are some important things I should keep in mind regarding warranties? 

• Always obtain and save a copy of your warranties;
• Register your purchases, if required;
• Warranties usually do not apply to used items; and
• Even after a warranty ends, you may still have a remedy under the implied warranty of fitness of purpose within a “reasonable” time.

I bought a car that’s a “Lemon”! What do I do?

If you are having repeated problems getting your new vehicle to operate the way it should, you might have a Lemon on your hands! A vehicle is a Lemon if it has significant manufacturing defects, and such defects are covered by a written warranty. Texas’ Lemon Law may help you get it repurchased, replaced, or repaired. The Texas Lemon Law is a state law administered by the Texas Department of Motor Vehicles that helps consumers who buy or lease new motor vehicles and have repeated problems getting their vehicles properly repaired under the manufacturer’s original warranty. The Lemon Law can help a consumer get the vehicle repurchased, replaced, or repaired.

What does it cover?

New vehicles, including cars, trucks, vans, motorcycles, all-terrain vehicles, motor homes, towable recreational vehicles (TRVs), and neighborhood electric vehicles that develop a defect covered by a manufacturer’s written warranty. The law does not cover repossessed vehicles, non-travel trailers, boats, farm equipment, or defects that do not substantially impair the use or market value of the vehicle such as minor rattles, radio static, etc.

Are used motor vehicles covered?

Your used vehicle may be covered under current state laws. Texas law related to warranty performance may cover your used vehicle if it is still covered by the manufacturer’s original warranty (not an extended service contract), or if the defect started and was reported to the dealer while under the manufacturer’s original warranty and the defect continues to exist, repair assistance for that problem may be available to you.

To qualify as a Lemon, a vehicle must meet all of the following conditions:

• It has a substantial manufacturing defect;
• The defect is covered by a manufacturer’s written warranty;
• The owner reports the defect to the dealer or manufacturer within the warranty term;
• The owner gives the dealer a reasonable number of attempts to repair the defect or condition;
• The owner gives the manufacturer written notice (preferably by certified mail) of the defect and at least one opportunity to cure the defect; and
• The defect persists and substantially impairs the vehicle’s use or market value, or creates a serious safety hazard.

How many chances does the dealer get to fix the problem?

The law presumes you have given the manufacturer or authorized dealer a reasonable number of attempts to fix the defect if you pass one of the tests listed below. Determining if the dealer has had a reasonable number of repairs is easy. Simply see if you pass the four-times test, the serious safety-hazard test, OR the 30-day test. 

• Four-times test: You pass the four-times test if you have taken the vehicle to a dealership for repairs four times for the same defect within the first 24 months or 24,000 miles, whichever comes first, and the defect is still not repaired.

• Serious safety-hazard test: A serious safety hazard is a life-threatening malfunction that substantially impedes your ability to control or operate the vehicle normally or that creates a substantial risk of fire/explosion. You pass the serious safety-hazard test if you have taken the vehicle for the repair of a serious safety hazard twice during the first 24 months or 24,000 miles, whichever comes first, and the defect is still not repaired.

• 30-day test: You pass the 30-day test if your vehicle has been out of service for repair because of a defect covered by the original factory warranty for a total of 30 days or more – not necessarily all at one time – during the first 24 months or 24,000 miles (if a comparable loaner vehicle was provided while the vehicle was being repaired, that time does not count toward the 30 days) a substantial defect still exists.

How long do I have to file a Lemon Law complaint?

A Lemon Law complaint must be filed within six months following the earliest of:

Expiration of the express warranty term;

• 24 months after purchase; or
• 24,000 miles following the delivery of the vehicle (except towable recreational vehicles).

To be safe, file as soon as you realize the dealer is having problems repairing the vehicle.

What happens if I win?

The law provides basic guidelines for the relief you may get if you prove your case. Every situation is different. The department reviews the facts of each particular case when making a decision. If you win your case, the department can order repair, replacement, or refund.

If you’re interested in learning more, please visit the resources below:

• Office of the Attorney General of Texas, Consumer Protection (https://www.texasattorneygeneral.gov/consumer-protection) 
• Office of the Attorney General of Texas, Consumer Rights (https://www.texasattorneygeneral.gov/consumer-protection/file-consumer-complaint/consumer-rights)
• The Consumer & Commercial Law Section of the State Bar of Texas (https://txconsumerlawyers.org/)
• Texas State Law Library, Consumer Protection (https://guides.sll.texas.gov/consumer-protection)