The Illinois Consumer Fraud and Deceptive Business Practices Act[i] (ICFA),identifies unlawfully deceptive business practices and provides legal remedies for consumers, borrowers and people doing business who are damaged by fraud and deception in the conduct of trade or commerce. The automobile sales, repossession and repair industries are historic in the incidence of fraudulent and deceptive practices where consumers too often rely on bad practices and faulty or missing disclosures of important information a consumer needs to make an informed decision. The ICFA covers commercial activity in a variety of product and service issues. The penalties for violating the ICFA include criminal and civil penalties and liability when a fraud or deception victim makes a complaint to the state or files a private lawsuit against the wrongdoing individual or business.
The ICFA defines unlawful practices as follows: “Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact, [omitted[ii]] in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby.[iii]”
Examples of unfair or deceptive acts include chain letters and pyramid schemes.
Chain referral sales techniques are prohibited under the ICFA[iv]. Chain letter referrals involve a seller convincing a buyer to make merchandise purchases and receive a discount if that buyer offers up the names of other potential customers to the seller, and where the seller is actually makes sales to those buyers, at which time the original discount offered to the buyer becomes effective, often in the form of a credit or commission reduction in the originally stated price.
A pyramid sales scheme[v] involves an operation or plan where a person in exchange for money or something of value (most often the promise of income from others you bring into the plan) is to participate in the same plan or operation of signing other people up in the operation of plan, and income is not primarily a function of the actual sale of goods or services sold. In some examples, there is a fee to join the plan, and when the person who joins, gets others to sign up, they receive a percentage of the others who sign up and pay their fee. The person at the top if the pyramid wins and makes money on everyone below or after them in the pyramid, and this is illegal in Illinois under the ICFA.
Failures to disclose information, providing false reports and threatening conduct are also illegal.
Consumers rely on accurate legally required disclosures in the sale of certain items, such as automobiles. Auto dealers must make certain disclosures about the vehicles they sell and when, for example, they fail to disclose to buyers that a vehicle suffered certain damage, there is a violation of the ICFA[vi]. Where inspection reports are required by state or local municipalities, the reports must be accurate. In the sale of homes, especially older homes, there is a potential for payoffs and fraud. In the example where a false termite inspection report was provided in a home inspection, the false report[vii] is an ICFA violation.
Not only the information involved in a commercial transaction receives the attention and force of the ICFA, the process in which the deal is handled may also be protected. In the example where a homeowner and their contractor were in dispute over an invoice for services, the plumber[viii] violated the ICFA by threatening to rip our newly installed pipes and turn off the water service unless the homeowner paid the bill.
Violations and ICFA damages are sought in both Illinois criminal and civil courts.
The office of the Illinois Attorney General has broad power to investigate and enforce the elements of the ICFA to protect the safety of Illinois residents and consumers from fraudulent, unfair and deceptive business practices.[ix] The Attorney General can investigate suspects and defendants charged with violations, requiring them to submit written statements as the office also conducts discovery, issues subpoenas for individuals and documents and conducts prosecution hearings and trials. There are harsh penalties for contempt when an individual or organization fails to comply with the Attorney General.
In civil cases for damages, a private citizen, often hires a consumer rights lawyer to file an individual lawsuit for damages as result of a violation of the ICFA protections against consumer deception and fraudulent practices. The violated consumer may recover compensatory damages, punitive damages and attorney’s fees if they succeed in proving an ICFA violation.
In order to establish and prove a consumer fraud or deceptive practices violation the plaintiff must prove that there was, (1) a deceptive act or practice, (2) the defendant in the case relied on the plaintiff’s deception, and (3) that deception occurred in trade or commerce, (4) where the defendant suffered actual damages, proximately caused by the deception. For example, if you sell me a car from your dealership with a bogus damage disclosure, and the wheel falls off, leading to a car wreck, I can hire a lawyer, sue you and likely win money in court to pay for the damages, injuries, to punish you and pay for my lawyer.
The Zamparo Law Group, P.C. will enforce the law and protect your consumer rights.
If you are involved in a bad business deal or transaction and believe that the other party violated the Illinois Consumer Fraud and Deceptive Business Practices Act, you may call the Zamparo Law Group and ask for a free case review. The Zamparo Law Group attorneys will tell you if your bad business deal is covered by the ICFA and whether you have a cause of action against another individual or organization that you may be able to win or settle in or out of court.
To learn more about consumer protection law and the Zamparo Law Group, please visit the firm’s website. You may also ask for a free case review. The Zamparo Law Group is connected on social media, please follow us and share our resources we share on our Facebook, Twitter and LinkedIn pages. You may call the Zamparo Law Group with any questions by dialing (224) 875-3202.
[ii] Omitted: “or the use or employment of any practice described in Section 2 of the “uniform Deceptive Trade Practices Act”, approved August 5, 1965.”
[iii] ICFA 815 ILCS 505/2, Sec. 2 Unfair methods of competition and unfair or deceptive acts or practices.
[iv] ICFA 815 ILCS 505/2A
[v] ICFA 815 ILCS 502/1(g)
[vi] Totz v. Continental DuPage Acura, 236 Ill. App. 3d 891 (1992).
[vii] Warren v. LeMay, 142 Ill. App. 3d 550 (1986).
[viii] Ekl v. Knecht, 223 Ill. App. 3d 234 (1991).
[ix] ICFA 815 ILCS 505/3-6