Articles Posted in Auto Fraud

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Selling a used car knowing it has a defective engine is illegal in Illinois.
According to the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act), it is unlawful to use deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact with the intent that others rely upon such concealment, suppression or omission (815 ILCS 505/2) Therefore, if a person sells a used car knowing it has a defective engine and does not disclose this information to the buyer, it would be considered a violation of the Act.

The case of Lipinski v. Martin J. Kelly Oldsmobile, Inc. is especially relevant (White v. DaimlerChrysler Corp., 368 Ill.App.3d 278 (2006)). Here, a used-car purchaser alleged that the dealership knew his model of car had a defect that it tended to consume oil, that the dealership failed to inform him of the defect, and that he would not have purchased the car if he knew of the defect. The plaintiff stated all the necessary elements to sustain his claim under the Consumer Fraud Act(White v. DaimlerChrysler Corp., 368 Ill.App.3d 278 (2006)) (Lipinski v. Martin J. Kelly Oldsmobile, Inc., 325 Ill.App.3d 1139 (2001)), (Connick v. Suzuki Motor Co., Ltd., 174 Ill.2d 482 (1996)).

In the case of Hanson-Suminski v. Rohrman Midwest Motors, Inc., the court found that a dealership violated the Consumer Fraud Act by misrepresenting the car’s history and thereby inducing the plaintiff to purchase the car (Hanson-Suminski v. Rohrman Midwest Motors, Inc., 386 Ill.App.3d 585 (2008)).

Several other cases also support the interpretation that misrepresenting or omitting material facts about a car’s condition at the time of sale is actionable under Illinois law.

In conclusion, selling a used car in Illinois with knowledge of a defective engine and not disclosing this to the buyer would be considered a violation of the Consumer Fraud Act.

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Retaining Lubin Austermuehle to sue a used car dealer for used car fraud might be a strategic decision based on several key factors:

Extensive Experience

  1. Knowledge: Lubin Austermuehle is a law firm with significant experience in consumer fraud and commercial litigation, including cases involving used car fraud.
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Several cases in Illinois have awarded punitive damages for auto fraud by used car dealers. One such case is “Gent v. Collinsville Volkswagen, Inc.” where the court upheld punitive damages against the dealership for fraud or gross negligence, though the award was reduced from $12,000 to $3,000 as it was deemed excessive.

In the case “Totz v. Continental Du Page Acura”, punitive damages were awarded to the buyers for misrepresentations about the car’s condition, violating the Consumer Fraud and Deceptive Business Practices Act. This case was referred to in “Pigounakis v. Autobarn Motors”, where the court ruled that punitive damages can be awarded for outrageous conduct, specifically reckless indifference to the rights of others.

The case “Perez v. Z Frank Oldsmobile, Inc.” also awarded punitive damages for fraudulent actions other than misrepresenting a car’s mileage. In “Tague v. Molitor Motor Co.”, a $17,000 punitive damages award was justified due to the dealer’s pattern of bad faith and the danger posed to the customer and others due to unexpected brake failure. Continue reading ›

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In order to win a consumer fraud case about a rebuilt wrecked automobile or vehicle, it would be necessary to demonstrate several key points.

1. The seller misrepresented or concealed the actual condition of the vehicle, such as by failing to disclose that the vehicle was a rebuilt wreck or had sustained significant collision damage, or by falsely advertising the vehicle’s condition or mileage. This could include selling a vehicle with a defective paint job as new, or failing to disclose known safety issues, such as the vehicle’s tendency to accelerate unintentionally.

2. The defendant knew about the actual condition of the vehicle but failed to disclose it in the case of an omission of material fact claim. This could be demonstrated by showing that the seller was more involved in the purchase and sale of vehicles than a private party involved in an isolated transaction, or that a cursory inspection by someone experienced in the automobile business would have revealed the damage. In the case of inaccurate or false statements, knowledge of the falsity of the statement is not required as innocent misstatements can state a claim for consumer fraud.

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“As is” and certain other non-reliance or purported exculpatory clauses under the common law, have not provided a defense against fraud in Illinois courts for decades. This is particularly important where, as in most automobile sales transactions, one party is unsophisticated, and the other party, like a used car dealer, is an expert in the field. As Zimmerman v. Northfield Real Estate, Inc., 156 Ill. App. 3d 154, 164 (1st Dist. 1986), found: “Exculpatory clauses are not favored and are strictly construed and must have clear, explicit and unequivocal language showing that it was the intent of the parties.” And the Consumer Fraud Act contains an anti-waiver provision which makes a sold “as is” clause defense to used car auto fraud matter a non-starter for statutory fraud, even if the common law already did not do that.

The Consumer Fraud Act, like other analogous Illinois statutes, such as the Real-Estate Disclosure Act, has an anti-waiver provision which preludes use of an “as is” clause or the no warranty clause present here to defeat a claim for misrepresentation or knowingly failing to disclose material defects. As the Court in Bauer v. Giannis, 359 Ill.App.3d 897, 906 (2d Dist. 2005) holds:

The policy prohibiting waiver of the obligations under the Act applies with equal force here. By insisting on the “as is” clause, which provides that plaintiff accepted the property without any warranty or representation, defendants in effect sought to obtain a waiver of their obligation under the Act to disclose material defects. … We see nothing in the “as is” provisions of the disclosure form that may be read as allowing a seller to contract out of its disclosure obligations.

Used car dealers may dream that “as is” language or a warranty disclaimer clause ends their obligations to tell the truth and saves them from having to disclose known material defects but that is not the law. If that were the case, there would be no used car consumer fraud claims unless the claims arose out of false written statements labeled as warranties. Used car dealers would then be free to sell cars that they knew were dangerous to drive and that they knew had defects by simply inserting an “as is”, no warranty or other exculpatory clause into a form contract, and then concealing and omitting to disclose those known defects. This would not only violate the Consumer Fraud Act’s prohibition on selling products with known material defects simply by failing to disclose them or by misrepresenting that they did not exist, but it would also violate the dealers’ obligations under the Vehicle Code requiring that they put safe cars on the road. Allowing used car dealers to sell dangerous cars would endanger not only the buyer and the buyer’s family and passengers but also the public. The Vehicle Code makes it: “unlawful for any person to . . . knowingly permit to be driven or moved on any highway any vehicle . . . which is in such unsafe condition as to endanger any person or property …” 625 ILCS §5/12-101(a). Continue reading ›

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In Illinois, damages for inconvenience and aggravation can be claimed in cases of fraud and consumer fraud, but there are important conditions to consider. Under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA), plaintiffs can assert damages stemming from the defendant’s conduct, which can include emotional damages such as aggravation and inconvenience. These types of damages are recoverable under the ICFA only if they are part of a total award that includes actual economic damages.

The Act primarily provides remedies for economic injuries. Actual damages under the ICFA encompass the diminished value of goods or services such as the car was worth far less than the purchase price because it was a rebuilt wreck.  Such damages as in any tort or breach of contract case cannot be based on mere speculation or conjecture but if the defendant’s wrongdoing makes it difficult to calculate more leeway is permitted and damages can always be based on a reasonable valuation or estimate which is data or information driven. The plaintiff must demonstrate that the fraud proximately caused these damages. Hence, if inconvenience, aggravation, and inconvenience damages are the only damages alleged, they are generally not recognized.

In the context of fraud claims, damages for emotional distress, including “aggravation and inconvenience”, are recognized only when the inflicted distress would mean that it would cause a reasonable person under the circumstances such damages.

Lastly, punitive damages, which are awarded in cases of wilful and egregious behavior by the defendant, are also available for a violation of the ICFA. Continue reading ›

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Buying a used car, truck, or SUV should be an exciting experience, but all too often, consumers find themselves facing fraud and deceptive practices by unscrupulous auto dealers. When you’re caught in the web of auto dealer fraud, it’s crucial to have a skilled and experienced Illinois Consumer Rights Lawyer by your side. Why? Because these cases involve complex machines, intricate laws with numerous pitfalls, and a deep understanding of the Illinois Consumer Fraud and Deceptive Business Practices Act. At our Auto Dealer Fraud Firm, we possess the experience and knowledge you need, having successfully handled hundreds of auto fraud cases and even taken many Consumer Fraud Cases to federal and state appellate courts in Illinois and across the nation.

The Complexity of Auto Dealer Fraud Cases

Used vehicles are intricate machines with countless components and systems, making it challenging for the average consumer to detect hidden issues or fraudulent practices. This complexity is compounded by the fact that auto dealer fraud cases often involve a web of deceptive tactics, such as odometer rollbacks, undisclosed accidents, or hidden defects.

The Legal Pitfalls

Navigating auto dealer fraud cases requires a deep understanding of the legal landscape, including state and federal consumer protection laws. In Illinois, the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) plays a central role in protecting consumers from unfair and deceptive practices. However, pursuing a claim under ICFA can be legally complex and rife with pitfalls.

Here are some of the legal challenges you may encounter:

  1. Proving Intent is Not Necessary for Misrepresentations: Intent is not needed for fraud claims under the ICFA involving misrepresentations and dealers are strictly liable for material misstatements even if they were for instance unaware of accident or flood damages.  However intent needs to be proven for material commissions and we have expert witnesses and other methods for establishing such intent including obtaining car auction records
  2. Establishing Material Misrepresentation: It’s not enough to show that a misrepresentation occurred; it must also be proven that the misrepresentation was material, meaning it had a significant impact on your decision to purchase the vehicle.
  3. Navigating Arbitration Clauses: Many dealer contracts include arbitration clauses, which can complicate the legal process. An experienced attorney can help you navigate these clauses to protect your rights.
  4. Statute of Limitations: There are strict deadlines for filing auto dealer fraud claims, and missing these deadlines can result in the loss of your right to pursue a case.

Why Our Auto Dealer Fraud Firm is the Right Choice

When facing auto dealer fraud, you need a legal team that not only understands the complexities of the vehicles but also has a proven track record in handling these cases. At our Auto Dealer Fraud Firm, we have the experience you can trust. Here’s why you should choose us:

  1. Extensive Experience: We have successfully handled hundreds of auto fraud cases, gaining invaluable insights and expertise along the way.
  2. Appellate Experience: We’ve taken Consumer Fraud Cases to federal and state appellate courts in Illinois and throughout the country, showcasing our dedication to achieving justice for our clients.
  3. In-Depth ICFA Knowledge: We are well-versed in the Illinois Consumer Fraud and Deceptive Business Practices Act, ensuring that your case is handled with precision and expertise.
  4. Proven Results: Our track record of securing favorable outcomes for clients speaks for itself.

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In the realm of consumer rights protection and legal representation, Lubin Austermuehle Law Firm stands out as a trusted and distinguished advocate for individuals who have fallen victim to car dealer consumer fraud in Illinois. When it comes to cases involving flood vehicles and rebuilt wrecks, their expertise and commitment to justice are second to none. In this blog post, we’ll explore why Lubin Austermuehle Law Firm is the ideal choice for handling car dealer consumer fraud cases in Illinois, particularly those involving flood vehicles and rebuilt wrecks.

Understanding Car Dealer Consumer Fraud

Car dealer consumer fraud is a serious offense that occurs when dealerships engage in deceptive practices, misrepresenting the condition or history of a vehicle to unsuspecting buyers. Whether it involves selling flood-damaged vehicles, rebuilt wrecks, or any other misrepresented automobiles, the consequences can be financially devastating and pose significant safety concerns for consumers.

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Buying a used car can be an exciting experience, but it comes with risks, particularly when it involves fraud. Fortunately, Illinois has robust consumer protection laws, and recent court decisions shed light on how these laws are applied in cases of used car fraud. In this blog post, we’ll explore key court decisions in Illinois that have significant implications for consumers and dealerships involved in used car transactions.

1. In “Costa v. Mauro Chevrolet, Inc.”, decided on July 18, 2005, the ICFA claim was brought against Mauro Chevrolet, Larson, Bosco, and GMAC. The plaintiffs alleged that GMAC was liable for unfair and deceptive conduct under the Illinois Fraud Act as the holder of their consumer credit contract and that Mauro Chevrolet’s conduct was fraudulent.

2. “Tandy v. Marti”, decided on April 29, 2002, involved a used car buyer who brought a claim under the ICFA against a dealer that sold the car to the seller. The court held that the buyer’s allegations were sufficient to state a claim under the Act.

3. In “Castro v. Union Nissan, Inc.”, decided on July 8, 2002, the claim under the ICFA was against an automobile dealership for failing to return a down payment to customers after they were denied credit to finance the sale of a vehicle. This case relates to the provision under section 2C of the Act, which stipulates that if credit application is rejected, the seller must return any down payment made under that purchase order or contract.

4. “Fleury v. General Motors LLC”, decided on February 1, 2023, involved a putative class action brought by a vehicle buyer against General Motors alleging violation of the ICFA, fraud, and breach of express warranty under Illinois law.

Conclusion

These recent court decisions in Illinois demonstrate the state’s commitment to protecting consumers from deceptive practices in the used car market. Whether through deceptive advertising, misrepresentation of a vehicle’s condition, or fraudulent odometer readings, the courts have consistently upheld consumer rights and held dealerships accountable for their actions.

If you suspect you’ve been a victim of used car fraud in Illinois, it’s crucial to be aware of your legal rights and consider consulting with an attorney experienced in consumer protection and fraud cases. These court decisions serve as a reminder that consumers have legal recourse when they encounter fraudulent practices in the used car industry, ensuring fair and transparent transactions for all. Continue reading ›

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Car fraud can lead to criminal charges in addition to civil suits for consumer fraud as a recent criminal prosecution in Georgia demonstrates.

Police apprehended two employees of Newman, Georgia Nissan franchised dealer. The charges are that they fraudulently altered car purchase documents and forged customers signatures in order to overcharge customers.

A customer of the dealership, Iryna Alfieri claimed that she did not purchase any add-ons or extended warranties when she acquired her Nissan in September. However, these items were still included as part of the deal. Police discovered that the electronic signatures on that portion of the paperwork differed from those on the rest of the documents.

Newnan police wrote in its report that “Ms. Alfeiri [sic] stated that she has tried to get this matter reversed with the dealership[,] however they have not been inclined to address the issue.”

In December, Lindsay Collins, another customer, asserted that the dealership refused to accept the return of her vehicle, which she was attempting to return under the lemon law. She also alleged that her paperwork included forged signatures, and police identified an “apparent difference” in the signatures she pointed out.

On the same day, Justin Steele, another customer, claimed that he had purchased a 2018 Ford F-150 XLT from the same dealership. The dealership, however, listed the vehicle as a Ford F-150 Platinum on the loan application. This could be a part of a practice known as “power-booking,” in which dealers misrepresent the trim level of a vehicle, inflating its value to obtain higher rates from financial institutions. In this case, the difference between the two vehicles was more than $14,000.

The two men accused of this fraud appeared in court for their arraignment hearing where they pleaded not guilty. Continue reading ›

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