Articles Posted in Consumer Fraud/Consumer Protection

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Yes, the Illinois Attorney General can sue your company for consumer fraud (In re Tapper, 123 B.R. 594 (1991)), (People of State of Ill. ex rel. Hartigan v. Commonwealth Mortg. Corp. of America, 732 F.Supp. 885 (1990), (People of State of Ill. v. Life of Mid-America Ins. Co., 805 F.2d 763 (1986). The Attorney General can act under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFDBPA), and can take action when there is reason to believe that your company is engaging in, or about to engage in, any method, act, or practice declared unlawful under the ICFDBPA (People of State of Ill. v. Life of Mid-America Ins. Co., 805 F.2d 763 (1986)), (People ex rel. Devine v. Time Consumer Marketing, Inc., 336 Ill.App.3d 74 (2002)), (People ex rel. Madigan v. United Const. of America, Inc., 2012 IL App (1st) 120308 (2012)).

The Attorney General can file a lawsuit to halt deceptive practices without needing to demonstrate anyone has been directly harmed, a requirement necessary for a private plaintiff. B. Sanfield, Inc. v. Finlay Fine Jewelry Corp., 168 F.3d 967 (1999)), (Harris v. Kashi Sales, LLC, 609 F.Supp.3d 633 (2022)). Deceptive practices can include deceptive advertising or violations of the Illinois Consumer Fraud Act and the Illinois Uniform Deceptive Trade Practices Act (People of State of Ill. ex rel. Hartigan v. Commonwealth Mortg. Corp. of America, 732 F.Supp. 885 (1990)), (People ex rel. Devine v. Time Consumer Marketing, Inc., 336 Ill.App.3d 74 (2002)).

The Attorney General can file suit under the ICFDBPA when it appears your company has engaged in, is engaging in, or is about to engage in practices declared to be unlawful by the Act (815 ILCS 505/3), (815 ILCS 505/6.1). The Attorney General has the power to obtain and impose injunctions, and the ICFDBPA provides the Attorney General with the full authority to impose an injunction that can effectively tie up the company’s known assets. People of State of Ill. ex rel. Hartigan v. Peters, 871 F.2d 1336 (1989). They can even bring an action in the name of the People of the State against your company to restrain by preliminary or permanent injunction the use of such method, act, or practice (People ex rel. Devine v. Time Consumer Marketing, Inc., 336 Ill.App.3d 74 (2002), (815 ILCS 505/7).

However, a nonresident plaintiff can only sue under the ICFDBPA if the circumstances leading to the cause of action primarily and substantially occurred in Illinois. Irwin v. Jimmy John’s Franchise, LLC, 175 F.Supp.3d 1064 (2016). The company’s headquarters being located in Illinois is not a decisive factor as to whether a nonresident possesses standing to sue under the ICFDBPA. Irwin v. Jimmy John’s Franchise, LLC, 175 F.Supp.3d 1064 (2016).

It’s important to note that under the ICFDBPA, to state a claim, a plaintiff must show a deceptive or unfair act or promise by the defendant, the defendant’s intent that the plaintiff rely on the deceptive or unfair practice, and that the unfair or deceptive practice occurred during a course of conduct involving trade or commerce (Harris v. Kashi Sales, LLC, 609 F.Supp.3d 633 (2022)).

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Hiring Lubin Austermuehle to defend your company in an Illinois Attorney General consumer fraud investigation could be strategically beneficial for several reasons:

  1. Focus on Consumer Law: Lubin Austermuehle likely has a comprehensive understanding of consumer law, particularly as it pertains to the regulations and practices within Illinois. This focus on consumer law can be critical in navigating the specifics of a consumer fraud investigation conducted by the state’s Attorney General.
  2. Experience with Regulatory Bodies: If the firm has experience dealing with regulatory bodies, including the Illinois Attorney General’s office, it can provide your company with an advantage. Such experience means the firm understands the procedures, expectations, and typical workflows of the office, which can lead to more effective communication and negotiation.
  3. Defensive Strategies: The firm can develop robust defensive strategies tailored to the specifics of your case. This can include challenging the validity of the investigation, negotiating for lesser penalties, or demonstrating compliance with consumer protection laws.
  4. Preventive Advice: Beyond just defense, Lubin Austermuehle can offer preventive advice to help your company avoid future legal pitfalls. This includes revising current business practices, improving compliance protocols, and training staff to adhere to state and federal consumer laws.
  5. Reputation Management: During an investigation by the Attorney General, maintaining a positive public image is crucial. A law firm experienced in handling such cases can help manage the public and media perception, which is vital for preserving customer trust and company reputation.
  6. Cost-Effective: While defending against a consumer fraud investigation can be expensive, a specialized firm like Lubin Austermuehle might offer more cost-effective solutions through efficient management of the case, potentially reducing long-term costs associated with prolonged legal battles or heavier penalties.
  7. Personalized Attention: Depending on the size and focus of the firm, your company might benefit from more personalized service, ensuring that your specific needs and concerns are addressed promptly and thoroughly.

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Yes, a business can be considered a consumer under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) and can therefore file a suit under this Act. The ICFA allows private plaintiffs, including corporations, to file a suit if they can demonstrate damage due to a violation of the Act. The Act is designed to protect consumers, borrowers, and businesses against fraud, unfair competition, and other unfair and deceptive business practices. Importantly, the Act extends its protections to business entities as well.

The term “consumer” under the ICFA is defined as any person who purchases merchandise “not for resale in the ordinary course of his trade or business”. This means a business can be considered a consumer if it buys goods or services for its use and not for resale. For example, courts have found businesses to be consumers under the Act when they purchased insurance services for their own use. Yes, a business can be considered a consumer under the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) and can therefore file a suit under this Act. The ICFA allows private plaintiffs, including corporations, to file a suit if they can demonstrate damage due to a violation of the Act. The Act protects consumers, borrowers, and businesses against fraud, unfair competition, and other unfair and deceptive business practices. Importantly, the Act extends its protections to business entities as well. Lefebvre Intergraphics v. Sanden Mach. Ltd., 946 F. Supp. 1358, 1369 (N.D. Ill. 1996) (finding that Plaintiff bought Defendant’s printing press for its own use and not for resale in the ordinary course of its business.); Labella Winnetka, Inc. v. Gen. Cas. Ins. Co., 259 F.R.D. 143 (N.D. Ill. 2009) (finding that Plaintiff is a consumer where it purchased Defendant’s insurance services for its own use and not for resale.); Commonwealth Ins. Co. v. Stone Container Corp., 2001 WL 477151, *4 (N.D. Ill. May 3, 2001) (same).

Please note that the definition of “person” under the Act includes legal or commercial entities such as corporations. This further supports the notion that a business can be a consumer under the Act.

If a business does not meet the definition of a “consumer” under the Act, it must establish a connection to consumer protection concerns in its claim. It needs to demonstrate that the deceptive or unfair practices in question have implications beyond the immediate contractual relationship and could potentially harm other consumers or the market more generally.

To prove a claim under the Illinois Consumer Fraud Act, a plaintiff must show (1) a deceptive act or practice by the defendant; (2) the defendant’s intent that the plaintiff relies on the deception; (3) that the deception occurred in the course of conduct involving trade and commerce; and (4) damages. Note that the Consumer Fraud Act does not authorize a suit by a non-consumer where there is no injury to consumers. Therefore, a business must show actual damage as a consequence of a violation of the Act. Also, to meet the causation element of a claim under the Consumer Fraud Act, a plaintiff must have actually been deceived in some manner by the defendant’s alleged misrepresentations of fact.

It’s essential to understand that the ICFA does not apply to every contract dispute, and failure to fulfill contractual obligations alone does not necessarily constitute a deceptive act or practice. Furthermore, a lawsuit under the ICFA cannot be based on the filing or threat to file time-barred suits without specific allegations of actual damages.

Please note that the definition of “person” under the Act includes legal or commercial entities such as corporations. This further supports the notion that a business can be a consumer under the Act. Continue reading ›

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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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Fake internet reviews can potentially state claims for deception under Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) laws. UDAAP laws are designed to protect consumers from deceptive practices by businesses, including misleading statements about products and services. This protection ensures consumer confidence, particularly in financial transactions, and it addresses unfair practices that can financially harm consumers and which they cannot reasonably avoid.

Under these laws, if a business or service provider uses fake reviews to deceive consumers into making purchases or forms a misleading impression about their products or services, this could be construed as a violation of UDAAP. Civil penalties may apply in these cases, regardless of whether the deceptive acts were committed intentionally or accidentally. It’s important to note that the scope of UDAAP violations is broad and can encompass a range of deceptive practices, including those occurring in online environments.

The Federal Trade Commission (FTC) has specifically addressed the issue of fake reviews and other misleading endorsements. The FTC is exploring rulemaking to combat deceptive or unfair review and endorsement practices, including the use of fake reviews, suppression of negative reviews, and payment for positive reviews. These actions are considered deceptive and can mislead consumers who rely on reviews for genuine feedback on products or services, and they can unfairly disadvantage honest businesses.

Overall, fake internet reviews have the potential to fall under UDAAP violations due to their deceptive nature and the misleading information they present to consumers. Continue reading ›

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In Illinois, the pleading requirements for consumer fraud and common law fraud differ in several key aspects:

  1. Common Law Fraud: To establish a case for common law fraud, you must demonstrate five elements:
    • A false statement of material fact made by the defendant to the plaintiff.
    • The defendant knew the statement was false.
    • The statement was made with the intent that the plaintiff would rely on it.
    • The plaintiff did rely on the statement.
    • The plaintiff suffered damage due to this reliance.
  2. Consumer Fraud: Under the Illinois Consumer Fraud Act, the requirements are slightly different and only four elements are needed:
    • A deceptive act or unfair practice (involving a public policy violation) by the defendant.
    • The defendant intended for the plaintiff to rely on the deception.
    • The deception or unfair practice occurred in the course of trade or commerce.
    • The plaintiff suffered actual damage as a result of the defendant’s violation of the act.

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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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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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Consumer protection is a cornerstone of the legal system, and the Illinois Consumer Fraud and Deceptive Business Practices Act (ICFA) plays a pivotal role in safeguarding consumers from deceptive practices. Recent opinions from the Illinois Supreme Court and various state and federal courts in Illinois have provided crucial guidance on the interpretation and application of the ICFA. In this blog post, we will explore some of these significant opinions and their implications for consumers and businesses.

“Here are some recent Illinois consumer fraud decisions and their key holdings:

1. “Cellular Dynamics, Inc. v. MCI Telecommunications Corp.” (Decided on April 12, 1995). The court held that under the Illinois Consumer Fraud Act, a single deceptive act is sufficient to support recovery and the plaintiff’s failure to allege a public wrong is not fatal to its claim [2].

2. “Barbara’s Sales, Inc. v. Intel Corp.” (Decided on November 29, 2007). The court determined that the Illinois Consumer Fraud and Deceptive Business Practices Act applies only to fraudulent transactions which take place primarily and substantially in Illinois [3, 4].

3. “Costa v. Mauro Chevrolet, Inc.” (Decided on July 18, 2005). The court ruled that assignee of retail installment contract for car sale had no derivative liability under the Illinois Consumer Fraud Act . The court also noted that the FTC Holder Notice has been largely superseded by subsequent federal legislation, namely, section 1641(a) of TILA.

4. “Camasta v. Jos. A. Bank Clothiers, Inc.” (Decided on August 1, 2014). The court found that to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act, a plaintiff must show: a deceptive or unfair act or promise by the defendant; the defendant’s intent that the plaintiff rely on the deceptive or unfair practice; and that the unfair or deceptive practice occurred during a course of conduct involving trade or commerce. In a private action under this act, the element of actual damages requires that the plaintiff suffer actual pecuniary loss.

5. “Rudy v. Family Dollar Stores, Inc.” (Decided on February 4, 2022. The court emphasized that the Illinois Consumer Fraud and Deceptive Business Practices Act is designed to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices.

6. “Landau v. CNA Financial Corp.” (Decided on March 26, 2008). This case reiterated that the Illinois Consumer Fraud and Deceptive Business Practices Act does not have extraterritorial effect and does not apply to fraudulent transactions that take place outside Illinois.

7. “Avery v. State Farm Mut. Auto. Ins. Co.” (Decided on August 18, 2005). The court held that the Illinois Consumer Fraud Act could be applied to consumers residing out-of-state if the deceptive acts and practices were perpetrated in Illinois.

8. “Freeman v. MAM USA Corporation” (Decided on March 23, 2021). The court provided a refined explanation of what a plaintiff must allege in order to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act.

9. “Dwyer v. American Exp. Co.” (Decided on June 30, 1995). This case added that in order to successfully claim under the Illinois Consumer Fraud Act, plaintiffs must also show how they were damaged.

10. “Troutt v. Mondelēz Global LLC” (Decided on October 31, 2022). This case reiterated the broad prohibitions of the Illinois Consumer Fraud Act against unfair or deceptive acts or practices in the conduct of trade or commerce.

11. “Sneed v. Ferrero U.S.A., Inc.” (Decided on February 15, 2023). The court stated that an accurate ingredient list does not immunize a defendant from a deceptive front label under the Illinois Consumer Fraud Act, but it is relevant to determining whether reasonable consumers would be misled

Implications for Consumers and Businesses

These opinions from Illinois courts highlight the continued significance of the ICFA in protecting consumers from deceptive and fraudulent business practices. For consumers, these opinions underscore their rights to pursue legal action when they believe they have been victims of consumer fraud.

For businesses, these opinions serve as a reminder of the importance of conducting business practices in a transparent and ethical manner. Adhering to the ICFA and avoiding deceptive practices is not only legally required but also crucial for maintaining a positive reputation and avoiding costly legal battles.

In conclusion, the Illinois Consumer Fraud and Deceptive Business Practices Act remains a critical tool for consumer protection in Illinois. Recent opinions from both state and federal courts in Illinois reinforce the Act’s role in safeguarding consumers and promoting fair and honest business practices. It is essential for both consumers and businesses to stay informed about these developments and seek legal guidance when necessary to ensure compliance with the ICFA.

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Introduction

Consumer protection laws play a vital role in safeguarding consumers from deceptive and unfair business practices. In the state of Illinois, the Consumer Fraud and Deceptive Business Practices Act (ICFA) serves as a robust framework for addressing such issues. One essential aspect of the ICFA is the “unfairness doctrine,” which empowers consumers by offering recourse against businesses engaging in unfair practices. In this blog post, we’ll delve into the details of the unfairness doctrine under the ICFA, exploring its significance and how it benefits consumers.

Understanding the ICFA

The Illinois Consumer Fraud and Deceptive Business Practices Act, codified at 815 ILCS 505/1 et seq., provides comprehensive protection to consumers against deceptive and unfair business practices. It encompasses a wide range of activities, from false advertising to fraudulent sales tactics, and it allows consumers to seek remedies for damages and injunctive relief.

The Unfairness Doctrine Explained

The unfairness doctrine within the ICFA prohibits businesses from engaging in practices that are “unfair or deceptive.” While the term “deceptive” generally refers to fraudulent or misleading actions, “unfair” practices may not be as immediately evident. The unfairness doctrine serves as a crucial tool for addressing business practices that, while not necessarily deceptive, harm consumers in an unjust or unreasonable manner.

Key Components of Unfairness

To determine whether a business practice is unfair under the ICFA, Illinois courts consider the following factors:

  1. Substantial Injury: The practice must cause substantial harm to consumers, either financially or otherwise. Minor inconveniences or trivial harms typically do not meet this criterion.
  2. Lack of Countervailing Benefits: Courts assess whether the harm to consumers outweighs any potential benefits or justifications offered by the business. If the practice provides significant advantages, it may be considered less unfair.
  3. Consumer Knowledge: The ICFA recognizes that some practices may be considered unfair if consumers lack sufficient knowledge or understanding of the implications. If a practice takes advantage of consumers’ lack of information, it may be deemed unfair.
  4. Public Policy: Courts consider whether the practice violates established public policy. Practices that contravene societal norms and values are more likely to be deemed unfair.

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