Direct Deception Not Necessary in Consumer Fraud By Omission, Rules Appeals Court

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In a consumer fraud class action, the Fifth District Court of Appeal has ruled that consumers may sue over a manufacturer's intentional suppression of important facts, even when when disclosure of the hidden information would have alerted the consumer to the product's dangers and caused the consumer not to purchase the product. In De Bouse v. Bayer, 5-06-0077 (Oct. 9, 2008), plaintiff Teresa De Bouse filed a proposed class action against pharmaceutical companies Bayer and GlaxoSmithKline, as well as several individuals, alleging that they violated the Illinois Consumer Fraud and Deceptive Business Practices Act by intentionally concealing information casting doubt on the safety and efficacy of the statin drug Baycor.

This is actually the second appellate decision in De Bouse; the Illinois Supreme Court had returned it to the appeals court with instructions to reconsider it in light of a contemporary decision on the Consumer Fraud Act called Barbara's Sales v. Intel Corp., 227 Ill. 2d 45, 879 N.E.2d 910 (2007). In that case, the state Supreme Court held that claims that a product was "the best" was "puffing" (routine exaggeration by advertisers) and did not amount to deception. Thus, a deceptive advertising campaign was not enough to violate the Consumer Fraud Act in this case, the Supreme Court ruled. The Fifth District, on remand, pointed out that while the drug makers were accused of a deceptive advertising campaign, their campaign was not "puffing" and involved alleged suppression of material facts so Barbara's Sales did not apply.

The original appeal to the appeals court came with three certified questions:
1. May a consumer who bought a drug that was later recalled for safety reasons bring a Consumer Fraud Act case, even if she was not directly marketed to?
2. Is offering a drug for sale an implicit representation that it's safe, under Illinois law, such that the manufacturer is liable under the Consumer Fraud Act?
3. Are omissions or fraudulent statements, made to a third party but intended to influence a consumer's decisions, enough to support a Consumer Fraud Act claim?

On remand, the appeals court pointed out that the drug makers in this case are accused of indirect deception -- that is, deception of a decision-maker that the plaintiff trusted, her doctor -- and deception by silence or concealment. The state Supreme Court has ruled that both are forms of fraud under the Consumer Fraud Act, the appeals court said, and thus it can answer yes to questions one and three. It declined to answer question two because it mixes questions of fact and law, which is impermissible under Illinois Supreme Court Rule 308(a). Finally, the appeals court denied the defendant's appeal of class certification as untimely, despite a clerical error that delayed notice of the certification. The remainder of the case was remanded to the trial court. Justice Welch, dissenting, argued that defendants should have been granted summary judgment because the plaintiff has admitted that she was not directly deceived.

Based in Chicago and Oak Brook, Ill., DiTommaso-Lubin protects consumers' rights in health care product fraud cases and class action lawsuits. If you've been harmed by a defective prescription drug or other health product and you'd like to learn more about your legal options, please contact our Chicago class action lawyers and consumer attorneys today for a free consultation.

Appeals Court Rules Contract Not Valid After 'Material Modifications'

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Changes to a contract invalidated a business owner's agreement to sell his auto dealership, the Illinois Third District Court of Appeal has ruled. In Finnin et al v. Bob Lindsay Honda-Toyota, 3-05-0428 (June 29, 2006), the court ruled that a trial court properly granted summary judgment to the defendant, because the plaintiffs made material changes to the contract that was allegedly breached.

The dispute dates to March of 2002, when the three plaintiffs, including Michael Finnin, approached defendant Robert Lindsay about selling his Toyota-Honda dealership in Knox County. The parties, and their lawyers, worked out the details of the sale over several months and eventually signed an agreement incorporating those details. In August, an assistant to Lindsay's attorney sent a copy of the agreement, with all of the agreed-on conditions that were then current, and with Lindsay's signature. On receipt, the plaintiffs' attorney noticed two mistakes, including a substantially lower purchase price than the parties had agreed on. The attorneys discussed the problem at the time, and Lindsay's attorney suggested that the draft be returned so that he could send out a corrected version. The plaintiffs' attorney took no action.

Eight or nine days later, Lindsay himself phoned Finnin to tell him that he was selling the dealership to another buyer. Finnin and his fellow plaintiffs decided they still wanted to buy the dealership, and their attorney made the necessary changes to the draft that day. Lindsay still sold the dealership to the third party, and the plaintiffs sued for breach of contract. The trial court granted Lindsay summary judgment, saying that even though the changes plaintiffs made to the contract were consistent with the parties' intent, they consisted of a counteroffer to his offer, and thus there was no contract to breach.

The Third District Court of Appeal agreed. In its analysis, the appeals court noted that Illinois law has long required that an acceptance must conform exactly to an offer in order to create a contract. If any changes at all are made in the acceptance, the court said, it is a nonbinding counteroffer. That's true even in this case, where the court agrees that the changes merely reflected the parties' intent. It also rejected the plaintiffs' argument that the Uniform Commercial Code should apply, noting that the UCC applies to merchants rather than investors. Thus, it upheld the trial court's decision to grant summary judgment to the defendant.

From offices in or near Oak Brook, Naperville, Wheaton and Chicago, DiTommaso-Lubin handles breach of contract cases and other business litigation in Chicago and throughout Illinois. Please visit our Web site to learn more about our case results and speak with our Chicago business trial and commercial litigation lawyers confidentially about you case.

Appeals Court Rules Small Business Cannot Sue Bank Over Embezzlement

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A small business may not sue a bank for allowing a minority shareholder to embezzle, the Illinois Second District Court of Appeal has ruled. In Time Savers, Inc. v. LaSalle Bank, N.A., 02-06-0198 (Feb. 28, 2007), the company had sued its bank for breach of contract, common-law fraud, conspiracy to defraud, aiding and abetting and violating the Illinois Fiduciary Obligations Act.

The case stems from bad loans taken out by the minority shareholder in construction and maintenance equipment supplier Time Savers (TSI), Stephen Harrison. He owned 20% of the company and shareholder Lawrence Kozlicki owned the remaining 80%. Harrison also owned another business, RDSJH Equipment Venture, that does the same kind of equipment supply business. Kozlicki has no ownership interest in RDSJH, but the two companies did business together. Between 1997 and 2001, Harrison, through TSI, refinanced existing loans and took out new ones with LaSalle Bank seven times. With these loans, Harrison financed new equipment purchases for RDSJH; the equipment was then rented to TSI, allowing RDSJH to enrich itself at TSI's expense.

Kozlicki and TSI contended that LaSalle suspected or knew that the loans were for Harrison's personal benefit, but failed to alert Kozlicki or investigate further. TSI pointed to various documents and communications, as well as the fact that some funds were deposited into an RDSJH account. The complaint at issue in this appeal is the third amended complaint by TSI; the company voluntarily dismissed the original complaint and the DuPage County trial court dismissed the first, second and third amended complaints at LaSalle's request. (The bank also moved for sanctions after the third amended complaint was dismissed.) The final dismissal is the subject of this appeal.

In its analysis, the Second District sided with the trial court. Most importantly, it found that TSI had failed to show that LaSalle or its employees had actual knowledge of Harrison's embezzlement. Documents cited did not demonstrate Harrison's wrongdoing, and because the bank knew Harrison was a shareholder in both TSI and RDSJH and the two companies did business together, there was no reason that the bank should have suspected anything unusual from the entanglement of the companies' finances. For the same reasons, the court said, the bank knew nothing that would have obligated it to investigate the situation further, and the plaintiff could not show that it deliberately failed to investigate.

Thus, the charges of conspiracy, aiding and abetting and violation of the Fiduciary Obligations Act failed. The common-law fraud count failed, wrote the court, because TSI failed to cite specific examples of false representations made by LaSalle. Thus, the appeals court upheld the trial court's dismissal of TSI's complaint with prejudice.

The Chicago business trial attorneys and commercial litigation lawyers at DiTommaso-Lubin represent businesses and individuals in Chicago and throughout the Midwest who are seeking to recoup the costs of fraud, embezzlement and other financial crimes. To learn more about our firm and see our favorable results in past cases, please visit our Web site.

Best Websites to Learn About Consumer Law Issues -- Our Chicago Consumer Attorneys Can Assist You in Your Internet Fraud, Lemon Law, Auto and RV Fraud, Unfair Debt Collection, Unfair Wage Practices Claims and Other Consumer Rights Lawsuits

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The National Consumers League's Fraud Center is one of the best informational websites on the internet to learn about consumer rights and protection issues. Informed consumers are best armed to protect themselves from consumer scams and consumer frauds. The website contains sections for Telemarketing Fraud, Internet Fraud, Scams Against Businesses, Scams Against Elderly, Counterfeit Drugs, and a Fraud News section.

DiTommaso-Lubin is a private consumer rights law firm who associates with other law firms around the country that can help you recover funds lost due to fraud against brick and mortar companies in the United States with assets. All too often with many internet and telemarketing frauds this may not be possible as the scam artists may be overseas, hard to locate or without assets.

Class action lawsuits our firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso-Lubin is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers' rights are protected from corporate misdeeds.

Our Naperville, Waukegan, Wilmette, Wheaton, Oak Brook, and Chicago consumer attorneys provide assistance in consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer protection lawyers here who can assist in lemon law, unfair debt collection, junk fax, prerecorded telephone solicitations, and other consumer, consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.


FTC Website Provides Useful Tips for Recognizing Telephone and Telemarketing Fraud -- Our Chicago Area Consumer Lawyers and Telemarketing Fraud Attorneys Can File Private Lawsuits if You are the Victim of Telephone or Telemarketing Fraud

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The Federal Trade Commission ("FTC") website provides useful information regarding recognizing telephone and telemarketing frauds.
The website states:

Who’s Calling? Recognize & Report Phone Fraud Recognize Phone Fraud Every sales call you get by phone is an opportunity for a gut check: Ask yourself these questions — and if the answers give you some doubt about the caller’s intentions or methods, end the call.

Who’s calling — and why? Telemarketers must tell you it’s a sales call, the name of the seller and what they’re selling before they make their pitch. If they don’t, say “no thanks,” and get off the phone.

What’s their hurry? Fast talkers who use high pressure tactics could be hiding something. Take your time. Most legitimate businesses will give you time and written information about an offer before asking you to commit to a purchase.

If it’s free, why are they asking me to pay? Question charges you need to pay to redeem a prize or gift. Free is free. If you have to pay, it's a purchase - not a prize or a gift.

Why am I “confirming” my account information — or giving it out at all? Some callers have your billing information before they call you. They’re trying to get you to say “okay” so they can claim you approved a charge.

What time is it? The law allows telemarketers to call only between 8 am and 9 pm. A seller calling earlier or later is flouting the law.

Do I want more calls like this one? If you don’t want a business to call you again, say so. If they call back, they’re breaking the law.

Report Phone Fraud
Recognizing fraudulent callers is important; reporting them to the appropriate law enforcement authorities is critical, too. When you report, you can help stop telephone scammers. Report telephone hucksters to the FTC and your state Attorney General so they can prosecute fraudulent telemarketers who try to steal your money.

If your number is on the National Do Not Call Registry, you should get calls only from those companies with which you do business — or those that have your permission to call. If you get calls from a company you don’t have a relationship with — or from a company you have told not to call you — report it. Jot down the name and number of the caller, and the date and time of the call.

To report phone fraud, visit FTC.gov or call 1-877-FTC-HELP.

To report violations of the National Do Not Call Registry, visit DoNotCall.gov or call 1-888-382-1222.

Your complaint is entered into the Consumer Sentinel Network, a database that is used by law enforcement agencies across the country and around the world. It can help them track down scam artists, detect patterns in their calls, find other victims, and ultimately, stop the fraud.

Register Your Number
You can limit the number of telemarketing calls you receive by placing your phone number on the National Do Not Call Registry. Once your number is registered, feel free to hang up if you get a cold call from a company with which you don't already do business — or report it!

You can register your phone number at DoNotCall.gov, or by calling 1-888-382-1222 (TTY: 1-866-290-4236) from the number you wish to register. If you register online, you must click on the confirmation email you receive to complete your free registration.

Your registration will not expire. Your number is on the list until you take it off, or your number is disconnected and re-assigned to someone else.

Placing your number on the Registry stops most telemarketing calls, but not all. Once your number has been on the Registry for 31 days, you still may get calls from, or on behalf of:

Political organizations, charities, and pollsters

Companies with whom you have an existing business relationship
Companies you’ve given permission to call
Companies that you do business with may call for 18 months. If you ask a company for information, it may call for three months.

The Registry accepts personal cell phone and home phone numbers. Federal Communications Commission regulations prohibit the use of automated dialers to call cell phone numbers, so most telemarketers won’t cold-call consumers on their cell phones – despite urban myths and emails to the contrary.

Telemarketing fraud is a crime.
Professional criminals posing as legitimate telemarketers try to worm their way into your wallet. They are very good at what they do: their “pitch” is perfect, their tone is friendly and sincere, and their answers to your questions seem to make sense. It’s no wonder that consumers, regardless of their age, education or experience, can fall for telemarketing frauds.

By learning how to recognize and report telephone fraud, you can help stop some scams – and if you put your phone numbers on the National Do Not Call Registry, you can reduce the number of unwanted telemarketing calls you get.

Check ftc.gov/phonefraud for information about:

Buying Club Memberships
Charities and Fundraising
Credit & Loan Offers
Government Grant Scams
Identity Theft & Telemarketing
Medical Discounts Plans
Reloading Scams
Sweepstakes & Lotteries
Travel Scams
Work-at-Home & Business Opportunities
To learn more about how to recognize and report phone fraud, and how to place your phone number on the National Do Not Call Registry, go to ftc.gov/phonefraud.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.

If you are a victim of telephone fraud or a telemarketing scam our Illinois based consumer fraud and class-action private sector lawyers may be able to assist you obtaining redress if the FTC, Illinois Attorney General or other government agency is unable to help you get your money back.

Class action lawsuits our firm has been involved in or spear-headed have led to very large consumer recoveries and in addition substantial awards totalling over a million dollars going to national and local consumer rights organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso-Lubin is proud of our achievements in assisting national and local consumer organizations and law school legal aid clinics obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers' rights are protected from corporate misdeeds.

Our Naperville, Waukegan, Wimette, Highland Park, Wheaton, Oak Brook, and Chicago consumer attorneys provide assistance in consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer protection lawyers here who can assist in lemon law, tele-marketing fraud, infomercial scams and frauds, unfair debt collection, junk fax, pre-recorded telephone solicitations, and other consumer, consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.


Best Websites to Learn About Consumer Law Issues -- Our Chicago Consumer Attorneys Can Assist You in Your Lemon Law, Predatory Lending, Auto and RV Fraud, Unfair Debt Collection, Unfair Wage Practices Claims and Other Consumer Rights Lawsuits

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One of the best websites to obtain information about consumer law topics and purchase consumer and lawyer oriented publications and books about consumer rights issues is the website of the National Consumer Law Center.

A particularly well done book offered by the National Consumer Law Center is called Surviving Debt. It is a "how to" book that consumers can use to learn about their rights regarding matters such as unfair debt collection practices. The National Consumer Law Center provides a detailed description of the book.

The National Consumer Law Center describes Surviving Debt as follows:

This new edition contains strategies on:

Dealing with debt collectors
Saving your home or car
Which debts to pay first and common mistakes consumers make that can actually get them into even more trouble
Managing credit card debt
Stopping eviction, lockouts and utility shut-offs
When you should and should not worry about your credit rating
When to refinance
Student loan consolidation options
How to find effective credit counseling agencies
Alternatives to filing bankruptcy and more
And includes a detailed index, and list of helpful websites
You Have Many Important Consumer Rights

If you are having debt problems, you may feel overwhelmed and powerless. During periods of financial hardship, you may not have the resources to pay pressing debts, to meet family needs, and to get necessary legal help. You may feel helpless to fight debt collectors pressing you for payment or threatening to seize your home, car, or other possessions.

In writing this book, we hope to help you even the playing field, and to make the best choices possible despite difficult financial circumstances. We will explain which debts you can ignore for a period of time while you get back on your feet. When you cannot ignore a particular debt without serious consequences, such as foreclosure or repossession, this book sets out helpful options to deal with these problems, both in the short term and the long run.

This book also explains your rights as a consumer. You are not powerless. Many federal and state laws are designed to provide help to people facing financial problems. These include protection against abusive debt collectors, relief from unfair business practices, limits on wage garnishments and seizures of property, and the right to eliminate many obligations in bankruptcy. In most cases, however, you need to know about your rights in order to exercise them. This book attempts both to explain these rights and tell you when and how to utilize them.

Class action lawsuits our firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocates, the National Consumer Law Center, and local law school consumer programs. DiTommaso-Lubin is proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers' rights are protected from corporate misdeeds.

Our Naperville, Aurora, Elgin, Wilmette, Highland Park, Waukegan, Wheaton, Oak Brook, and Chicago consumer attorneys provide assistance in consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases we have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Chicago area consumer protection lawyers here who can assist in lemon law, unfair debt collection, junk fax, prerecorded telephone solicitations, and other consumer, consumer fraud or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.


Dealer Implied Warranty Applies to Manufacturer When They Have an Agency Relationship, U.S. District Court Rules

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As Illinois and Chicago area consumer rights attorneys with a substantial auto dealer fraud and lemon law practice, we were pleased that a federal district court ruled in October that a manufacturer may be held liable for a dealer's implied warranty under the Magnuson-Moss Warranty Act. Semitekol v. Monaco Coach Corporation, No. 06 C 6424 (Oct. 21, 2008), is an RV dealer fraud case pending in the Northern District of Illinois. The plaintiffs, a married couple, purchased a Monaco motor home from an RV dealer, Barrington Motor Sales. The motor home turned out to have electrical problems, a malfunctioning air-conditioner and heating problems. Numerous attempts to fix it were unsuccessful, and the motor home spent 180 of the 341 days they owned it in repair shops before the couple revoked its acceptance of the motor home.

The couple sued Monaco, among others, alleging that it breached its own written warranty, the federal Magnuson-Moss Warranty Act and the implied warranty of merchantability created by Illinois law. Monaco moved to dismiss the implied warranty allegation, arguing that Illinois law requires direct contact between a buyer and seller to create an implied warranty. In this case, the manufacturer pointed out, Barrington Motor Sales was the actual seller of the Monaco motor home. The plaintiffs responded by arguing that direct contact in this case was established by BMS's advertising and actual status as an "authorized Beaver Monaco dealership"; the fact that Monaco referred customers to BMS to deal with problems and customer service concerns; consumers' ability to find and contact BMS through Monaco's Web site; BMS's authorization to distribute Monaco publications; and the fact that plaintiffs had the option of picking up their new motor home at either company.

In its analysis, the district court agreed that BMS was acting as Monaco's agent. It dismissed arguments that past caselaw does not support such a finding, pointing out that unlike the current plaintiffs, none of the plaintiffs in the cases the defense cited showed any evidence for an agency relationship. The court did not agree that there actually was an agency relationship, or even that an agency relationship is enough to establish the direct contact necessary to prove an implied warranty under Illinois law. Rather, it pointed out that these are questions of fact that are improper to resolve with a motion to dismiss. Thus, the motion was denied. Dismissal motions by BMS and two parts manufacturers also failed.

Based in Chicago and in Oak Brook, Ill., DiTommaso-Lubin handles auto dealer and motor home dealer fraud and other consumer fraud litigation for clients in Wheaton, Naperville,Waukegan, Joliet, Aurora, Elgin and in other parts of Illinois, the Midwest and throughout the United States. In addition to helping individuals and families, our Chicago class action attorneys have successfully handled numerous consumer rights class actions. If you believe you're a victim of fraud and misrepresentations by an auto dealer or other business, please contact us as soon as possible to learn about your rights at a free consultation.