Articles Posted in Consumer Fraud/Consumer Protection

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The complaint reads like an indictment of your marketing department. A national class. Allegations that a label, a website disclosure, or a price representation deceived consumers. A nationwide class period stretching back five years. A demand for restitution, actual damages, punitive damages, and a permanent injunction against your business practices. The Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505, is one of the broadest consumer-protection statutes in the country, and the plaintiffs’ bar treats it that way. The complaint is written to make a settlement feel inevitable long before discovery starts.

The complaint is doing what it is supposed to do. The Illinois Supreme Court and the Seventh Circuit have built five distinct doctrinal walls that most ICFA class actions never finish climbing. An Illinois defendant who learns those walls early often resolves the case at the pleading stage or wins at class certification, not after eighteen months of merits discovery. The settlement number a plaintiff demands on day one is usually the number that fits the case the plaintiff hopes to have. It is not the case Illinois law gives them.

The first wall is the extraterritorial limit, set by the Illinois Supreme Court in Avery v. State Farm Mutual Automobile Insurance Co. The Act does not reach a transaction that occurred outside Illinois. The Court held that there is no bright-line formula, but the inquiry asks whether the circumstances relating to the disputed transaction occurred primarily and substantially within Illinois. In Avery itself, a Louisiana plaintiff whose accident, repair, estimate, and dealings with the insurer all happened in Louisiana had no cause of action under the Illinois statute. The implication for class actions is enormous. A putative nationwide class that includes residents of forty-nine other states, whose purchases occurred everywhere except Illinois, runs straight into Avery. Many of these claims should not survive a motion to dismiss as to the out-of-state plaintiffs, and they almost never survive a contested class certification.

The second wall is choice of law in nationwide classes, illustrated by the Seventh Circuit’s decision in In re Bridgestone/Firestone, Inc. Tires Products Liability Litigation. Judge Easterbrook, writing for the panel, reversed certification of two nationwide classes because the claims would have to be adjudicated under the law of so many different jurisdictions that a single nationwide class was not manageable. The Seventh Circuit explained that the choice-of-law rules of the forum state ordinarily point to the consumer-protection law of each plaintiff’s home jurisdiction, not to a single state’s statute applied across the country. The implication for an Illinois ICFA class action that tries to reach beyond Illinois purchasers is direct. Where the trial court would have to apply Illinois law to some plaintiffs, California law to others, New York law to others, and so on, the predominance and manageability findings that Rule 23 demands collapse. Bridgestone is the case that prevents a single Illinois plaintiff from acting as a national consumer-protection regulator through one complaint. Continue reading ›

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

  1. Focus on Consumer Law: DiTommaso Lubin 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, DiTommaso Lubin 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 DiTommaso Lubin 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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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, DiTommaso Lubin 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 DiTommaso Lubin 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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