Pub. 8 2018 Issue 2

8 AUTOMOBILE DEALER NEWS ILLINOIS www.illinoisdealers.com I n Illinois, the Consumer Fraud and Deceptive Business Practices Act (the “Act”) is a powerful enforcement tool designed to address and eradicate unfair and deceptive acts and prac- tices in the marketplace. The Act grants the Illinois Attorney General the power to enjoin such acts or practices and seek penalties and other relief. Section 2 of the Act provides, in part: “Unfair methods of competi- tion and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact, or the use or employment of any practice described in Section 2 of the ‘Uniform Deceptive Trade Practices Act’, approved August 5, 1965, in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or dam- aged thereby.” (815 ILCS 505/2). TheAct also creates a private right of ac- tion allowing private citizens to commence a lawsuit to seek redress for wrongs, includ- ing actual economic damages or other re- lief which the court deems proper. Courts can also award punitive damages under certain circumstances involving willful or intentional conduct. (815 ILCS 505/10a). Significantly, for motor vehicle deal- erships, the Act specifically prohibits the failure to refund down payments to customers who fail to secure financ- ing. Section 2C of the Act provides: “If the furnishing of merchan- dise, whether under purchase order or a contract of sale, is conditioned on the consumer’s providing credit references or having a credit rating acceptable to the seller and the seller rejects the credit application of that consumer, the seller must return to the consumer any down payment, whether such down payment is in the form of money, goods, chat- tels or otherwise, made under that purchase order or contract and may not retain any part thereof. The retention by the seller of part or all of the down payment, whether such down payment is in the form of money, goods, chattels or other- wise, under those circumstances as a fee for investigating the credit of the consumer or as liquidated dam- ages to cover depreciation of the merchandise which was the subject of the purchase order or contract or for any other purpose is an unlaw- ful practice within the meaning of this Act, whether that fee or those charges are claimed from the down payment, whether such down pay- ment is in the form of money, goods, chattels or otherwise, or made as a separate charge to the consumer.” (815 ILCS 505/2C). Under the Act, the term “down payment” is broad, and includes all forms of down payment, whether money, goods, chattels or other forms. Dealerships are prohibited from retaining any part or portion of the down payment regardless of the reason. This means the dealership cannot keep all or part of the down payment (regardless of form) as a fee for investigating the credit of the consumer, as liquidated damages to cover damage or depreciation of the pur- COUNSELOR’SCORNER Failure to Secure Vehicle Fi Legal Obligation to Return Down Pa BY JULIE CARDOSI, LAW OFFICE OF JULIE A. CARDOSI, P.C.