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Illinois Consumer Fraud and Deceptive Businesses Practices Act Eliminates “Caveat Emptor”
Our Chicago Consumer Fraud Litigation Attorneys and Chicago Consumer Fraud Defense Attorneys have been prosecuting and defending claims under the ICFA for decades. We have successfully defended businesses wrongfully accused of consumer fraud and litigated landmark consumer fraud individual and class action cases in Illinois including winning a seminal case in the Illinois Appellate Court on the standards for certifying an ICFA class action. You can view that decision here. We have also defended our clients wrongfully accused of consumer fraud by the Illinois Attorney General’s Consumer Fraud Division or by attorneys accused of allegedly running an criminal enterprise (in a separate Texas case and in ethics proceedings in Tennessee) of seeking to extort one of our business clients with bogus consumer fraud claims and media publicity designed to try to force a quick settlement in this case where we achieved a settlement including a full retraction and apology for our client in a matter of months.
The ICFA makes it illegal for a defendant to engage in any deceptive or unfair act or practice in the course of commerce. 815 ILCS 505/2; Totz v. Continental Du Page Acura, 236 Ill. App. 3d 891, 900 (2d Dist. 1992). The ICFA provides consumers with broader protection than the common law and makes it easier for the victims of unfair or deceptive conduct to recover. Id. at 901. The ICFA is to be “liberally construed” which “provides a clear mandate to Illinois courts to utilize the [ICFA] to the greatest extent possible to eliminate all forms of deceptive or unfair business practices and provide appropriate relief to consumers.” Id. To achieve its purpose, the ICFA removes many of the barriers to recovery by reducing the elements of a prima facie case and lowering the standard of proof. Buechin v. Ogden Chrysler-Plymouth, Inc., 159 Ill. App. 3d 237, 250 (2d Dist. 1987) (“The majority of the traditional common law elements have been virtually eliminated by the [Act].”).
The ICFA eliminates age old adage of caveat emptor or let the buyer beware. It removes the common law fraud elements of scienter (that a defendant knew that its alleged misstatements were false) and reliance (that the consumer relied on the misstatements in purchasing the deceptively advertised or represented products or services.) Accordingly, even innocent misrepresentations or misstatements by a seller to a consumer violate the Act and entitle a consumer to recover. In addition to removing hurdles poised by ordinary fraud claims, the consumer fraud act also creates a duty on sellers forbidding them from knowingly hiding the truth such as that a car is in fact a rebuilt wreck. The IFCA creates a duty not present in the common law to disclose all known defects to a consumer. Miller v. William Chevrolet/GEO, Inc., 326 Ill. App. 3d 642, 658 (1st Dist. 2001) (“The Act generally does require that sellers engaged in trade or commerce disclose any material facts to consumers, regardless of the existence of a common law duty.”); Totz, 236 Ill. App. 3d at 903. Under the ICFA, “a used car dealer that conceals, suppresses, or fails to disclose a material fact to a consumer violates section 2 of the Act if the dealer intended the consumer to rely upon the concealment, suppression, or omission.” Id. A consumer establishes that the seller intended the buyer to rely on the representation by showing that knowing the truth would make a buyer less likely to purchase.
The elements of a claim under ICFA are: (1) deceptive conduct; (2) that the defendant intended the plaintiff rely on that conduct; (3) that the deception occurred in the course of conduct involving a trade or commerce; and (4) damages proximately resulting from the deception. Capiccioni v. Brennan Naperville, Inc., 339 Ill. App. 3d 927, 933 (2d Dist. 2003).
The public policy of the ICFA can be summed up as a statutory thumb on the scale in favor of consumers. The Act is a reflection of the legislature’s belief that consumers should not be forced to bear the expense of a seller’s misrepresentation—even if the misstatement was innocent and not intended to deceive. In addition to providing broad rights and protections, the legislature also provided for the recovery of costs, punitive damages, and attorneys’ fees for a successful plaintiff. 815 ILCS 505/10a(c). The provision for attorneys’ fees ensures that consumers with small damages are able to find counsel to enforce their rights and realize the protections of the Act. Totz, 236 Ill. App. 3d at 910.
When a seller of a product, such as an automobile, denies knowledge of a defect, such knowledge is established where “a cursory inspection would have revealed [the defect] to one experienced in the automobile business. . .” Id. at 904 (rejecting defendant’s testimony that he did not know that vehicle had been in an accident where plaintiff’s expert testified that it would have been obvious to anyone experienced in the industry). “The diminished value of a product is a compensable injury in a consumer fraud cause of action.” Hanson-Suminski v. Rohrman Midwest Motors, Inc., 386 Ill. App. 3d 585, 595 (1st Dist. 2008).
A seller cannot insulate itself from liability for its misrepresentations to a buyer by disavowing those promises with an “As Is” or another disclaimer in a contract. The ICFA has a provision preventing such a perversion of the rights it grants precluding waiver of its protections. This rule has always been recognized by the common law as well. See Eisenberg v. Goldstein, 29 Ill. 2d 617, 621 (1963) (“One who by misrepresentation has induced another to act to his prejudice cannot relieve himself of liability by a mere disclaimer thereof in advance. . .”); see also Napcor Corp. v. JP Morgan Chase Bank, NA, 406 Ill. App. 3d 146, 149, 152-53 (2d Dist. 2010) (rejecting defendant’s argument that clause in parties’ contract stating that “[plaintiff] is accepting the real estate in its ‘AS IS’ Condition. [Plaintiff] agrees and admits that no representations or statements have at any time been made by [defendant] or its agents as to the physical condition or state of repair or the environmental condition of said real estate in any respect, which have not been expressed in this contract” barred fraud claim based on representations made prior to entering the contract because “a purchaser of real property is entitled to rely on the truthfulness and accuracy of the statements contained in a disclosure report and that an ‘as is’ clause cannot be a defense to a fraudulent misrepresentation”). To allow a seller to engage fraudulent or deceitful conduct to make a sale and then use the resulting contract to “defeat a buyer’s subsequent claim would only encourage the evils the legislature sought to remedy.” Curtis Inv. Firm, Ltd. P'ship v. Schuch, 321 Ill. App. 3d 197, 200-01 (2d Dist. 2001).
If you are a victim of a consumer fraud, including auto-fraud, vitamin supplement fraud, medical or healthcare product fraud, or food labeling fraud, contact one of our Chicago consumer fraud attorneys. If you are a business that is facing a fraud claim brought by the Illinois Attorney General or by a disgruntled customer and are seeking aggressive and knowledgeable Chicago consumer fraud defense attorneys contact us. With offices in Chicago, Elmhurst and Wilmette, Illinois, we have litigated class action and individual consumer fraud suits throughout the Chicago area and across the country having litigated some landmark consumer fraud class actions. To set up a free consultation with one of our skilled Chicago consumer rights attorneys or Chicago consumer fraud defense attorneys, you can contact us online or call us on our toll-free number at 833-306-4933 or call us locally at 630-333-0333.