Illinois Law
Illinois Consumer Protection Law
- Consumer Protection Law
Consumer Protection Law
Automobile Buyer Protection
Illinois Lemon Law
Illinois's New Vehicle Buyer Protection Act, commonly known as the Illinois Lemon Law, protects consumers who buy or lease new cars, pickup trucks, and vans in Illinois. The law contains no warranties of its own. Instead, it puts teeth into the warranties manufacturers and dealers provide by giving consumers a remedy if a dealer or manufacturer fails to honor its written warranties. Illinois has a similar law that enforces express written warranties for the purchase of new farm implements.
Automobiles Covered
The Illinois Lemon Law covers new cars, pickup trucks, vans under 8,000 pounds and recreational vehicles purchased in Illinois. A new vehicle is also covered if it is leased for at least four months. The vehicles must be used at least 40 percent of the time for personal, family, or household use.
Coverage
The law applies to any written express warranty on the vehicle for one year or 12,000 miles driven, whichever is shorter. If the warranty has already expired, the Lemon Law does not apply. The manufacturer or dealer must repair a vehicle in accordance with the warranty if the defect or problem is covered by the warranty and the owner reports it within the warranty period or 12 months after delivery of the vehicle, whichever comes first. As long as the problem is reported within the warranty period, the manufacturer or dealer must make repairs, even if the warranty subsequently runs out.The law has special provisions for vehicles with serious problems -- the real lemons. If the dealer or manufacturer is unable to repair a vehicle's problem after a reasonable number of attempts, the buyer or person leasing the vehicle has a right to go to the manufacturer's arbitration program or to court and seek a replacement vehicle or a full refund of the purchase or lease price. What constitutes a reasonable number of attempts depends on the problem. A reasonable number is four or more unsuccessful attempts to correct the same problem, more than one unsuccessful attempt to correct a problem that causes a complete failure of the steering or braking system if the defect is likely to cause death or serious bodily harm, or any warranty repairs that cause the vehicle to be out of service for repairs for 30 or more business days.
Exceptions to Coverage
The Illinois Lemon Law does not apply to problems that do not substantially impair either the use or market value of the car. The law does not cover problems resulting from abuse, neglect, or unauthorized alterations to the car.
Illinois Used Car Warranty Law
Illinois also has a warranty law that covers the power train on new or used vehicles. The power train includes the engine block, engine head, internal engine parts, oil pan, gaskets, water pump, intake manifold, transmission and internal transmission parts, torque converter drive shaft, U-joints, rear axle and its internal parts and rear wheel bearings. Unless repairs are required as a result of abuse, negligence or collision, a retail automobile dealer in Illinois is liable for a portion of the cost of repairs on power train components for 30 days from the date of delivery. For cars up to two years old, the dealer is liable for 50 percent of the cost of repairs, cars over two years old but fewer than three years old carry a 25 percent liability to the dealer and cars between three and four years old require 10 percent coverage by the dealer. Cars older than four years are not covered.
Federal Used Car Rule
There is a Federal Used Motor Vehicle Trade Regulation Rule that requires a dealer to (1) properly represent the condition of a used vehicle; and (2) properly represent the terms of any warranty offered, if any. Any vehicle offered for sale by a dealer must be clearly marked "AS IS -- NO WARRANTY," if no warranty will be offered. The dealer must also disclose the history of the vehicle if that history would affect the buyer's decision to purchase.
Warranty Providers
The warranty described above applies only if the consumer buys from a used car dealer. Anyone in the business of selling used cars who sells more than five used cars a year is considered a dealer and is required to get a license from the state. A person who sells more than five used cars a year but does not get a license from the state is still considered a dealer even though unlicensed.
Telephone and Mail Fraud
Telemarketing Fraud
It is wise to be skeptical about offers made over the telephone, because the telephone can be used for a variety of scams. Often, telemarketing scams are versions of other scams described in this section. Illinois limits the lawful hours for telephone solicitation to 8:00 a.m. to 9:00 p.m. Legitimate businesses using the telephone to reach customers should be willing to take the time to explain the product or service and to send information in the mail if a consumer is truly interested in an offer. Sure signs that an offer is not legitimate include pressuring a consumer to act quickly, offering to send someone to the consumer's home to pick up a check or cash immediately, insisting on a credit card number or checking account number, and offering prizes only after the consumer buys a product from the company.
The Illinois Attorney General gives this advice to consumers to protect themselves against telemarketing fraud: (1) don't buy from unfamiliar companies; (2) always take your time making a decision; (3) never send money or give out your credit card or bank account number to unfamiliar companies; (4) always be suspicious of companies that ask you to send payment by courier or overnight delivery; and (5) contact the Illinois Secretary of State Division of Securities to see if an investment company is registered by calling (217) 782-2256.
Credit Card Scams
Credit cards are popular with shoppers because they provide a convenient, easy way to make purchases without carrying money. Unfortunately, credit card holders are also an easy target for fraud. Anyone who obtains a credit card number can instantly use that number to defraud its owner and the credit card issuer, so it is wise to guard one's credit card numbers at all times. A common method used by crooks to get credit card numbers is to convince innocent cardholders to give the numbers over the telephone. To combat telephone credit card fraud, a person should never give out a credit card number over the telephone unless he or she initiates the call and is purchasing something.
A very common credit card scam is for con artists to phone a home telling the person who answers that he or she has won a prize and need only provide a credit card number to verify his or her identity. Another common scam is for a con artist to phone a consumer and claim to be an employee of a credit card company seeking cooperation from the cardholder to catch a con artist. In this scam, the caller claims to be investigating credit card scams and asks for the victim's credit card number in order to set a trap to catch the con artist. Of course, no credit card company actually does this, and no one should ever give his or her credit card number to anyone using this scam.
Illinois law gives consumers specific rights regarding requests for identification when paying by check. A seller may ask to see a credit card for verification, however, the seller may only record the type of card and its expiration date. Regarding the credit card number in connection with any payment by check or draft is illegal and can carry a fine of up to $500 per occurrence.
Prize Mailings
Every year, thousands of Illinois residents receive letters telling them they have won a prize in a contest. These letters often sound too good to be true and probably are. The letters usually seem quite believable, because they are printed on good stationery, sound very convincing, and are sent by organizations with official-sounding names. What the victim does not realize is that, in order to claim a prize, he or she must pay inflated delivery costs or processing fees, give out a credit card number, or make an expensive long-distance telephone call. Often the prizes are either nonexistent or of very little value. A legitimate prize has no strings attached and is otherwise accompanied by all material terms and conditions of the offer. Illinois has an Unsolicited Merchandise Act, which gives the recipient of a prize an absolute right to refuse delivery and no obligation to return unsolicited goods to the sender.
Home Solicitations
Door-To-Door Sales
The intent behind many door-to-door cons is to pressure the consumer into an impulse purchase. Anyone trying to con a consumer does not want the consumer to think about an offer or to compare prices. Most door-to-door salespeople can be politely refused. No one should feel obligated to let a stranger into their home simply because the stranger appears at the door claiming to be selling a product. If someone wants to do business with a door-to-door salesperson, it is best to get all the terms of the deal and any guarantees in writing.
Insurance Fraud
Every year, the State of Illinois receives many complaints about fraudulent insurance agents who visit their victims' homes. To sell insurance legally, a person must have a license from the state and an appointment from a legitimate insurance company. Some of the worst scams occur when a person who was formerly a licensed and appointed agent attempts to swindle consumers and then disappears before the fraud is discovered. These frauds are convincing because the seller has legitimate experience selling insurance policies legally. When such persons decide to operate outside the law, they seem virtually indistinguishable from legitimate agents.
Anyone suspecting that they may not be dealing with a legitimate insurance agent should check with both the state and the insurance company about the agent's status. In Illinois, questions about insurance fraud should be directed to the Illinois Office of the Attorney General.
Three-Day Cooling Off Law
In response to the fraud so commonly associated with home solicitations, Illinois has passed laws that protect consumers from home solicitation and other fraud including campground memberships. The most important of these protection laws is commonly called the three-day cooling off law. This law covers anyone offering consumer goods or services away from their traditional place of doing business. This includes traditional door-to-door solicitations and other sales made at temporary locations, such as county fairs or in hotel or motel rooms. Phone solicitations and person-to-person solicitations may also be covered. A sales person covered by this law is required to tell the consumer, before saying anything else, his or her name, the name of the company represented, and the product or service he or she is selling. It is against the law to misrepresent one's identity as a salesperson. A salesperson cannot misrepresent the true purpose of the deal or the true identity of the company and cannot misrepresent the true cost of the good or service by failing to mention additional hidden but required costs. The seller is required to provide a copy of any contract the consumer signs and must give notice of the buyer's right to cancel the contract (if for more than $25) within three business days. To cancel the contract, the buyer must give written notice to the seller within three days. Written notice of cancellation is best sent by certified mail with return receipt requested so that the consumer has proof that the cancellation was sent and received. The three-day cooling off law does not apply to real estate, insurance, or securities or commodities by a registered broker-dealer.
Get-Rich-Quick Schemes
Work-at-Home Scams
Illinois residents are frequently the victims of work-at-home schemes that promise to pay a lot of money in return for easy, no-experience-required work that can be done at home, such as light assembly or addressing labels. Senior citizens and the disabled are especially vulnerable to such scams because the scams appear to offer a way to supplement one's income without leaving home. Many work-at-home schemes are frauds requiring the victims to purchase expensive materials from the company with no guarantee that the finished product will be purchased. Often they are pyramid schemes as described below. Anyone interested in work at home should first contact the Illinois Office of the Attorney General or the Better Business Bureau.
Pyramid Schemes
A pyramid scheme is an illegal plan in which a large number of people at the bottom of a pyramid pay money to relatively few people at the top. New participants are recruited with the promise that, if they pay now, they can move up the pyramid and profit from later recruits. Pyramid schemes are illegal and deceptive because they are mathematically doomed to failure. No matter how long the scheme continues, eventually the majority of participants are cheated. Most people are smart enough to stay away from pure pyramid schemes that ask new recruits to pay money to be included in a pyramid. To hide the true nature of the rip-off, pyramid creators often hide a pyramid scheme behind what looks like a legitimate business. Rather than simply ask a new recruit to pay money to join a pyramid, a recruiter might claim to be selling a product to the new recruit. In exchange for paying an inflated price for a product, the new recruit is given the chance to become a dealer or distributor of the product. In this way, the new recruit winds up paying money to the people at the top of the pyramid and recruiting others for the lower level of the pyramid. The distinguishing feature of these scams is that those at the top of the pyramid make more money from their own distributors than from the sale of products. The emphasis in such organizations is on maintaining a steady stream of new dealers and distributors rather than actually marketing a product.
Specific Businesses
Hearing Aid Sales
Illinois has laws specifically designed to protect consumers of hearing aids against fraud. Anyone selling hearing aids must hold a permit from the Illinois Department of Health. Prohibited practices include engaging in conduct likely to deceive or defraud, fee-splitting, abusive or fraudulent selling procedures, and high-pressure sales tactics. Buyers must have a recommendation or a prescription to purchase a hearing aid. The seller of mail order hearing aids in Illinois must provide a 45-day money-back guarantee that permits the buyer to cancel the sale for any reason during that time. Anyone repairing a hearing aid must provide the consumer with an itemized bill. Penalties for violating hearing aid sales laws include criminal prosecution and civil penalties.
Funerals, Burial, and Cremation
Illinois residents spend millions of dollars on funeral services each year, making the funeral business a very big industry. Yet for all the money spent each year on funeral goods and services, the average consumer knows very little about the goods and services offered or the laws regulating their sale. It is wise to shop around for burial and funeral services just like any other consumer purchase. Most funeral directors in Illinois are hard-working professionals who strive to provide a needed service to their customers for a fair price. Unfortunately, the industry has attracted a few unscrupulous people who take advantage of people at a time when they are particularly vulnerable.
The Federal Trade Commission's Funeral Practices Trade Regulation Rule, as well as a number of Illinois state regulations, regulate this industry. These laws are designed to prevent fraud by making members of the general public better educated consumers of funeral goods and services. The federal rule is complicated, but there are some important points to know. Funeral directors must make their prices available over the phone and a general price list available at the start of any discussions with a consumer. At the conclusion of discussions, a funeral director must provide an itemized statement reflecting the goods and services chosen by the consumer.
Unless required by law, a funeral director must first obtain permission before embalming. A funeral director may not require a casket before a cremation, although a simple container is required. The federal rule forbids a funeral director from representing that state or local laws require embalming or a casket for cremation when they do not. It is an unfair or deceptive act for a provider of funeral goods and services to fail to furnish price information on each of the specific goods or services offered. Written complaints can be made to the Comptroller's Office, State of Illinois, Director of Cemetery Care and Trust, State of Illinois Center, #15-500, 100 Randolph Street West, Chicago, IL 60601 (phone: (312) 814-5921).
Debt Collection Agencies
State and federal laws limit the kinds of activities that a collection agency can engage in as it tries to collect a debt. These laws only apply to third-party collection agencies and not to in-house collections. That is, if the XYZ Dress Shop tries on its own to induce its delinquent customers to pay overdue bills, it is not required to obey the laws governing collection agencies. But if XYZ's owner turns collection matters over to ABC Collection Agency, ABC's employees must follow the rules outlined below.
Collection agencies are usually paid on commission and only make money if they collect from debtors. Collection agencies typically keep between 30 and 50 percent of what they collect. There is a powerful incentive to be very aggressive in trying to induce someone to pay an overdue bill. Debt collection laws are designed to ensure that an agency's natural aggressiveness does not cross over the line into harassment or manipulation.
Anyone weary of a collection agency's efforts can stop future contact by writing the agency a letter stating that he or she no longer wishes to be contacted about the debt. The agency must stop contacting the debtor, except to tell the debtor that it is stopping its collection efforts or that it will sue to collect the debt. A major drawback to taking this route is that it might cause the agency to initiate legal action, in which case the debtor may have to pay court fees and attorney fees in order to defend himself or herself. If a debtor disputes the amount of money owed, he or she can write the collection agency requesting that it provide proof of the debt. The agency must then verify the debt before it can resume efforts to collect the debt.
Debt collectors must be discreet when contacting a debtor about a debt. They may not call a debtor at work unless the debtor is at least 30 days in default and the debt collector provides at least five days prior written notice of the intent to call the debtor's place of employment. If a collector calls someone at work, the collector cannot tell a boss or leave a message with a secretary that he or she is trying to collect a debt. Finally, debt collectors cannot harass a debtor, for example, they cannot call in the middle of the night, use vulgar language, or threaten physical harm to someone.
Most collection agencies know these laws and obey them because the penalties for not doing so are rather severe. Anyone with good evidence that a collection agency has violated any of these laws can sue the agency. If the debtor wins, the court can make the collection agency pay the debtor the money lost as a result of the agency's illegal actions. In addition, the court can punish the agency by making it pay up to $1,000. The court may even make the agency reimburse the debtor for the money spent to hire an attorney.
Consumer Reporting Agencies
Many consumer reporting agencies collect and disseminate information on an individual's credit history, arrest record, and whether the person has ever filed for bankruptcy. The most common type of consumer report is the credit report. Consumer reports can be used by creditors, insurers, and employers in deciding whether to extend credit, underwrite insurance policies, or to employ a job applicant. Illinois laws and the Federal Fair Credit Reporting Act give consumers rights in dealing with consumer reporting agencies. The laws are designed to curb abuses in credit reporting and enable individuals to have mistakes in their credit reports corrected. The federal law is more extensive than the state law and provides greater protection for the consumer. The federal law limits who can receive copies of reports, limits what reports can be used for, and provides federal civil penalties for non-compliance.
Under the federal law, if a consumer application for credit is denied, the creditor must tell the applicant if the application was denied because of information contained in a credit report. The creditor is required to tell the consumer which reporting agency issued the report. In many situations, the consumer can get a copy of the information in his or her report and the sources of that information. If employment, credit, or insurance is denied on the basis of information contained in a consumer report, the consumer has a right to receive a copy of the report free of charge. The consumer is given an opportunity to dispute items contained in a consumer report.
Under the state law, the consumer has a right to request a copy of his or her report once every 12 months. The consumer can be required to pay for reasonable copying charges, not to exceed eight dollars, and has a right to dispute items in the report. The primary benefit of the state law is that it gives consumers a state cause of action for non-compliance.
Home Repair Fraud Act
The Illinois Home Repair Fraud Act protects consumers against misrepresentations in home repair contracts, false pretenses to induce home repair contracts, unreasonable prices charged for the value of contracts over $4,000, misrepresentation of the person or business, and damages to property while performing under a home repair contract. Penalties for violating the Home Repair Fraud Act can be civil or criminal. Penalties are enhanced when made against persons over 60 years old.
Pay-Per-Call Services Consumer Protection Act
With the increase in the number of pay-per-call telephone services, the Illinois legislature passed laws requiring certain disclosures in advertising pay-per-call numbers. All advertising of pay-per-call services in Illinois must include (1) the cost for each call or fee per minute; (2) any availability limitations; (3) disclosure that callers under 12 must request parental or guardian permission; (3) callers under 12 must be allowed 12 seconds to hang up with no charge; (4) introduction for the call must inform the consumer of the permission requirement for minors, a description of the service, an accurate summation of costs for the call and a notice that billing will begin after three seconds following the introductory announcement. Some calls are exempt from the introduction requirement. Violations of the Pay-Per-Call Services Consumer Protection Act should be reported to the Office of the Attorney General for the State of Illinois.
Resources
Board of Governors of the Federal Reserve System, Washington, D.C. 20551. For information or to order Consumer Handbook to Credit Protection Laws
The Office of the Attorney General, Consumer Fraud Bureau, 500 Second Street South, Springfield, IL 62706, phone: (218) 782-9011, TDD: ( 217) 785-2771 or 100 Randolph Street West, Chicago, IL 60601, phone: (321) 814-3000, TDD: (312) 814-3374, toll free: 1-800-252-8666. For information or to order free brochures.