Basic Consumer LawBasic Consumer LawTrainingTraining

October 1, 2008October 1, 2008

Catherine A. SchneiderCatherine A. Schneider

Supervising AttorneySupervising Attorney

CARPLSCARPLS

cschneider@carpls.orgcschneider@carpls.org

Fair Debt Collection Practices ActFair Debt Collection Practices Act FDCPA 15 U.S.C sects 1692-1692p.FDCPA 15 U.S.C sects 1692-1692p.

Who is CoveredWho is Covered What is CoveredWhat is Covered What is ProhibitedWhat is Prohibited Debt Collectors “Musts”Debt Collectors “Musts” Civil Liability for Non-ComplianceCivil Liability for Non-Compliance

What kind of debt is the What kind of debt is the consumer facing:consumer facing:

Credit CardsCredit Cards AutosAutos Payday LoansPayday Loans

Student Loans Student Loans Medical BillsMedical Bills Home RepairsHome Repairs

Credit CardsCredit Cards

Breach of written contract claim;Breach of written contract claim; Muni cases, Law cases, Small claims (IL Muni cases, Law cases, Small claims (IL

SCR 281) in Cook County – when answer or SCR 281) in Cook County – when answer or other pleading required;other pleading required;

Summons – P.S., Sub- Service, Small claim Summons – P.S., Sub- Service, Small claim certified mail service IL SCR 284; certified mail service IL SCR 284;

Return date v. Trial date;Return date v. Trial date; Default – Vacating a technical default; Default – Vacating a technical default;

Vacating a default: 735 ILCS 5/2-1301 / Vacating a default: 735 ILCS 5/2-1301 / 735 ILCS 5/2-1401735 ILCS 5/2-1401

Credit CardsCredit Cards

Defenses Defenses Statute of Limitations Statute of Limitations

– 10 years, but see – 10 years, but see Parkis v. Arrow Parkis v. Arrow Financial Services, Financial Services, LLSLLS, 2008 WL 94798 , 2008 WL 94798 (N.D. Ill) (N.D. Ill)

Debt has been paidDebt has been paid Not Consumer’s DebtNot Consumer’s Debt No contract 735 ILCS No contract 735 ILCS

5/2-6065/2-606 No assignment 735 No assignment 735

ILCS 5/2-403ILCS 5/2-403

CounterclaimsCounterclaims Violations of FDCPAViolations of FDCPA

Credit CardsCredit Cards

Settlement – lump sum / installment Settlement – lump sum / installment paymentspayments

Trial – 30 days – motion to Trial – 30 days – motion to reconsider: new evidence, new law or reconsider: new evidence, new law or error in application of existing law error in application of existing law (735 ILCS 5/2-1203)(735 ILCS 5/2-1203)

Appeal – 30 daysAppeal – 30 days

Credit CardsCredit Cards Two other notesTwo other notes Consumer Credit Protection Act – Credit Consumer Credit Protection Act – Credit

Billing (15 USC 1666) – when a consumer Billing (15 USC 1666) – when a consumer buys goods or services using a credit card, buys goods or services using a credit card, she can assert against the credit card she can assert against the credit card issuer and defenses and non-tort claims eh issuer and defenses and non-tort claims eh or she has against the merchant under or she has against the merchant under certain circumstances;certain circumstances;

Under the Fair Credit Billing Act, Under the Fair Credit Billing Act, consumers are only liable for $50.00 in consumers are only liable for $50.00 in unauthorized charges on their credit card unauthorized charges on their credit card account. account.

AutosAutos

Buyer’s RemorseBuyer’s Remorse Financing ProblemsFinancing Problems Material Material

MisrepresentationsMisrepresentations Service ContractsService Contracts Mechanical Mechanical

Problems / Problems / WarrantiesWarranties

Leased VehiclesLeased Vehicles Co-Signors / Co-Signors /

Guarantors Guarantors Can’t Afford Can’t Afford

PaymentsPayments Re-PossessionsRe-Possessions

AutosAutos

Buyer’s RemorseBuyer’s Remorse Contract ControlsContract Controls No “3 day return period”No “3 day return period” OptionsOptions ObligationsObligations

AutosAutos

Financing ProblemsFinancing Problems Financing falls through – 815 ILCS 505/2C Financing falls through – 815 ILCS 505/2C

(IL Consumer Fraud and Deceptive (IL Consumer Fraud and Deceptive Practice Act) – get “stuff” backPractice Act) – get “stuff” back

Signing a new financing contract – possible Signing a new financing contract – possible fraudfraud

If credit is rejectedIf credit is rejected If dealer refuses to give “stuff” back – If dealer refuses to give “stuff” back –

attorney’s feesattorney’s fees

AutosAutos

Material MisrepresentationsMaterial Misrepresentations False advertisingFalse advertising Sales person’s representationsSales person’s representations 815 ILCS 505/1 - damages815 ILCS 505/1 - damages

AutosAutos

Service ContractsService Contracts What are theyWhat are they ScamsScams

AutosAutosMechanical Problems / WarrantiesMechanical Problems / Warranties

New CarsNew Cars Contract governsContract governs Follow use guidelinesFollow use guidelines Required formal dispute resolutionRequired formal dispute resolution Demand letterDemand letter Contact Consumer Protection agenciesContact Consumer Protection agencies Suit – Magnuson Moss Warranty ActSuit – Magnuson Moss Warranty Act Lemon LawsLemon Laws

AutosAutosMechanical Problems / WarrantiesMechanical Problems / Warranties

Used CarsUsed Cars Power Train Components – Consumer Power Train Components – Consumer

Fraud ActFraud Act FTC Used Car RuleFTC Used Car Rule Warranties and “as is” salesWarranties and “as is” sales If there is a written warranty – same as If there is a written warranty – same as

New CarsNew Cars No Lemon LawNo Lemon Law

AutosAutosLeased VehiclesLeased Vehicles

Consumer Leasing Consumer Leasing Act, 15 U.S.C. Sec. Act, 15 U.S.C. Sec. 1640 et seq1640 et seq

Default and Default and possible possible repossessionrepossession

Early TerminationEarly Termination Sales TaxSales Tax Mileage LimitsMileage Limits

Interest, down Interest, down payments and payments and insuranceinsurance

Wrecked or Stolen Wrecked or Stolen CarCar

Expiring LeaseExpiring Lease

AutoAutoCo-signors / GuarantorsCo-signors / Guarantors

Factors releasing Co-Signors from Factors releasing Co-Signors from responsibilityresponsibility

Co-signor on titleCo-signor on title Guarantor's ObligationGuarantor's Obligation

AutosAutos

Can’t afford paymentsCan’t afford payments Is the debt secured? LikelyIs the debt secured? Likely Negotiate a work-out planNegotiate a work-out plan Sell the CarSell the Car Return the CarReturn the Car BankruptcyBankruptcy

AutosAutosRepossession / Deficiency SuitRepossession / Deficiency Suit

Is there a valid Is there a valid security interestsecurity interest

Is there really a Is there really a default – dealer’s default – dealer’s practice of accepting practice of accepting paymentspayments

Breach of Peace 810 Breach of Peace 810 ILCS 5/9-503ILCS 5/9-503

Is 30% of the purchase Is 30% of the purchase price paidprice paid

Reselling the Car – 2 Reselling the Car – 2 noticesnotices

Commercially Commercially Reasonable SaleReasonable Sale

Statute of Limitattions Statute of Limitattions – 4 years– 4 years

Payday LoansPayday Loans

Payday Loan Reform Act Payday Loan Reform Act (PRLA), 815 ILCS 122/1 et (PRLA), 815 ILCS 122/1 et

seqseq

Student LoansStudent Loans When does repayment startWhen does repayment start 5 repayment plans5 repayment plans DefaultDefault Bankruptcy?Bankruptcy?

Medical BillsMedical Bills Implied agreementImplied agreement Reasonable valueReasonable value Over chargesOver charges InsuranceInsurance

Home RepairsHome Repairs

Mechanics LienMechanics Lien What Is ItWhat Is It RequirementsRequirements PerfectionPerfection Then WhatThen What

Credit Reporting / Credit Reporting / Credit AccessCredit Access

Credit ScoresCredit Scores Credit ReportsCredit Reports Improving Credit ScoresImproving Credit Scores Identity TheftIdentity Theft

Is the consumer dealing Is the consumer dealing with multiple debts? with multiple debts?

Perhaps Bankruptcy is Perhaps Bankruptcy is going to be the answer.going to be the answer.

Chapter 7Chapter 7

Chapter 13Chapter 13

Is the consumer Is the consumer collection/judgment proofcollection/judgment proof

EXEMPT ASSETSEXEMPT ASSETS Necessary ClothingNecessary Clothing Soc. SecuritySoc. Security UnemploymentUnemployment Public AssistancePublic Assistance Veteran’s BenefitsVeteran’s Benefits Private pensionsPrivate pensions AlimonyAlimony Child SupportChild Support

Take home pay up to Take home pay up to $348.75 per week$348.75 per week

$15,000.00 of home $15,000.00 of home equityequity

A car worth $2400 or A car worth $2400 or lessless

Tools of trade worth Tools of trade worth $1500 or less$1500 or less

Up to $4000 of any Up to $4000 of any “other property“other property