In an effort to protect Illinois consumers, the Illinois legislature passed the Illinois Consumer Fraud Act (the “Act”). The Act is intended to protect consumers against fraud, unfair methods of competition, and unfair or deceptive acts or practices in the conduct of trade or commerce. Specifically, the Act prohibits: “unfair methods of competition 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 . . . in the conduct of any trade or commerce.”
In applying the Act, Illinois courts have held that in order for a plaintiff to plead an adequate cause of action under the Act, he or she must allege: (1) a deceptive act or practice by the defendant, (2) the defendant’s intent that the plaintiff rely on the deception, (3) the occurrence of the deception in the course of conduct involving trade or commerce, (4) actual damage to the plaintiff, and (5) proximately caused by the deception. In addition, the courts have found that a claim under the Act must be pled with the same particularity and specificity required of a claim alleging common law fraud.
The majority of litigation based on the Act has been focused on the first prong of the test; specifically, whether the act complained of amounts to a deceptive act or practice warranting recovery. For example, in Avery v. State Farm Mutual Automobile Insurance Co., the Illinois Supreme Court found that a plaintiff must prove more than breach of a contractual promise, as a promise that was made and not fulfilled is not actionable under the Act. The Court found that an insurer’s failure to use the highest quality parts in replacing damaged vehicles did not constitute deception under the Act, even when the insurer had promised to use the highest quality replacement parts.
However, in Pappas v. Pella Corporation, the Plaintiffs’ allegations were found to be sufficient to state a valid cause of action under the Act. In Pappas, Plaintiffs alleged that Defendant knew it was installing defective windows, and deliberately withheld this information, resulting in injury to Plaintiffs. The Illinois Appellate Court found these allegations were sufficient to withstand a motion to dismiss. The Court ruled that allegations that the manufacturer knew of a defect in its product, failed to inform consumers of the defect, that consumers would not have purchased the product had they known of the defect, and that the defect resulted in damage were sufficient to state a cause of action under the Act, as these allegations were found to allege unfair or deceptive acts or practices. The Court explained that for a claim based on an omission under the Act, plaintiffs are required to allege an omission of a material fact in the conduct of trade or commerce, and do not need to allege that a product was unreasonably dangerous or defective.
If you have any questions concerning what constitutes an unfair practice, or whether you have a claim under the Act, please contact a member of the firm.