1. Basic Consumer Law Training October 1, 2008 Catherine A. Schneider Supervising Attorney CARPLScschneider@carpls.org

2. Fair Debt Collection Practices Act FDCPA 15 U.S.C sects 1692-1692p. Who is Covered Who is Covered What is Covered What is Covered What is Prohibited What is Prohibited Debt Collectors “Musts” Debt Collectors “Musts” Civil Liability for Non-Compliance Civil Liability for Non-Compliance

3. What kind of debt is the consumer facing: Credit Cards Credit Cards Autos Autos Payday Loans Payday Loans Student Loans Student Loans Medical Bills Medical Bills Home Repairs Home Repairs

4. Credit Cards Breach of written contract claim; Breach of written contract claim; Muni cases, Law cases, Small claims (IL SCR 281) in Cook County – when answer or other pleading required; Muni cases, Law cases, Small claims (IL SCR 281) in Cook County – when answer or other pleading required; Summons – P.S., Sub- Service, Small claim certified mail service IL SCR 284; Summons – P.S., Sub- Service, Small claim certified mail service IL SCR 284; Return date v. Trial date; Return date v. Trial date; Default – Vacating a technical default; Vacating a default: 735 ILCS 5/2-1301 / 735 ILCS 5/2-1401 Default – Vacating a technical default; Vacating a default: 735 ILCS 5/2-1301 / 735 ILCS 5/2-1401

5. Credit Cards Defenses Statute of Limitations – 10 years, but see Parkis v. Arrow Financial Services, LLS, 2008 WL 94798 (N.D. Ill) Statute of Limitations – 10 years, but see Parkis v. Arrow Financial Services, LLS, 2008 WL 94798 (N.D. Ill) Debt has been paid Debt has been paid Not Consumer’s Debt Not Consumer’s Debt No contract 735 ILCS 5/2-606 No contract 735 ILCS 5/2-606 No assignment 735 ILCS 5/2-403 No assignment 735 ILCS 5/2-403Counterclaims Violations of FDCPA Violations of FDCPA

6. Credit Cards Settlement – lump sum / installment payments Settlement – lump sum / installment payments Trial – 30 days – motion to reconsider: new evidence, new law or error in application of existing law (735 ILCS 5/2-1203) Trial – 30 days – motion to reconsider: new evidence, new law or error in application of existing law (735 ILCS 5/2-1203) Appeal – 30 days Appeal – 30 days

7. Credit Cards Two other notes Two other notes Consumer Credit Protection Act – Credit Billing (15 USC 1666) – when a consumer buys goods or services using a credit card, she can assert against the credit card issuer and defenses and non-tort claims eh or she has against the merchant under certain circumstances; Consumer Credit Protection Act – Credit Billing (15 USC 1666) – when a consumer buys goods or services using a credit card, she can assert against the credit card issuer and defenses and non-tort claims eh or she has against the merchant under certain circumstances; Under the Fair Credit Billing Act, consumers are only liable for $50.00 in unauthorized charges on their credit card account. Under the Fair Credit Billing Act, consumers are only liable for $50.00 in unauthorized charges on their credit card account.

8. Autos Buyer’s Remorse Buyer’s Remorse Financing Problems Financing Problems Material Misrepresentations Material Misrepresentations Service Contracts Service Contracts Mechanical Problems / Warranties Mechanical Problems / Warranties Leased Vehicles Leased Vehicles Co-Signors / Guarantors Co-Signors / Guarantors Can’t Afford Payments Can’t Afford Payments Re-Possessions Re-Possessions

9. Autos Buyer’s Remorse Contract Controls Contract Controls No “3 day return period” No “3 day return period” Options Options Obligations Obligations

10. Autos Financing Problems Financing falls through – 815 ILCS 505/2C (IL Consumer Fraud and Deceptive Practice Act) – get “stuff” back Financing falls through – 815 ILCS 505/2C (IL Consumer Fraud and Deceptive Practice Act) – get “stuff” back Signing a new financing contract – possible fraud Signing a new financing contract – possible fraud If credit is rejected If credit is rejected If dealer refuses to give “stuff” back – attorney’s fees If dealer refuses to give “stuff” back – attorney’s fees

11. Autos Material Misrepresentations False advertising False advertising Sales person’s representations Sales person’s representations 815 ILCS 505/1 - damages 815 ILCS 505/1 - damages

12. Autos Service Contracts What are they What are they Scams Scams

13. Autos Mechanical Problems / Warranties New Cars Contract governs Contract governs Follow use guidelines Follow use guidelines Required formal dispute resolution Required formal dispute resolution Demand letter Demand letter Contact Consumer Protection agencies Contact Consumer Protection agencies Suit – Magnuson Moss Warranty Act Suit – Magnuson Moss Warranty Act Lemon Laws Lemon Laws

14. Autos Mechanical Problems / Warranties Used Cars Power Train Components – Consumer Fraud Act Power Train Components – Consumer Fraud Act FTC Used Car Rule FTC Used Car Rule Warranties and “as is” sales Warranties and “as is” sales If there is a written warranty – same as New Cars If there is a written warranty – same as New Cars No Lemon Law No Lemon Law

15. Autos Leased Vehicles Consumer Leasing Act, 15 U.S.C. Sec. 1640 et seq Consumer Leasing Act, 15 U.S.C. Sec. 1640 et seq Default and possible repossession Default and possible repossession Early Termination Early Termination Sales Tax Sales Tax Mileage Limits Mileage Limits Interest, down payments and insurance Interest, down payments and insurance Wrecked or Stolen Car Wrecked or Stolen Car Expiring Lease Expiring Lease

16. Auto Co-signors / Guarantors Factors releasing Co-Signors from responsibility Factors releasing Co-Signors from responsibility Co-signor on title Co-signor on title Guarantor's Obligation Guarantor's Obligation

17. Autos Can’t afford payments Is the debt secured? Likely Is the debt secured? Likely Negotiate a work-out plan Negotiate a work-out plan Sell the Car Sell the Car Return the Car Return the Car Bankruptcy Bankruptcy

18. Autos Repossession / Deficiency Suit Is there a valid security interest Is there a valid security interest Is there really a default – dealer’s practice of accepting payments Is there really a default – dealer’s practice of accepting payments Breach of Peace 810 ILCS 5/9-503 Breach of Peace 810 ILCS 5/9-503 Is 30% of the purchase price paid Is 30% of the purchase price paid Reselling the Car – 2 notices Reselling the Car – 2 notices Commercially Reasonable Sale Commercially Reasonable Sale Statute of Limitattions – 4 years Statute of Limitattions – 4 years

19. Payday Loans Payday Loan Reform Act (PRLA), 815 ILCS 122/1 et seq

20. Student Loans When does repayment start When does repayment start 5 repayment plans 5 repayment plans Default Default Bankruptcy? Bankruptcy?

21. Medical Bills Implied agreement Implied agreement Reasonable value Reasonable value Over charges Over charges Insurance Insurance

22. Home Repairs Mechanics Lien What Is It What Is It Requirements Requirements Perfection Perfection Then What Then What

23. Credit Reporting / Credit Access Credit Scores Credit Scores Credit Reports Credit Reports Improving Credit Scores Improving Credit Scores Identity Theft Identity Theft

24. Is the consumer dealing with multiple debts? Perhaps Bankruptcy is going to be the answer. Chapter 7 Chapter 13

25. Is the consumer collection/judgment proof EXEMPT ASSETS Necessary Clothing Necessary Clothing Soc. Security Soc. Security Unemployment Unemployment Public Assistance Public Assistance Veteran’s Benefits Veteran’s Benefits Private pensions Private pensions Alimony Alimony Child Support Child Support Take home pay up to $348.75 per week Take home pay up to $348.75 per week $15,000.00 of home equity $15,000.00 of home equity A car worth $2400 or less A car worth $2400 or less Tools of trade worth $1500 or less Tools of trade worth $1500 or less Up to $4000 of any “other property Up to $4000 of any “other property