Deceptive practices and fraud are usually white collar offenses that are motivated by financial gains. They don’t usually involve violence. At the most severe level, deceptive practices are charges as Class 4 felonies.
Convictions usually result in order to compensate the financial damage suffered by the victim. Prison time is usually lower as long as the victims are compensated.State Legislation
Deception and fraud are covered under 720 ILCS 5/17. A person commits deceptive practice when he or she has the intent to defraud another person and does any of the following:
Knowingly causes another person, by threat or deception, to execute a document, which disposes the victim of a property or incurs a pecuniary obligation.
In a position as an officer, manager or any other role in a financial institute, he or she knowingly receives or allows the receipt of a deposit or investment, with the knowledge that the institute is insolvent.
Knowingly makes or directs someone else to make a deceptive statement for the public in order to promote the sale of property or services.
The law further states that a person commits deceptive practice
When they issue or deliver a check for payment of goods, services or tax obligations, with full knowledge that the check will not be honored by the depository because they do not have sufficient funds or credit.
When they issue a check to discharge a liability or credit with full knowledge that the check will not be honored by the depository.
The legislation further covers possession of stolen identity or fraudulent checks, threats of using force to obtain something from another person, deception on bank or insurer and false statements.Punishments
Possession of unlawful documents such as stolen identity or forged check is a Class A misdemeanor if the total value of damages is less than $150, and a Class 4 felony where the amount is more than $150.
Issuing false statements is also a Class A misdemeanor.
A Class 4 felony is punishable by 1–3 years and fines up to $25,000. A Class A misdemeanor is punishable by up to 1 year in prison.Considerations for Deceptive Practices
Deceptive practice and fraud cases can be quite complex to process. In many cases, a person charged with deceptive practices would have had no intention to deceive. However, lack of communication or misunderstanding on the part of one or more parties results in allegations of fraud and deception.
A court has the authority to annul contracts that are proved to have been signed by making false statements or misrepresentation of facts. The court may also order the defendant to indemnify the claimant for any damages caused by misrepresentation of facts.
Deceptive practices cover a wide range of activities and claimants can bring a lawsuit against companies and individuals for any perceived or real fraud.
For instance, a company may find being sued for not providing full disclosure about ingredients in its products, or changing existing customer policies. Businesses may even be sued for not providing every safety hazard associated with the use of their products.
In most cases, deceptive practice lawsuits are brought against a company or individual by another company or consumers, and not necessarily by the state. In these cases, the defendant is usually sued for one of three purposes:
- Compensate the claimant for monetary damages.
- Make changes to existing company policies.
- Annul a contract or obligation on the claimant.
In November 2017, the attorney’s office brought charges of fraud and deceptive practices against a home improvement business in Downers Grove. The office claimed that the business “American Dream Home Improvement” allegedly misled homeowners into paying for repairs that they did not know they were signing up for.
Following bad weather conditions and mild storms, the company’s sales reps visited hundreds of homes, offering to provide home inspections and repair services for free.
Soon after, the company’s workers arrived to conduct repairs that homeowners had never agreed to. The residents who chose to proceed with the repairs later contacted the attorney’s office to report incomplete or poorly done repairs. Homeowners also reported that the company tried to charge them more than their insurance cover on the claim.
The attorney’s office claimed that hundreds of homeowners were affected by the company, which provided forms that were misleading and contained contradictory information. The forms were also missing required disclosures such as work to be performed, material and equipment costs and service charges.
In February, a lawsuit was brought against L.L. Bean’s when the shoe retailer tried to change its previous return policies. The company previously had a lifetime warranty on its products for unlimited returns. The company issued a statement that they were going to change the policy and limit it to one-year due to a small but growing number of customers who were abusing the policy.
More than 100 customers represented in the lawsuit claimed that they felt deprived of a benefit that was priced into their products that they bought at the store. The lawsuit claimed that the customers made purchases at L.L. Bean based on company’s unconditional lifetime return policy. Having lost the benefit, the claimants sought either $5 million in damages or for the company to honor the original policy.
In a comment, L.L. Bean representative stated that the products bought at the store prior to the return policy changes would be subject to the old policy.Possible Legal Defenses
Deceptive practice charges can be brought on for a number of reasons, and defense would obviously depend on the nature of the charges.
The most common type of charge for deceptive practices is writing a check with insufficient money in a bank. In this case, the defendant may be able to claim that they were not aware of the balance in their account. A good defense team could argue that funds that were wired to the account were delayed or withdrawn by a third party.
In the case of a charge of false statement or misrepresentation of facts, the defense may argue that the defendant believed the statements to be true at the time of communication with the aggrieved party.
Another possible defense is to settle the matter out of court with the claimant or aggrieved party.