What You Should Know About The Consumer Leasing Act - by Illinois Personal Injury Lawyers
In Chicago, personal injury attorneys regularly represent clients who have been taken advantage of by an unfair lease agreement. These Illinois personal injury lawyers rely on the Consumer Leasing Act as a guideline. The Consumer Leasing Act is a federal law requiring lease agreements to include certain terms, which include:
- A statement of the number of lease payments and their dollar amounts
- Penalties for not paying on time
- Whether or not a lump sum payment is due at the end of the agreement
Violations of the Consumer Leasing Act are often apparent from the lease itself. In Illinois, personal injury lawyers who specialize in consumer law find common violations include:
- Unreasonable Early Termination Formula
The calculation of the amount due on termination of the lease before its termination date is determined by the early termination formula set forth in the lease. Any unreasonable charges or penalties for early termination may violate this provision. Examples include the prohibition of terminating the lease, e.g., during the first year, the addition of amounts not charged at the end of the lease, an unreasonable result as a result of applying the formula, e.g, the application of the formula during the last few months of the lease results in a disproportionately larger amount due than when applied earlier in the lease.
- Disclosure of Warranties
The lease must state all warranties available on the vehicle, not just the warranties extended by the lessor. Thus, the failure to state the manufacturer’s warranty violates the CLA.
- Disclosure of Interest on Security Deposits
In recent decisions, it has been held that the lease must disclose whether interest on a security deposit will be paid and to whom. Many lessors do not disclose that interest is being earned on the security deposit and retained by the lessor. These cases do not require that the lessor must pay interest earned on the security deposit to the consumer, only that the practice be disclosed.
- Failure to Follow the Early Termination Formula
The Seventh Circuit has recently held that the failure to apply the early termination formula as stated in the lease, even though the method applied was more advantageous to the consumer, violated the Consumer Leasing Act. Failure to Disclose the Trade-In or Down Payment Failure of the lease to set forth the trade-in and/or any moneys paid to reduce the price of the lease violates the CLA. Sometimes dealers will fail to state the consumer’s trade-in or down payment of the lease. The CLA is thus violated.
If you believe you or someone you know were the victim of a violation of the Consumer Leasing Act, you should contact an Illinois personal injury lawyer if you live in or around Chicago. Personal injury attorneys who specialize in consumer law can help you understand your rights according to the law.
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