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Consumer Law News
Governor Blagojevich Signs New Consumer Protection Law Banning Misleading Solicitations From Entities Posing as Savings Institutions
SPRINGFIELD – Governor Rod R. Blagojevich today signed a new law that will help protect Illinois consumers against misleading solicitations from organizations using the names of banks and savings and loans institutions. The law came in response to fraudulent schemes where homeowners received materials in the mail asking them to refinance their mortgage or open a life insurance policy. The companies sending the mailings use the name of the consumers’ bank, or a similar name, making consumers think their bank is actually sending them the advertisement. "It’s alarming that there are companies out there posing as other companies in order to get consumers to refinance their mortgages. That’s exploitive and it’s wrong. This new law is intended to put a stop to it," said Gov. Blagojevich.
The Illinois Department of Financial and Professional Regulation (IDFPR) will enforce the new law, imposing the same penalties they use for commercial banks. Initially, IDFPR will impose a cease and desist order on any organization violating the law. If the organization does not comply, IDPFR can impose fines of up to $10,000. The use of a savings and loan association’s name or a savings bank’s name in an unsolicited offer could lead consumers to assume that the new solicitation can be trusted. Marketing companies use these names when sending materials to consumers, which gives the impression that they were sent by the customer’s financial institution. In some cases, the solicitation could be fraudulent -- an effort to obtain confidential information from the consumer, and in other cases it can be an effort to convince a consumer to switch banks.
"This is really about consumer protection from a small number of businesses trying to push the limit," said Sen. Collins. "Many of these third-party businesses are taking advantage of consumers by attaching reputable names of other businesses to their own applications, leaving consumers oftentimes unaware of who the application actually came from. It will now be illegal for third-party businesses to attach the name of another business that is not affiliated with them." The legislation becomes effective immediately.
Definition:
A large extra payment that may be charged at the end of a loan or lease.
Charity Scams
Definition:
If you’re approached by an unfamiliar charity, check it out. Most states require charities to register with them and file annual reports showing how they use donations. Ask your state or local consumer protection agency how to get this information.
Better Business Bureaus BBB
Definition:
Better Business Bureaus (BBBs) are nonprofit organizations supported primarily by local business members. The focus of BBB activities is to promote an ethical marketplace by encouraging honest advertising and selling practices, and by providing alternative dispute resolution.
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