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AG: Dealers should settle trade-in payoffs in 21 days

November 18, 2010

Dealers should pay off any loan balances on their customers’ traded-in vehicles within 21 days, said representatives of the attorney general’s office at a July 18 meeting of the Illinois Attorney General’s Advisory Committee, which meets occasionally to discuss dealer-related issues. 

Although not a statutory time limit, the 21-day recommendation comes seven months after Illinois Attorney General Lisa Madigan sued two Chicago dealerships for taking from 45 days to 167 days to settle their customers’ loan balances, creating late-payment remarks on the credit reports of 17 customers.

 

The dealers in the suits were charged with violating the state’s Consumer Protection and Deceptive Business Practices Act for failing to make "timely" payments on the loan balances, which forced some of the customers to make payments on vehicles they no longer owned 

In a news release about the suits, Madigan accused the dealers of "stalling the payments."

 

One of the dealerships subsequently closed its business. The other agreed to pay a $30,000 fine.

 

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