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How to Start a Credit Repair Business

in

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Cost of starting a credit repair business

Roughly $200

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Cost to obtain the required $10,000 bond:

Roughly $200

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Potential average profit

$20,000 monthly

Credit Repair Laws in Illinois

There are federal and state laws for Illinois. You should be aware of both.

Federal Laws

The Credit Repair Organizations Act (CROA) is a federal law passed in September 1996 that regulates organizations whose purpose is increasing consumer’s credit score through credit repair. One of the most important things the CROA did is make it illegal for credit repair organizations to make false claims. Don’t worry though, staying compliant is pretty easy after you get familiar with the law! This law is moderated and enforced by the Federal Trade Commission (FTC), so the FTC has the authority to close down any credit repair organizations that are operating outside the parameters of these laws (like fraudulent or illegal activities).

The main sections include mandates that:

  • You can’t misrepresent your services (no false claims about what you will do for the client and definitely no promise of working and then not doing the work).
  • You must provide a written contract between you and the client that the client signs.
  • Your clients have three days to cancel the contract.
  • You can’t charge until services are rendered (most companies will do some initial document processing and then charge the client for the work they have just done).
  • Consumers can sue and get refunded all money paid (plus legal fees and damages)  if the credit repair organization is found to have violated the CROA with that consumer.
  • State laws can’t change or render any of the CROA ineffective.

Simply put, these laws were put in place to protect people from credit repair companies using scammy business practices. As long as you’re not trying to be sketchy and scam people, you should be able to stay compliant easily!

To read the Credit Repair Organizations Act in full, visit the United States House of Representatives’ record of the act here.

State Laws

Illinois has laws that govern how to start (and run!) a credit repair business in Illinois. Here are the relevant regulations and Illinois laws governing credit repair businesses that you need to be aware of:

Illinois State Laws

IL ST Ch. 815, ACT 605, Refs


Act 605. Credit Services Organizations Act

Chapter 815. Business Transactions
Contracts

Act 605. Credit Services Organizations Act

605/1. Short title

§ 1. This Act shall be known and may be cited as the "Credit Services Organizations Act".

605/2. Legislative findings and declaration

§ 2. The General Assembly finds and declares that:

(a) The ability to obtain and use credit has become of great importance to consumers who have a vital interest in establishing and maintaining their credit worthiness and credit standing. As a result, consumers who have experienced credit problems may seek assistance from credit service businesses which offer to improve the credit standing of such consumers. Certain advertising and business practices of some companies engaged in the business of credit services have worked a financial hardship upon the people of this State, often on those who are of limited economic means and inexperienced in credit matters.

(b) The purpose of this Act is to provide prospective consumers of credit services companies with the information necessary to make an informed decision regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices.

605/3. Definitions

§ 3. As used in this Act:

(a) "Buyer" means an individual who is solicited to purchase or who purchases the services of a credit services organization.

(b) "Consumer reporting agency" has the meaning assigned by Section 603(f), Fair Credit Reporting Act (15 U.S.C. Section 1681a(f)).

(c) "Extension of Credit" means the right to defer payment of a debt or to incur a debt and defer its payment offered or granted primarily for personal, family, or household purposes.

(d) "Credit Services Organization" means a person who, with respect to the extension of credit by others and in return for the payment of money or other valuable consideration, provides, or represents that the person can or will provide, any of the following services:
(i) improving a buyer's credit record, history, or rating:
(ii) obtaining an extension of credit for a buyer; or
(iii) providing advice or assistance to a buyer with regard to either subsection (i) or (ii).

"Credit Services Organization" does not include any of the following:
(i) a person authorized to make loans or extensions of credit under the laws of this State or the United States who is subject to regulation and supervision by this State or the United States, or a lender approved by the United States Secretary of Housing and Urban Development for participation in a mortgage insurance program under the National Housing Act (12 U.S.C. Section 1701 et seq.);
(ii) a bank or savings and loan association whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or a subsidiary of such a bank or savings and loan association;
(iii) a credit union doing business in this State;
(iv) a nonprofit organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1986, [FN1] provided that such organization does not charge or receive any money or other valuable consideration prior to or upon the execution of a contract or other agreement between the buyer and the nonprofit organization;
(v) a person licensed as a real estate broker by this state if the person is acting within the course and scope of that license;
(vi) a person licensed to practice law in this State acting within the course and scope of the person's practice as an attorney;
(vii) a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission acting within the course and scope of that regulation;
(viii) a consumer reporting agency; and
(ix) a residential mortgage loan broker or banker who is duly licensed under the Illinois Residential Mortgage License Act of 1987. [FN2]

(e) "Person" means an individual, corporation, partnership, joint venture or any business entity.

[FN1] 26 U.S.C.A. § 501.

[FN2] 205 ILCS 635/1-1 et seq.

605/4. Interpretations of Fair Credit Reporting Act

§ 4. In construing this Act consideration shall be given to the interpretations of the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.).

605/5. Prohibited acts

§ 5. No credit services organization, its salespersons, agents or representatives, or any independent contractor who sells or attempts to sell the services of a credit services organization shall:

(1) Charge or receive any money or other valuable consideration prior to full and complete performance of the services the credit services organization has agreed to perform for or on behalf of the buyer, unless the credit services organization has, in conformity with Section 10 of this Act, obtained a surety bond issued by a surety company licensed to do business in this State. If a credit services organization is in compliance with this subsection the salespersons, agents, and representatives who sell the services of such organization shall not be required to obtain the surety bond provided for by this Act.

(2) Charge or receive any money or other valuable consideration solely for the referral of a buyer to a retail seller who will or may extend credit to the buyer if such extension of credit is in substantially the same terms as those available to the general public.

(3) Make, or advise any buyer to make, any statement that is untrue or misleading, or that should be known by the exercise of reasonable care to be untrue or misleading, with respect to a buyer's credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer has made application for an extension of credit.

(4) Make or use any untrue or misleading representations in the offer or sale of the services of a credit services organization or engage, directly or indirectly, in any act, practice or course of business intended to defraud or deceive a buyer in connection with the office or sale of such services; including but not limited to: the amount or type of credit a consumer can expect to receive as a result of the performance of the services offered; the qualifications, training or experience of its personnel; or the amount of credit improvement the consumer can expect to receive as a result of the services.

605/6. Consumer statement

§ 6. Before the execution of a contract or other form of agreement between a buyer and a credit services organization or before the receipt by any such organization of money or other valuable consideration, whichever occurs first, such organization shall provide the buyer with a statement, in writing, containing the following:
(1) a complete and accurate statement of the buyer's right to review any file on the buyer maintained by a consumer reporting agency, as provided under the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.);
(2) a statement that the buyer may review his consumer reporting agency file at no charge if a request therefor therefore is made to such agency within 30 thirty days after receipt by the buyer of notice that credit has been denied and if such request is not made within the allotted time, the approximate charge to the buyer for such review;
(3) a complete and accurate statement of the buyer's right to dispute the completeness or accuracy of any item contained in any file on the buyer maintained by a consumer reporting agency;
(4) a complete and detailed description of the services to be performed by the credit services organization and the total cost to the buyer for such services;
(5) a statement notifying the buyer that: (i) credit reporting agencies have no obligation to remove information from credit reports unless the information is erroneous, cannot be verified or is more than 7 years old; and (ii) credit reporting agencies have no obligation to remove information concerning bankruptcies unless such information is more than 10 years old;
(6) a statement asserting the buyer's right to proceed against the surety bond required under Section 10; and
(7) the name and business address of any such surety company together with the name and the number of the account.

The credit services organization shall maintain on file, for a period of 2 years after the date the statement is provided, an exact copy of the statement, signed by the buyer, acknowledging receipt of the statement.

605/7. Contracts

§ 7. (a) Each contract between the buyer and a credit services organization for the purchase of the services of the credit services organization shall be in writing, dated, signed by the buyer, and shall include:

(1) a conspicuous statement in boldfaced type, in immediate proximity to the space reserved for the signature of the buyer, as follows:

"You, the buyer, may cancel this contract at any time before midnight of the third day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right";

(2) the terms and conditions of payment, including the total of all payments to be made by the buyer, whether to the credit services organization or to another person;

(3) a full and detailed description of the services to be performed by the credit services organization for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated date by which the services are to be performed or the estimated length of time for performing the services; and

(4) the address of the credit services organization's principal place of business and the name and address of its agent in the State authorized to receive service of process.

(b) The contract must have two easily detachable copies of a notice of cancellation. The notice must be in boldfaced type and in the following form:
"Notice of Cancellation"

"You may cancel this contract, without any penalty or obligation, within three days after the date the contract is signed.

If you cancel, any payment made by you under this contract will be returned within 10 days after the date of receipt by the seller of your cancellation notice.

To cancel this contract, mail or deliver a signed, dated copy of this cancellation notice, or other written notice to:

(name of seller) at (address of seller) (place of business) not later than midnight (date)

I hereby cancel this transaction."

.............................. ........................................
(date) (purchaser's signature)

(c) The credit services organization shall give to the buyer a copy of the completed contract and all other documents the credit services organization requires the buyer to sign at the time they are signed.

605/8. Noncompliance; waiver

§ 8. Any contract for services which does not comply with applicable provisions of this article shall be void and unenforceable as contrary to public policy. Any waiver by a buyer of the provisions of this Act shall be deemed void and unenforceable by a credit services organization as contrary to public policy. Any attempt by a credit services organization to have a buyer waive rights granted by this Act shall constitute a violation of this Act.

605/9. Registration statement

§ 9. (a) A credit services organization shall file a registration statement with the Secretary of State before conducting business in this State. The registration statement shall contain:

(1) the name and address of the credit services organization;

(2) the name and address of the registered agent authorized to accept service of process on behalf of the credit services organization;

(3) the name and address of any person who directly or indirectly owns or controls 10 percent or more of the outstanding shares of stock in the credit services organization; and

(4) the name, numbers, and location of the surety company issuing a surety bond maintained as required by Section 10 of this Act.

(b) The registration statement must also contain either:

(1) a full and complete disclosure of any litigation or unresolved complaint filed with a governmental authority of this State, any other state or the United States relating to the operation of the credit services organization; or

(2) a notarized statement that states that there has been no litigation or unresolved complaint filed with a governmental authority of this State, any other state or the United States relating to the operation of the credit services organization.

(c) The credit services organization shall update such statement not later than the 90th day after the date on which a change in the information required in the statement occurs.

(d) Each credit services organization registering under this Section shall maintain a copy of the registration statement in their files. The credit services organization shall allow a buyer to inspect the registration statement on request.

(e) The Secretary of State may charge each credit services organization that files a registration statement a reasonable fee not to exceed $100 to cover the cost of filing.

605/10. Surety bond

§ 10. If a credit services organization is required to obtain a surety bond pursuant to paragraph (1) of Section 5 of this Act, the following procedures shall be applicable:

(a) If a bond is obtained, a copy of it shall be filed with the Office of the Secretary of State.

(b) The required bond shall be in favor of the State of Illinois for the benefit of any person who is damaged by any violation of this Act. The bond shall also be in favor of any person damaged by such practices. Any person claiming against the bond for a violation of this Act may maintain an action at law against the credit services organization and against the surety. The surety shall be liable only for actual damages and not the punitive damages permitted under Section 11(b) of this Act. The aggregate liability of the surety to all persons damaged by a credit services organization's violation of this Act shall in no event exceed the amount of the bond.

(c) The bond shall be in the amount of $100,000 and shall be maintained for a period of 2 years after the date that the credit services organization ceases operations.

605/11. Damages

§ 11. Any person injured by a violation of this Act or by the credit services organization's breach of a contract entered into pursuant to Section 7 of this Act, may bring any action for recovery of actual damages. Such person may also be awarded punitive damages, reasonable attorney's fees and court costs.

605/12. Injunction

§ 12. A. The Attorney General, the State's Attorney of any county, or a buyer may bring an action in a circuit court to enjoin a violation of this Act. In addition to any injunction, the Attorney General or any State's Attorney or any county, in the name of the People of the State of Illinois , may seek to recover damages pursuant to this Act.

605/13. Misdemeanor; felony

§ 13. Any person, as defined under this Act, violating any provision of this Act except breach of contract, upon conviction for the first offense, is guilty of a Class A misdemeanor. Upon conviction of a second or subsequent offense the violator is guilty of a Class 4 felony.

605/14. Burden of proof

§ 14. In an action under this Act the burden of proving an exemption under paragraph (d) of Section 3 is on the person claiming the exemption.

605/15. Nature of remedies; violation of Consumer Fraud and Deceptive Business Practices Act

§ 15. The remedies provided by this Act are in addition to other remedies provided by law. A violation of this Act shall also constitute a violation of the Consumer Fraud and Deceptive Business Practices Act. [FN1]

[FN1] 815 ILCS 505/1 et seq.

605/16. Liberal construction

§ 16. This Act shall be liberally construed to effect the purposes thereof.

Current through P.A. 95-5 of the 2007 Reg. Sess.
END OF DOCUMENT

815 ILCS 505/2Z, Formerly cited as IL ST CH 121 1/2 P 262Z

815 ILCS 505/2Z

Formerly cited as IL ST CH 121 1/2 ¶ 262Z

Chapter 815. Business Transactions
Deceptive Practices
Act 505. Consumer Fraud and Deceptive Business Practices Act
505/2Z. Violations of other Acts

§ 2Z. Violations of other Acts. Any person who knowingly violates the Automotive Repair Act, [FN1] the Automotive Collision Repair Act, [FN2] the Home Repair and Remodeling Act, [FN3] the Dance Studio Act, [FN4] the Physical Fitness Services Act, [FN5] the Hearing Instrument Consumer Protection Act, [FN6] the Illinois Union Label Act, [FN7] the Job Referral and Job Listing Services Consumer Protection Act, [FN8] the Travel Promotion Consumer Protection Act, [FN9] the Credit Services Organizations Act, [FN10] the Automatic Telephone Dialers Act, [FN11] the Pay-Per-Call Services Consumer Protection Act, [FN12] the Telephone Solicitations Act, [FN13] the Illinois Funeral or Burial Funds Act, [FN14] the Cemetery Care Act, [FN15] the Safe and Hygienic Bed Act, [FN16] the Pre-Need Cemetery Sales Act, [FN17] the High Risk Home Loan Act, [FN18] the Payday Loan Reform Act, [FN19] the Mortgage Rescue Fraud Act, subsection (a) or (b) of Section 3-10 of the Cigarette Tax Act, [FN20] the Payday Loan Reform Act, subsection (a) or (b) of Section 3-10 of the Cigarette Use Tax Act, [FN21] the Electronic Mail Act, [FN22] paragraph (6) of subsection (k) of Section 6-305 of the Illinois Vehicle Code, [FN23] Article 3 of the Residential Real Property Disclosure Act, [FN24] the Automatic Contract Renewal Act, [FN25] or the Personal Information Protection Act [FN26] commits an unlawful practice within the meaning of this Act.

Case Law

I identified several cases construing the act. In Arnold v. Goldstar Financial Systems, Inc., 2002 WL 1941546 (N.D. Ill. , 2002), the court concluded that it lacked personal jurisdiction over an out of state credit repair organization where the credit repair client was in state and the credit repair organization’s only contact with the state was a contact with debtor. In state plaintiff’s were able to establish personal jurisdiction over the credit repair business for purposes of their claims where the business contacted them directly by phone and mail in state. There are also several cases ruling that the Act does not apply to retailers who help their customers obtain credit. See Cannon v. William Chevrolet/Geo, Inc., 794 N.E.2d 843 (Ill.App. 1 Dist. 2003) (Credit Services Act deals does not apply to car dealership that obtained credit for its customers). Midstate Siding and Window Co., Inc. v. Rogers, 204 Ill.2d 314, 789 N.E.2d 1248 ( Ill. 2003) (credit services act does not apply to siding company that obtained credit for customers)



Arnold v. Goldstar Financial Systems, Inc.
Not Reported in F.Supp.2d, 2002 WL 1941546
N.D.Ill.,2002.
August 22, 2002

United States District Court, N.D. Illinois , Eastern Division.
Jon ARNOLD, et al., Plaintiff,
v.
GOLDSTAR FINANCIAL SYSTEMS, INC., et al., Defendants.
No. 01 C 7694.
Aug. 22, 2002.
Customers sued company providing credit repair services, and its law firm, claiming breach of contract to manage debt. Company and attorney moved to dismiss or compel arbitration. The District Court, Gottschall, J., held that: (1) personal jurisdiction was lacking over attorney; (2) court did not have jurisdiction over claim of nonresident customer; (3) court had jurisdiction over claims made by Illinois residents; (4) motion to compel arbitration would be treated as motion to stay proceedings; and (5) proceedings would not be stayed, due to likelihood that costs of arbitration would be prohibitive.
Motion granted in part, denied in part.
[1] KeyCite Notes

170B Federal Courts
170BII Venue
170BII(A) In General
170Bk76 Actions Against Non-Residents; “Long-Arm” Jurisdiction in General
170Bk76.20 k. Persons Acting in Representative Capacity, Venue For; Fiduciary Shield. Most Cited Cases

Under Illinois law, court lacked personal jurisdiction over attorney employed by company in credit repair business, in suit by customers alleging federal and state violations arising out of failure to live up to promises; attorney acted only in her capacity as employee of company, and was protected by fiduciary shield doctrine. S.H.A. 735 ILCS 5/2-209(c).

[2] KeyCite Notes

170B Federal Courts
170BII Venue
170BII(A) In General
170Bk77 Corporations, Actions by or Against
170Bk81 k. Sales, Solicitation and Advertising. Most Cited Cases

Under Illinois law, court had personal jurisdiction over nonresident company providing credit repair services, sued by Illinois customers for failing to honor promises; representatives of company had made phone calls to customers in state, urging them to enter into contract. S.H.A. 735 ILCS 5/2-209(c).

[3] KeyCite Notes

92 Constitutional Law
92XXVII Due Process
92XXVII(E) Civil Actions and Proceedings
92k3961 Jurisdiction and Venue
92k3965 Particular Parties or Circumstances
92k3965(5) k. Services and Service Providers. Most Cited Cases

170B Federal Courts KeyCite Notes
170BII Venue
170BII(A) In General
170Bk77 Corporations, Actions by or Against
170Bk84 k. Miscellaneous Particular Activities. Most Cited Cases

Court sitting in Illinois lacked personal jurisdiction, consistent with due process, over nonresident company in credit repair business, sued by nonresident customer for failing to honor promises, when only contact with Illinois was alleged failure of company to pay one creditor located in state. U.S.C.A. Const.Amend. 5.

Court sitting in Illinois lacked personal jurisdiction, consistent with due process, over nonresident company in credit repair business, sued by nonresident customer for failing to honor promises, when only contact with Illinois was alleged failure of company to pay one creditor located in state. U.S.C.A. Const.Amend. 5.

[4] KeyCite Notes

92 Constitutional Law
92XXVII Due Process
92XXVII(E) Civil Actions and Proceedings
92k3961 Jurisdiction and Venue
92k3965 Particular Parties or Circumstances
92k3965(5) k. Services and Service Providers. Most Cited Cases

170B Federal Courts KeyCite Notes
170BII Venue
170BII(A) In General
170Bk77 Corporations, Actions by or Against
170Bk81 k. Sales, Solicitation and Advertising. Most Cited Cases

Court sitting in Illinois had personal jurisdiction, consistent with due process, over nonresident company in credit repair business, sued by resident customer for failing to honor promises, when representative of company called customer in state, to solicit signing of contract. U.S.C.A. Const.Amend. 5.

Court sitting in Illinois had personal jurisdiction, consistent with due process, over nonresident company in credit repair business, sued by resident customer for failing to honor promises, when representative of company called customer in state, to solicit signing of contract. U.S.C.A. Const.Amend. 5.

[5] KeyCite Notes

170B Federal Courts
170BII Venue
170BII(A) In General
170Bk77 Corporations, Actions by or Against
170Bk79 k. Corporate Activities and Contacts Within District; Doing Business in General. Most Cited Cases

170B Federal Courts KeyCite Notes
170BII Venue
170BII(A) In General
170Bk77 Corporations, Actions by or Against
170Bk81 k. Sales, Solicitation and Advertising. Most Cited Cases

Court sitting in Illinois had personal jurisdiction over nonresident company which repaired credit, brought by Illinois resident claiming that company did not honor its promises, when representative called resident in state, soliciting contract, and resident transmitted information and later contract payments over interactive Internet site. U.S.C.A. Const.Amend. 5.

[6] KeyCite Notes

29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(C) Particular Subjects and Regulations
29Tk218 k. Credit Repair and Counseling. Most Cited Cases

Court had subject matter jurisdiction, under Credit Repair Organizations Act (CROA), over claim that for-profit repair organization did not honor promises made to customers, even though company's successor-in-interest was non-profit corporation not covered by CROA. 15 U.S.C.A. § 1679 et seq.

[7] KeyCite Notes

25T Alternative Dispute Resolution
25TII Arbitration
25TII(D) Performance, Breach, Enforcement, and Contest
25Tk185 Stay of Arbitration
25Tk188 k. Proceedings. Most Cited Cases

Court would treat motion to compel arbitration, under Federal Arbitration Act (FAA), as motion for stay of arbitration, when forum selection clause of contract specified another jurisdiction, precluding orders to compel by courts in other than specified jurisdiction. 9 U.S.C.A. §§ 3, 4.

[8] KeyCite Notes

170B Federal Courts
170BVI State Laws as Rules of Decision
170BVI(C) Application to Particular Matters
170Bk403 k. Arbitration. Most Cited Cases

Federal law, rather than state law specified in contractual choice of law provision, governed question whether arbitration clause in contract could be avoided on grounds that contract was illegal.

[9] KeyCite Notes

25T Alternative Dispute Resolution
25TII Arbitration
25TII(B) Agreements to Arbitrate
25Tk131 Requisites and Validity
25Tk134 Validity
25Tk134(1) k. In General. Most Cited Cases

Under governing federal law, contractual obligation to arbitrate disputes was not affected by claim that underlying contract was illegal.

[10] KeyCite Notes

25T Alternative Dispute Resolution
25TII Arbitration
25TII(B) Agreements to Arbitrate
25Tk131 Requisites and Validity
25Tk134 Validity
25Tk134(1) k. In General. Most Cited Cases

Provision of agreement between credit repair company and customer, under which customer agreed not to participate in class action, as part of arbitration clause, was not unenforceable as impermissible waiver of protection provided by or consumer right under Credit Repair Organizations Act (CROA). Consumer Credit Protection Act, § 402 et seq., as amended, 15 U.S.C.A. § 1679 et seq.

[11] KeyCite Notes

25T Alternative Dispute Resolution
25TII Arbitration
25TII(D) Performance, Breach, Enforcement, and Contest
25Tk190 Stay of Proceedings Pending Arbitration
25Tk196 k. Particular Cases. Most Cited Cases

Prohibitive expense of arbitration, in Florida, precluded stay of lawsuit by Illinois residents against nonresident company providing credit repair services, claiming nonfulfillment of contractual promises, in order that arbitration could proceed; it was estimated that arbitration would cost each claimant, who was already hard pressed financially, $2,550, as opposed to court filing fee of $150.

MEMORANDUM OPINION & ORDER

GOTTSCHALL, J.
*1 In this putative class action, plaintiffs allege that defendants violated various state and federal laws in the course of offering and providing them with credit repair services. Defendants have moved for dismissal on jurisdictional grounds and for an order compelling arbitration. As explained below, the request for dismissal is granted in part and denied in part, and the request for an order compelling arbitration is denied.

I. Background

In their first amended complaint, plaintiffs Jon Arnold, Cary Sorbo, and Julian Dorsey, on behalf of themselves and similarly situated individuals, allege that Goldstar Financial Systems, Inc. (“Goldstar”), doing business as Gibson Trust, Inc. (“Gibson”), and The Law Office of Dashia Trowers, along with a putative defendant class of similarly situated attorneys, engaged in fraudulent, unfair, and deceptive practices in promising to manage consumer debt, improve plaintiffs' credit, and prevent creditor harassment. In either late 1999 or early 2000, each plaintiff entered into a credit repair services contract with Goldstar, which was estimated to last between four and five years. The basic notion was that Goldstar would work with each plaintiffs' creditors to consolidate and reduce payments, would make the payments each month, and would generally serve as a buffer between plaintiffs and their creditors. According to plaintiffs, Goldstar violated both state and federal laws and generally failed to live up to its promises and representations. Plaintiffs' complaint consists of three counts: (1) violations of the Credit Repair Organizations Act (“CROA”), 15 U.S.C. § 1679 et seq.; (2) illegality of contract; and (3) violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq. The first two counts are brought by all plaintiffs against all defendants; the third is brought by Arnold and Sorbo, individually, against Goldstar alone. Defendants move to dismiss the complaint for lack of personal and subject matter jurisdiction. In the alternative, defendants seek an order compelling arbitration.

II. Analysis

A. Personal Jurisdiction

Once personal jurisdiction is contested, a plaintiff has the burden of providing sufficient evidence to establish a prima facie case of personal jurisdiction. “The allegations in the complaint are to be taken as true unless controverted by the defendants' affidavits; and any conflicts in the affidavits are to be resolved in his favor.” Turnock v. Cope, 816 F.2d 332, 333 (7th Cir.1987). A motion to dismiss for lack of personal jurisdiction should be denied if the plaintiff alleges sufficient facts to support a reasonable inference that the defendant can be subjected to jurisdiction of the court. Jackam v. Hosp. Corp. of Am. Mideast, Ltd., 800 F.2d 1577, 1579 (11th Cir.1986).

1. Illinois Law

In cases involving a federal question, a plaintiff must show that the defendant is amenable to service in the forum state and that exercising jurisdiction over the person of the defendant would not offend constitutional standards of due process. Cent. States, S.E. & S.W. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 939 (7th Cir.2000). Because no special rule or statute applies here, service is effective to establish jurisdiction over a defendant only if that defendant would be subject to the jurisdiction of an Illinois state court. Fed.R.Civ.P. 4(k). The Illinois long-arm statute provides for jurisdiction on any basis permitted by the Illinois and federal constitutions. 735 ILCS 5/2-209(c). Under the Illinois constitution, “[j]urisdiction is to be asserted only when it is fair, just, and reasonable to require a nonresident defendant to defend an action in Illinois, considering the quality and nature of the defendant's acts which occur in Illinois or which affect interests located in Illinois.” Rollins v. Ellwood, 141 Ill.2d 244, 152 Ill.Dec. 384, 565 N.E.2d 1302, 1316 (Ill.1990). Of particular relevance here, the Illinois Supreme Court has held that where an individual defendant's conduct in Illinois “was a product of, and was motivated by, his employment situation and not his personal interests, ... it would be unfair to use this conduct to assert personal jurisdiction over him as an individual.” Id. at 1318.

*2 [1] Defendant Trowers swears that Goldstar management made all decisions for transactions with its clients, that prior to this lawsuit she was not aware that any of the named plaintiffs were clients of Goldstar, that she had no agreement to provide any services to them, that she does not remember performing any services for them, and that she signed contracts on Goldstar's behalf only as an employee of Goldstar and not in any other capacity. (Defs.' Mem. Supp. Mot. Dismiss Ex. B.) Plaintiffs argue in response that the evidence contradicts Trowers's averments that she had no communications with the plaintiffs and performed no services on their behalf. In support of this argument, plaintiffs cite three documents: (1) a letter sent to plaintiff Dorsey printed on letterhead listing both Goldstar and “The Law Office of Dashia N. Trowers”; (2) a statement in the client information sheet advising that late payments would render “ATTORNEY'S agent or subcontractor” unable to make timely disbursements to creditors; and (3) a reference on Goldstar's website boasting of its “full legal staff.” (Pls.' Resp. at 5.) The second and third documents make no reference to Trowers. While the joint letterhead does tend to refute Trowers's claim that her law offices had no connection to Goldstar, the letterhead sheds no light on the capacity in which Trowers and her law offices acted. Her averments that Goldstar's management made all the decisions concerning client transactions and that she acted only in her capacity as an employee of Goldstar stand unrebutted and bring her within the fiduciary shield doctrine endorsed by the Illinois Supreme Court. Because her only contacts with Illinois apparently derived from, and were motivated by, her employment status, the Illinois constitution prohibits the exercise of personal jurisdiction over her and her law firm.FN1 All claims against Trowers's law offices are therefore dismissed.
FN1. For similar reasons, exercising personal jurisdiction over Trowers might also violate federal due process. See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) (“The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.”); cf. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479 n. 22, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (“[W]hen commercial activities are ‘carried on in behalf of’ an out-of-state party those activities may sometimes be ascribed to the party, at least where he is a ‘primary [participant]’ in the enterprise and has acted purposefully in directing those activities.”) (citations omitted).
[2] With respect to Goldstar, the case law applying the Illinois constitution provides less clear guidance, but tends to point in the other direction, at least with respect to plaintiffs Arnold and Sorbo.FN2 Neither of the two cases cited by defendants on the personal jurisdiction question applies the Illinois constitutional standard. Khan v. Van Remmen, Inc., 325 Ill.App.3d 49, 258 Ill.Dec. 628, 756 N.E.2d 902 (Ill.App.Ct.2001); MJC-A World of Quality, Inc. v. Wishpets Co., No. 00 C 6803, 2001 U.S. Dist. LEXIS 13178 (N.D.Ill. Aug.22, 2001). Nor does this court's independent research reveal especially helpful case law. To the extent the Illinois case law is applicable, it suggests that these two plaintiffs clear the state constitutional hurdle. Plaintiffs allege (and defendants do not dispute) that each entered into a long-term contractual relationship with Goldstar, ranging in estimated duration between four and five years. Goldstar telephoned Arnold and Sorbo in Illinois and entered into ongoing commercial relationships that would continue for years to have substantial impacts on the interests of Illinois residents. See Alderson v. Southern Co., 321 Ill.App.3d 832, 254 Ill.Dec. 514, 747 N.E.2d 926, 948 (Ill.App.Ct.2001) (holding that it was “fair, just, and reasonable” under the Illinois due process clause to exercise personal jurisdiction over defendants whose economic activities had “a substantial effect upon interests located in Illinois”); cf. Viktron L.P. v. Program Data, Inc., 326 Ill.App.3d 111, 259 Ill.Dec. 706, 759 N.E.2d 186, 195 (Ill.App.Ct.2001) (“Where there is an ongoing commercial relationship, each party will typically have a substantial jurisdictional claim at home against the other.”) (internal quotation marks and citation omitted). This type of activity is apparently sufficient to ground personal jurisdiction under Illinois law.
FN2. Dorsey, who has Illinois debts but is not an Illinois resident, presents a more difficult case. See infra. Because plaintiffs clearly fail to make out a prima facie case under the federal due process clause for personal jurisdiction over Goldstar with respect to Dorsey's claim, the court expresses no opinion as to the Illinois constitutional question and rests its holding with respect to Dorsey's claim on federal grounds instead.

2. Federal Due Process Clause

*3 The existence of personal jurisdiction over Goldstar therefore turns on the strictures imposed by the federal due process clause. Due process requires that a nonresident defendant have “minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotation marks omitted). The touchstone is foreseeablility, whether “the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Only purposeful acts count, and a defendant may not be haled into a jurisdiction solely as a result of “random,” “fortuitous,” or “attenuated” contacts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citation omitted).

Jurisdiction is proper, however, where the contacts proximately result from actions by the defendant himself that create a “substantial connection” with the forum State . Thus where the defendant “deliberately” has engaged in significant activities within a State, or has created “continuing obligations” between himself and residents of the forum, he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by “the benefits and protections” of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.

Id. at 475-76 (citations omitted). Once it has been decided that a defendant purposefully established minimum contacts within the forum State, the reasonableness of asserting personal jurisdiction may be evaluated in light of “the burden on the defendant,” “the forum State's interest in adjudicating the dispute,” “the plaintiff's interest in obtaining convenient and effective relief,” “the interstate judicial system's interest in obtaining the most efficient resolution of controversies,” and the “shared interest of the several States in furthering fundamental substantive social policies.” Id. at 477 (quoting World-Wide Volkswagen, 444 U.S. at 292). These factors can either lower the level of minimum contacts required or, if the defendant puts forward a compelling case, render the exercise of personal jurisdiction unreasonable. Id. at 477-78.

Personal jurisdiction may be either “general” or “specific.” Since plaintiffs here do not claim that Goldstar had “continuous and systematic general business contacts” with Illinois,FN3 each plaintiff must show that his or her claim arises out of or is related to Goldstar's contacts with Illinois, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984), and that those contacts were not “random,” “fortuitous,” or “attenuated.” Burger King, 471 U.S. at 475. Each plaintiff has his or her own claims against Goldstar. The personal jurisdiction analysis therefore must be plaintiff-specific. Cf. Phillips Exeter Academy v. Howard Phillips Fund, Inc., 196 F.3d 284, 289 (1st Cir.1999) (“Questions of specific jurisdiction are always tied to the particular claims asserted.”). But since the three claims asserted by any particular plaintiff rest on a common set of operative facts, there is no need to examine the three claims separately.
FN3. Although plaintiffs point to Goldstar's maintenance of an interactive website, they do not assert that Goldstar actually did business through the website with anyone other than plaintiffs.

a. Dorsey

*4 [3] Plaintiffs fail to establish sufficient contacts between Goldstar and Illinois with respect to plaintiff Dorsey. The complaint alleges that Dorsey is a resident of Pennsylvania and signed an agreement with Goldstar in or about May 2000. Plaintiffs attach to their response brief a letter dated June 1, 2000 from Goldstar to Dorsey at a Pennsylvania address. The inference that Dorsey was never an Illinois resident at any time relevant to her claim against Goldstar is bolstered by plaintiffs' argument that Goldstar “purposefully directed its activities to Illinois residents such as Plaintiffs Arnold and Sorbo” (Pls.' Resp. at 4), and by the omission of Dorsey from Count III, which is premised on Illinois law. The only relevant connection to Illinois is apparently Goldstar's alleged failure to make payments on behalf of Dorsey to an Illinois creditor, Loyola College . This lone contact with Illinois is far too fortuitous and attenuated to support the exercise of personal jurisdiction over Goldstar with respect to Dorsey's claims. Dorsey's claims against Goldstar are dismissed.

b. Sorbo

[4] The plaintiff with the next strongest case for personal jurisdiction is Sorbo. Sorbo alleges that she is an Illinois resident. It is unclear whether she was in Illinois at all relevant times, but it is reasonable to draw such an inference. In their response brief, plaintiffs describe Sorbo as an Illinois resident and nothing in the record suggests a change in her place of residence. Sorbo alleges that, prior to signing her client agreement in November 1999, a Goldstar “specialist,” Roby Dudley, made various representations and promises to her, encouraging her to sign up for services from Goldstar. The president of Goldstar, Patrick O'Toole, avers that all communications with the plaintiffs were initiated in Florida , so Dudley must have placed the call to Sorbo. After this communication, Goldstar faxed Sorbo a contract which included her address. Under the contract, Goldstar was to pay her creditors from funds automatically withdrawn from her checking account on a monthly basis for an estimated period of 51 months. To summarize, Sorbo has alleged sufficient facts to infer that Goldstar called her at least once in Illinois, sent her a fax in Illinois, and entered into a long-term contractual relationship with an Illinois resident obligating itself to withdraw funds monthly from an Illinois checking account.

On the other hand, O'Toole avers that the company has no offices in Illinois , has never had any personnel in Illinois , and has never solicited business in Illinois . He further declares that the contracts “were completed in Florida ” and that the place of performance is in Florida . (Defs.' Mem. Ex. A.) Physical absence, standing alone, is not decisive. “Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted.” Burger King, 471 U.S. at 476; accord Daniel J. Hartwig Assoc., Inc. v. Kanner, 913 F.2d 1213, 1219 n. 3 (7th Cir.1990). Nor is the location of contract formation or performance dispositive. Burger King, 471 U.S. at 478 (“The Court long ago rejected the notion that personal jurisdiction might turn on ‘mechanical’ tests, or on ‘conceptualistic ... theories of the place of contracting or of performance.” ’) (citations omitted). However O'Toole may define “place of performance” in his affidavit, he does not dispute Sorbo's allegation that the agreement called for monthly withdrawals by Goldstar from her checking account.

*5 O'Toole does not dispute the existence or the content of the alleged pre-agreement conversation between Sorbo and Dudley and does not suggest that Sorbo has ever left Illinois . A business phone call made to a person in Illinois obviously counts as solicitation in Illinois . See Lung v. Yachts Int'l, Ltd., 980 F.Supp. 1362, 1368 (D.Haw.1997) (holding that telephone calls to the forum qualify as active solicitation). It is therefore difficult to reconcile O'Toole's statement that Goldstar never solicited business in Illinois with his statement that any communication with the plaintiffs was initiated in Florida . Perhaps O'Toole is operating under the false premise that solicitation in a state requires a physical presence therein. Resolving this tension in favor of Sorbo, as the court must, Goldstar's agent initiated contact with Sorbo in Illinois in a successful attempt to procure a contractual relationship with an Illinois resident that would span over four years and that would obligate Goldstar to make monthly withdrawals from an Illinois checking account.

Goldstar could reasonably anticipate being haled into an Illinois court on the basis of these contacts. Active solicitation of a forum resident resulting in a single agreement is sufficient to support personal jurisdiction under the federal due process clause. Madison Consulting Group v. South Carolina, 752 F.2d 1193, 1202-03 (7th Cir.1990). More important, Goldstar knowingly undertook “continuing obligations” to an Illinois resident. Burger King, 471 U.S. at 476. The case at bar closely resembles Daniel J. Hartwig, in which the Seventh Circuit held that “[b]ecause [defendant] knowingly reached out to a Wisconsin business and created a continuing relationship with that business [, which lasted four years], we cannot say that [defendant]'s contacts with Wisconsin were ‘random, fortuitous or attenuated.” ’ 913 F.2d at 1219. That at least one monthly Illinois act was contemplated by the agreement bolsters the court's conclusion that Sorbo has made out a prima facie showing of sufficient purposeful minimum contacts between Goldstar and Illinois . See id. at 1219 (“Although not dispositive, the fact that a plaintiff performs a substantial amount of a contract in the forum state constitutes another meaningful contact between the defendant and the forum.”).

c. Arnold

[5] Plaintiff Jon Arnold's factual allegations are more detailed than those of the other plaintiffs. He is an Illinois resident. As with Sorbo, there is no reason to think that any of Goldstar's contacts with Arnold took place while Arnold was in another state. Around October 1999, Arnold responded to Internet advertising by visiting Goldstar's website. On the website, he apparently submitted personal information for analysis by Goldstar. Roby Dudley, the same Goldstar agent who later contacted Sorbo, followed up with a phone call to Arnold , encouraging him to sign up for services with Goldstar. On October 4, 1999, Arnold received an email from Goldstar which included instructions for activating an account and a draft contract. After signing and returning the contract, estimated to last 57 months, Arnold made his scheduled November payment through the website. In the next few months, Goldstar sent Arnold at least one letter and several billing statements. Jim Faust, a representative of Goldstar's, called Arnold once to discuss issues relating to Arnold 's contract.

*6 Goldstar's alleged contacts with Arnold in Illinois easily clear the minimum level required by the federal due process clause to support personal jurisdiction in this forum. Goldstar purposefully established a contractual relationship with an Illinois resident which was expected to last nearly five years. Although it does not appear that Goldstar agreed to perform any services in Illinois , there is no question that the company created “continuing obligations” between itself and Arnold, an Illinois resident. Burger King, 471 U.S. at 476. Goldstar repeatedly directed its activities at Illinois , telephoning Arnold twice, sending him statements on a monthly basis, and emailing him at least once. Goldstar's website bolsters a finding of sufficient minimum contacts in two ways. First, by inviting visitors to submit personal information in the hope of later commercial gain, the website was “interactive” enough to constitute “active solicitation” in Illinois.FN4 Zippo Mfg. Co. v. Zippo Dot Com, 952 F.Supp. 1119, 1124-25 (W.D.Pa.1997) (citing Maritz, Inc. v. Cybergold, Inc., 947 F.Supp. 1328 (E.D.Mo.1996)). As observed above, active solicitation in a forum leading to a contract with an in-forum resident is sufficient grounds for personal jurisdiction. Madison Consulting, 752 F.2d at 1202-03. Second, Arnold 's submission of a monthly payment through the website suggests that Goldstar was actually transacting business over the Internet, not merely exchanging information. Zippo, 952 F.Supp. at 1123-25 (citing Compuserve, Inc. v. Patterson, 89 F.3d 1257 (6th Cir.1996)). This is roughly analogous to Goldstar setting up a 24-hour storefront in Illinois for Arnold 's use.
FN4. Although Goldstar objects to the printed web pages attached by plaintiffs to their response brief, Goldstar does not dispute Arnold 's allegation that he submitted personal information and made a monthly payment via the website. Even ignoring the printed pages, the website was interactive on the undisputed allegations of fact.
Goldstar does not expressly argue, let alone put forward a compelling case, that subjecting it to the personal jurisdiction of a court in Illinois would be unreasonable in light of other constitutionally relevant factors. See World-Wide Volkswagen, 444 U.S. at 292. The only hint of such an argument is O'Toole's averment that, with the exception of the plaintiffs and any records in their possession, all relevant documents and witnesses are in Florida . There is no indication as to the number of such witnesses or documents. Goldstar fails to show that trying this case in Illinois would be unduly burdensome for it or that transporting witnesses and documents to Illinois would substantially hinder judicial efficiency. Even if most of the evidence is in Florida , Illinois has a strong countervailing interest in protecting its residents' rights under state and federal law and plaintiffs have an interest in obtaining convenient and effective relief. On this record, it does not appear that forcing Goldstar to litigate this matter in Illinois would impose a constitutionally intolerable burden.

B. Subject Matter Jurisdiction

[6] Defendants argue that this court lacks subject matter jurisdiction. Plaintiffs' only federal cause of action arises under the CROA, which does not apply to non-profit organizations. 15 U.S.C. § 1679a(3)(B)(i). O'Toole avers that Gibson Trust, Inc., Goldstar's successor-in-interest, is a non-profit corporation. As plaintiffs observe in response, however, their contracts were with Goldstar, which was not a non-profit organization. Plaintiffs also assert that they were not informed about the transfer of their accounts to Gibson Trust until well after the alleged wrongdoing took place. In their reply brief, defendants do not dispute any of these assertions. Obtaining non-profit status after the fact cannot protect an entity from liability for its previous misdeeds. This court therefore has subject matter jurisdiction.FN5
FN5. After quoting a choice-of-law provision in the contracts, defendants assert in a single sentence that “[t]he pendant state law claims fail because Florida law governs the agreement.” (Mem. at 3.) Counts II and III allege claims under Illinois law, but defendants fail to establish that facts consistent with the complaint could not give rise to recovery under Florida law. What amounts to a Rule 12(b)(6) motion by defendants is therefore denied.

C. Arbitration Clause

*7 Defendants, citing § 4 of the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., ask this court for an order compelling “binding arbitration in accordance with the terms of the agreements at issue” (Mem. at 4.) Defendants assert that each of plaintiffs' contracts included the following provision:

Any dispute between us that cannot be amicably resolved; [sic] as to all claims or controversies arising out of this Agreement, shall be settled solely and exclusively by binding arbitration in Ft. Lauderdale , Florida . Arbitration shall be administered by, and under the Commercial Arbitration Rules of the prevailing American Arbitration Association.... And judgment upon the award rendered by the arbitrator(s) may be entered and enforced in any court of competent jurisdiction.

( Id. at 3.) In a footnote, defendants claim that the agreements are attached as exhibits to the first amended complaint. ( Id. at 3 n. 4.) In fact, only Arnold 's agreement, which does contain the quoted language, appears in the exhibits. Plaintiffs' first response on the arbitration issue is that defendants “should be required to prove” that the other two plaintiffs signed agreements including the quoted language. (Resp. at 8.) However, plaintiffs do not deny the existence of such agreements. There is no requirement in the Federal Rules of Civil Procedure that parties attach complete copies of contracts rather than merely quote the relevant language. Mount Hawley Ins. Co. v. Guardsmark, Inc., No. 01 C 5088, 2001 U.S. Dist. LEXIS 9196, at *3-4 (N.D.Ill. July 2, 2001). By not disputing defendants' assertion that each plaintiff signed a contract that included this arbitration language, plaintiffs have conceded the point.

1. Order or Stay?

[7] Having established the existence of arbitration agreements providing for arbitration in Florida, a threshold question (mysteriously ignored by the parties) becomes whether this court has the power to grant defendants' request by entering an order compelling arbitration “in accordance with the terms of the agreements at issue.” (Mem. at 4.) It does not. Where an arbitration agreement contains a forum selection clause and the parties have not waived reliance on that clause, only a court in the selected forum can issue a § 4 order compelling arbitration. Snyder v. Smith, 736 F.2d 409, 418-20 & n. 8 (7th Cir.1984). Defendants quote the forum selection clause and seek an order compelling arbitration in accordance with the agreement, so there is no waiver. If anyone has waived the issue, it is plaintiffs; they have not requested, even in the alternative, that arbitration should take place in the Northern District of Illinois.

The question then is how to respond to defendants' request for relief that is outside of the power of this court to grant. At first blush, it is tempting simply to deny defendants' motion for this reason.FN6 If plaintiffs had raised the objection instead of briefing the question of arbitrability, then denying the motion may have been the appropriate course of action. But plaintiffs argued the merits of the arbitration issue instead and now the question is fully briefed. Both parties are apparently content to have this court decide whether arbitration in Florida is appropriate. This court hesitantly accepts the invitation by interpreting defendants' misguided motion for a § 4 order compelling arbitration as seeking the only relief actually available under the FAA from this court, a § 3 stay pending arbitration. Requiring the parties to re-brief the issue of arbitrability in another court would be a waste of judicial and attorney resources. Cf. Fed.R.Civ.P. 1 (stating that Federal Rules of Civil Procedure “shall be construed and administered to secure the just, speedy, and inexpensive determination of every action”). Defendant obviously seeks a judicial ruling that this matter must be arbitrated; the distinction between an order and a stay is more a matter of form than substance. An expeditious ruling is especially appropriate in the arbitration context. See Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 29, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983) (“The [FAA] calls for a summary and speedy disposition of motions or petitions to enforce arbitration clauses.”). Finally, there is no indication that any overlapping litigation is currently pending elsewhere, so there is no risk of duplicative effort or inconsistent judgments. Cf. Roe v. Gray, 165 F.Supp.2d 1164, 1174 (D.Colo.2001) (declining to rule on the question of arbitrability in the course of determining whether a § 3 stay was appropriate in deference to simultaneously pending proceedings).
FN6. If defendants had initiated this lawsuit seeking an order compelling arbitration in Florida , then dismissal would be the appropriate remedy. Snyder, 736 F.2d at 420 (“In a case ... where the petition to compel arbitration [is] the only relief sought, the district court should dismiss the petition or, upon motion, stay its proceedings.”); see also Merrill Lynch, Pierce, Fenner & Smith v. Lauer, 49 F.3d 323, 328 (7th Cir.1995). Not so here-plaintiffs are presumptively entitled to their choice of judicial forum.

2. Illegality

*8 [8] [9] Plaintiffs seek to avoid arbitration on the ground that the underlying contract is illegal. As a matter of federal law, this argument is a non-starter: the illegality of a contract containing an arbitration clause does not infect the clause itself. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-04, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967); Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int'l, Ltd., 1 F.3d 639, 642 (7th Cir.1993). This explains why the only case law plaintiffs muster in support of their contrary position comes from state courts. Ala. Catalog Sales v. Harris, 794 So.2d 312, 314 (Ala.2000); FastFunding The Co., Inc. v. Betts, 758 So.2d 1143, 1144 (Fla.Dist.Ct.App.2000). This court is bound by the Seventh Circuit's interpretation of federal law and nothing connects the case at bar to Alabama , so precedent from that jurisdiction is not helpful to plaintiffs' cause.

Although the parties apparently fail to realize it, plaintiffs' reliance on FastFunding is more intriguing. According to defendants, the contracts provide that all questions concerning them are to be governed by Florida law. Perhaps plaintiffs, by citing a Florida case, mean to suggest that this general choice-of-law provision indicates that the parties opted for Florida rather than federal law to control the issue of arbitrability. It certainly would have been within the power of the parties to reach such an agreement. See Volt Info. Sciences v. Bd. of Trustees, 489 U.S. 468, 474-79, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (declining to overturn a California court's conclusion that a general choice-of-law provision covered the issue of arbitrability). The question is whether they did so in this case, which is itself a question of contract interpretation governed by Florida law.

The only case this court has found considering the question under Florida law holds that a general choice-of-law provision does not displace federal law on the issue of arbitrability. Paul Davis Sys., Inc. v. Paul W. Davis Sys., Inc., No. 98 C 2027, 1998 U.S. Dist. LEXIS 16912, at *7 (N.D.Ill. Oct.15, 1998). Applying Illinois and New York law, the United States Supreme Court has reached the same conclusion. Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 60 n. 4, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995); id. at 71-72 (Thomas, J., dissenting). This court believes that Florida courts would follow suit. The normal purpose of general choice-of-law clauses “is to determine that the law of one State rather than that of another State will be applicable; they simply do not speak to any interaction between state and federal law.” Volt Info., 489 U.S. at 488 (Brennan, J., dissenting). Moreover, because “the laws of the State of Florida ” include federal laws under settled principles of supremacy, the literal language of the contract gives no indication of any intent to exclude application of the Federal Arbitration Act. Id. at 490-91. Finally, Florida courts, like federal courts, read contractual ambiguity in favor of arbitration. Paul Davis, 1998 U.S. Dist. LEXIS 16912, at *7 (citing Ronbeck Constr. Co. v. Savanna Club Corp., 592 So.2d 344, 346 (Fla.App.1992)). At most, the choice-of-law provision creates some uncertainty as to which body of law governs arbitrability; uncertainty must be resolved in favor of arbitration. Thus, this court holds that the arbitration provisions in the present contracts are governed by federal, not Florida , law and that plaintiffs' reliance on FastFunding is therefore misplaced. See Buckeye Check Cashing, Inc. v. Cardegna, No. 4D01-3549, 2002 Fla.App. LEXIS 10336, at *3-4 (Fla.Dist.Ct.App. July 24, 2002) (distinguishing FastFunding where the contract provided that federal law would govern arbitrability).

3. Class Action Prohibition

*9 [10] Plaintiffs' next argument is based on the contractual provision prohibiting plaintiffs' participation in any class action. This prohibition renders the arbitration clause unenforceable because, according to plaintiffs, it constitutes an impermissible waiver of a “protection provided by” or a “right of the consumer under” the CROA. 15 U.S.C. § 1679f(a). Plaintiffs cite no case law in support of this theory. This court's own research has failed to reveal any judicial decision directly addressing the question of whether the CROA renders void an arbitration clause that prohibits class actions. Nonetheless, it is clear that plaintiffs' argument fails. The burden of showing that Congress intended to preclude arbitration for a statutory claim rests with the party who seeks to avoid arbitration. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991). “If such an intention exists, it will be discoverable in the text of the [statute], its legislative history, or an ‘inherent conflict’ between arbitration and the [statute]'s underlying purposes.” Id. Any doubts as to Congress's intent are to be resolved in favor of arbitrability. Id.

Plaintiffs here rely solely on the statutory text. As a general matter, the right to bring a class action in federal court is a procedural right created by Rule 23 of the Federal Rules of Civil Procedure. The only references to class actions in the CROA concern the calculation of punitive damages. 15 U.S.C. §§ 1679g(a)(2)(B), (b)(4). These provisions do not create a substantive right to bring a class action, so agreeing in an arbitration clause to forego the class action mechanism does not amount to a waiver of a protection provided by or statutory right under the CROA. Cf. Johnson v. W. Suburban Bank, 225 F.3d 366, 371 (3d Cir.2000) (reaching the same result with respect to a Truth-in-Lending Act (“TILA”) claim); Lopez v. Plaza Fin. Co., 1996 U.S. Dist. LEXIS 5566, No. 95-C-7567, 1996 U.S. Dist. LEXIS 5566, at *7 (N.D.Ill. Apr. 25, 1996) (“Congress has not created a statutory right to bring class actions under [the] TILA”).

4. Prohibitive Expenses

[11] Plaintiffs' final argument against arbitration is their strongest. The United States Supreme Court has recognized that “the existence of large arbitration costs could preclude a litigant ... from effectively vindicating her federal statutory rights in the arbitral forum.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 90, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). “[W]here ... a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs.” Id. at 92. Plaintiffs attempt to meet this burden. Arbitration, plaintiffs' claim, would proceed under the American Arbitration Association's Commercial Dispute Resolution Procedures and would cost in excess of $4000 per plaintiff, not including the costs of renting a room, traveling to Florida , or reimbursing the arbitrator for time spent on pre-hearing matters. Plaintiffs point out that the arbitration agreements do not provide for the splitting of costs between the parties. Plaintiffs reason that “common sense” suggests that such expenses would be prohibitive for consumers, like them, who sought credit repair services precisely because they were in debt. (Resp. at 13.)

*10 Defendants make only two points in reply. First, citing Green Tree, they argue that because the agreements are silent as to who will bear the costs of arbitration, plaintiffs have failed to show that they will be required to do so. Second, defendants assert that plaintiffs will not need to travel to Florida given the technology available for video and voice communication. Plaintiffs have stated that they want to testify in person as to the oral promises and affirmations of fact underlying their claims. This does not seem like an unreasonable decision. Defendants offer no explanation as to why they should be able to dictate the method by which plaintiffs' evidence is presented. But even setting aside reasonable travel expenses, plaintiffs have shown a real likelihood that they will not be able to afford to arbitrate their claims.

The starting point, as both sides recognize, is Green Tree. There, the Court found that “[t]he record reveals only the arbitration agreement's silence on the subject [of whether claimaint would bear the costs], and that fact alone is plainly insufficient to render it enforceable.” Id. at 91. The Court specifically declined to reach the question of how detailed the initial showing of prohibitive expense would need to be before the burden of production shifted to the proponent of arbitration because “in this case neither during discovery nor when the case was presented on the merits was there any timely showing at all on the point.” Id. at 92. Green Tree is easily distinguishable from the case at bar.

Even at this relatively early stage of litigation, plaintiffs here have done much more than merely point to the absence of contractual language concerning arbitration costs. Although plaintiffs do not state exactly what portion of the $4000 estimate (unchallenged by defendants) they are likely to bear, the figure is easily calculable. Plaintiffs state that the filing fee will be $750 each, as compared with the single $150 fee for filing in federal court. This initial fee apparently will be born entirely by plaintiffs. Defendants do not object to plaintiffs' reliance on either a two-days-per-plaintiff hearing duration or a $1800-per-day arbitrator's fee, so the court accepts as an accurate estimate $3600 per plaintiff in arbitrator's fees. According to a recent case cited by plaintiffs, “[t]he AAA's Commercial Rules provide that the arbitrator's fees ..., travel expenses, rental of a hearing room, and other costs are borne equally by the parties, absent some agreement between the parties ... or a different division made at the discretion of the arbitrator.” Phillips v. Assocs. Home Equity Servs., 179 F.Supp.2d 840, 846 (N.D.Ill.2001). Hence, even excluding one half of travel expenses (or video conferencing costs) and rental fees, it is uncontested that arbitration presumptively will cost each plaintiff $2550 (the $750 filing fee plus half of the $3600 arbitrator's fee). This is seventeen times the cost of proceeding in district court. Although one might have preferred affidavits from plaintiffs stating that this amount was prohibitive, defendants do not take issue with the view that individuals, like plaintiffs, with debt problems are unable to afford such costs. Cf. Giordano v. Pep Boys-Manny, Moe & Jack, Inc., No. 99-1281, 2001 U.S. Dist. LEXIS 5433, at *24 (E.D.Pa. Mar. 29, 2001) (“[N]othing in Green Tree requires courts to undertake detailed analyses of the household budgets of low-level employees to conclude that arbitration costs in the thousands of dollars deter the vindication of employees' claims in arbitral fora.”). Unlike Green Tree, this case squarely presents the question of whether a party resisting arbitration has made an adequate showing of prohibitive expenses. Although plaintiffs' showing on this point is less than overwhelming, this court believes that it suffices to shift the burden to defendants, who offer in reply only Green Tree and a vague promise of cost-saving technology.

III. Conclusion

*11 This court has subject matter jurisdiction. Because personal jurisdiction over the Law Offices of Dashia Trowers is lacking, however, the claims against that entity (and the putative defendant class represented thereby) are dismissed. So too Dorsey's claims against Goldstar are dismissed for lack of personal jurisdiction. On the other hand, this court finds that Arnold and Sorbo have made out prima facie cases of personal jurisdiction with respect to Goldstar, so the court denies defendants' motion to dismiss the claims of those two plaintiffs against Goldstar. Finally, the court construes defendants' motion to compel arbitration as a motion to stay proceedings pending arbitration and denies the motion because plaintiffs have shown a genuine likelihood that they would incur prohibitive costs in arbitration.

N.D.Ill.,2002.
Arnold v. Goldstar Financial Systems, Inc.
Not Reported in F.Supp.2d, 2002 WL 1941546 (N.D.Ill.)



Cannon v. William Chevrolet/Geo, Inc.
341 Ill.App.3d 674, 794 N.E.2d 843
Ill.App. 1 Dist.,2003.
June 26, 2003 (Approx. 14 pages)

341 Ill.App.3d 674, 794 N.E.2d 843, 276 Ill.Dec. 593, 2003-2 Trade Cases P 74,085
Appellate Court of Illinois ,
First District, Fourth Division.
Kattrina CANNON, Plaintiff-Appellee and Cross-Appellant,
v.
WILLIAM CHEVROLET/GEO, INC., and Firstar Bank Milwaukee , N.A., Defendants-Appellants and Cross-Appellees.
No. 1-01-3332.
June 26, 2003.
Used car purchaser filed lawsuit against car dealership and bank which financed her car purchase for, among other causes, violations of Magnuson-Moss Warranty Federal Trade Commission Improvement Act (Magnuson-Moss Act) and Credit Services Organizations Act, alleging dealership failed to inform her that the vehicle had been in an accident, and raising disclosure issues related to retail installment contract assigned to bank. The Circuit Court, Cook County , Vanessa Hopkins, J., granted judgment in favor of purchaser and awarded attorney fees and costs to her. Dealership and bank appealed, and purchaser cross-appealed. The Appellate Court, Theis, P.J., held that: (1) purchaser's petition for attorney fees under Magnuson-Moss Act was not collateral to underlying action and, thus, notice of appeal filed by dealership and bank within 30 days of resolution of attorney fees claim was timely; (2) dealership's and bank's motions in limine seeking to dismiss purchaser's Magnuson-Moss Act claims of breach of implied warranty of merchantability and revocation of acceptance and recision were not proper vehicle for the relief sought; (3) dealership's failure to inform purchaser that it had obtained financing at lower interest rate than rate disclosed in retail installment contract was not a violation of Credit Services Organizations Act; (4) financing services offered by dealership in connection with purchase of vehicle from dealership did not fall within the purview of Credit Services Organizations Act; (5) award of attorney fees under Magnuson-Moss Act did not depend upon a plaintiff's recovery of substantial monetary damages nor did it need to be proportionate to an award of money damages; (6) reversal of attorney fees award to purchaser and remand for new hearing on attorney fees to allow trial court to reconsider whether purchaser's unsuccessful claims were sufficiently related to successful claims, and whether purchaser achieved level of success making it appropriate to award fees for hours reasonably expended on unsuccessful claim was required; and (7) trial court acted within its discretion in awarding attorney fees to purchaser at hourly billing rates selected by court, rather than at rates claimed by purchaser's attorneys.
Affirmed in part, reversed in part and remanded with directions.
West Headnotes

[1] KeyCite Notes

30 Appeal and Error
30VII Transfer of Cause
30VII(D) Writ of Error, Citation, or Notice
30k428 Filing Notice and Proof of Service
30k428(2) k. Time for Filing. Most Cited Cases

Vehicle purchaser's petition, as prevailing party in lawsuit against dealership and bank, for attorney fees pursuant to Magnuson-Moss Warranty Federal Trade Commission Improvement Act, was not collateral to underlying action and, thus, notice of appeal filed by dealership and bank within 30 days of resolution of attorney fees claim was timely, although purchaser argued that petition for attorney fees was not posttrial motion such as to prevent order disposing of main claims from being appealable; trial court retained jurisdiction to hear claim for fees as part of the judgment under said act. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, § 110(d)(2), 15 U.S.C.A. § 2310(d)(2); Sup.Ct.Rules, Rule 304(a).

[2] KeyCite Notes

30 Appeal and Error
30X Record
30X(J) Defects, Objections, Amendments, and Corrections
30k641 k. Defects in Authentication or Certificate. Most Cited Cases

Appellate court cannot consider an unofficial copy of a portion of the record. Sup.Ct.Rules, Rule 324.

[3] KeyCite Notes

30 Appeal and Error
30X Record
30X(A) Matters to Be Shown
30k497 Grounds of Review
30k497(1) k. In General. Most Cited Cases

The appellant has the burden of presenting a sufficiently complete record of the proceedings at trial to support a claim of error.

[4] KeyCite Notes

30 Appeal and Error
30XVI Review
30XVI(G) Presumptions
30k906 Facts or Evidence Not Shown by Record
30k907 In General
30k907(1) k. In General. Most Cited Cases

In the absence of sufficiently complete record of the proceedings at trial, the reviewing court will presume that the order entered by the trial court was in conformity with the law and had a sufficient factual basis.

[5] KeyCite Notes

307A Pretrial Procedure
307AI In General
307Ak3 k. Motions in Limine; Preclusion of Evidence, Argument, or Reference. Most Cited Cases

Car dealer's and bank's motions in limine seeking to dismiss car purchaser's Magnuson-Moss Warranty Federal Trade Commission Improvement Act claims of breach of implied warranty of merchantability and revocation of acceptance and recision were not proper vehicle for the relief sought, where, with regard to motion in limine on issue of recision, dealer and bank sought ruling on election of remedies, rather than a ruling on evidentiary matter, and another motion sought to bar purchaser from mentioning that she was refused any repairs, also a dispositive, rather than evidentiary, matter.

[6] KeyCite Notes

307A Pretrial Procedure
307AI In General
307Ak3 k. Motions in Limine; Preclusion of Evidence, Argument, or Reference. Most Cited Cases

Motions in limine are not designed to obtain rulings on dispositive matters but, rather, are designed to obtain rulings on evidentiary matters outside the presence of the jury.

[7] KeyCite Notes

307A Pretrial Procedure
307AI In General
307Ak3 k. Motions in Limine; Preclusion of Evidence, Argument, or Reference. Most Cited Cases

It is improper to file a dispositive motion seeking the dismissal of a claim as a motion in limine where it forecloses the opportunity of the opposing party to adequately respond to the motion.

[8] KeyCite Notes

30 Appeal and Error
30V Presentation and Reservation in Lower Court of Grounds of Review
30V(B) Objections and Motions, and Rulings Thereon
30k214 Instructions
30k215 Objections in General
30k215(1) k. Necessity of Objection in General. Most Cited Cases

30 Appeal and Error KeyCite Notes
30V Presentation and Reservation in Lower Court of Grounds of Review
30V(B) Objections and Motions, and Rulings Thereon
30k242 Necessity of Ruling on Objection or Motion
30k242(5) k. Reservation of Rulings. Most Cited Cases

30 Appeal and Error KeyCite Notes
30V Presentation and Reservation in Lower Court of Grounds of Review
30V(D) Motions for New Trial
30k286 k. Review of Rulings or Orders Before Trial or Hearing. Most Cited Cases

Car dealership and bank, as defendants in lawsuit brought by used car purchaser, waived on appeal claim that trial court erred in denying their motions in limine seeking to dismiss purchaser's Magnuson-Moss Warranty Federal Trade Commission Improvement Act claims on basis of alleged failure by purchaser to give notice and opportunity to cure, where, after court reserved ruling on motions, defendants never sought a ruling, court denied their motions for directed verdict on issue of notice, they did not object to jury instructions on issue of notice, and they did not file posttrial motions. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, § 110(e), 15 U.S.C.A. § 2310(e).

[9] KeyCite Notes

307A Pretrial Procedure
307AI In General
307Ak3 k. Motions in Limine; Preclusion of Evidence, Argument, or Reference. Most Cited Cases

When a motion in limine is made, the trial judge has broad discretion to grant or deny the motion or choose not to entertain the motion at all.

[10] KeyCite Notes

92B Consumer Credit
92BI In General
92Bk3 License and Regulation in General
92Bk4 k. Particular Businesses or Transactions. Most Cited Cases

Car dealership's failure to inform car purchaser that it had obtained financing at lower interest rate than rate disclosed in retail installment contract was not a violation of Credit Services Organizations Act, where dealership did not receive valuable consideration specifically for credit services performed in procuring financing; without evidence of such consideration, financing transaction was not regulated under act and dealership could not be considered a credit services organization. S.H.A. 815 ILCS 605/1 et seq.

[11] KeyCite Notes

92B Consumer Credit
92BI In General
92Bk3 License and Regulation in General
92Bk4 k. Particular Businesses or Transactions. Most Cited Cases

The Credit Services Organizations Act is not intended to regulate retailers primarily engaged in the business of selling goods and services to their customers; goods and services provided by retailers are not generally services aimed at improving the consumer's credit or obtaining an extension of credit for the consumer, otherwise unattainable because of the consumer's poor credit history or rating. S.H.A. 815 ILCS 605/1 et seq.

[12] KeyCite Notes

92B Consumer Credit
92BI In General
92Bk3 License and Regulation in General
92Bk4 k. Particular Businesses or Transactions. Most Cited Cases

Financing services offered by car dealership in connection with purchase of vehicle from dealership did not fall within the purview of Credit Services Organizations Act; dealership was primarily in the business of selling and leasing cars, not primarily in the business of obtaining extensions of credit otherwise unattainable because of a consumer's poor credit history or rating, and, accordingly, legislature did not intend to include retailers, such as car dealerships, within the purview of act. S.H.A. 815 ILCS 605/2.

[13] KeyCite Notes

30 Appeal and Error
30X Record
30X(J) Defects, Objections, Amendments, and Corrections
30k635 Effect of Omissions
30k635(1) k. In General. Most Cited Cases

Car dealership and bank, as defendants in lawsuit brought by used car purchaser for, among other causes, violations of Magnuson-Moss Warranty Federal Trade Commission Improvement Act (Magnuson-Moss Act) and Credit Services Organizations Act, waived on appeal claims regarding reasonableness of attorney fees awarded by trial court to purchaser under Magnuson-Moss Act, where defendants failed to make transcript of hearing on attorney fees part of record on appeal. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, § 110(d)(2), 15 U.S.C.A. § 2310(d)(2).

[14] KeyCite Notes

102 Costs
102VIII Attorney Fees
102k194.10 k. In General. Most Cited Cases

115 Damages KeyCite Notes
115III Grounds and Subjects of Compensatory Damages
115III(A) Direct or Remote, Contingent, or Prospective Consequences or Losses
115III(A)1 In General
115k15 k. Nature and Theory of Compensation. Most Cited Cases

Damages are designed to compensate a plaintiff for his or her loss and injury, whereas the purpose of awarding attorney fees is to provide potential litigants with access to legal assistance so that they might pursue a remedy for their injuries or loss.

[15] KeyCite Notes

29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(E) Enforcement and Remedies
29TIII(E)7 Relief
29Tk395 Costs
29Tk397 k. Attorney Fees. Most Cited Cases
(Formerly 92Hk42 Consumer Protection)

Award of attorney fees under Magnuson-Moss Warranty Federal Trade Commission Improvement Act does not depend upon a plaintiff's recovery of substantial monetary damages nor does it need to be proportionate to an award of money damages. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, § 110(d)(2), 15 U.S.C.A. § 2310(d)(2).

[16] KeyCite Notes

102 Costs
102VIII Attorney Fees
102k194.18 k. Items and Amount; Hours; Rate. Most Cited Cases

When plaintiff fails to prevail on claims that are distinct in all respects from the prevailing claims, the hours spent on unsuccessful claims may be excluded in considering the amount of reasonable attorney fees; however, when lawsuit cannot be viewed as a series of discrete claims, court must evaluate whether the claims (1) involved a common core of facts or related legal theories, and (2) whether the plaintiff achieved a level of success making it appropriate to award attorney fees for hours reasonably expended on the unsuccessful claims as well.

[17] KeyCite Notes

30 Appeal and Error
30XVII Determination and Disposition of Cause
30XVII(D) Reversal
30k1172 Reversal in Part
30k1172(5) k. As to Damages and Costs. Most Cited Cases

Reversal in part of trial court's judgment, in lawsuit by used car purchaser against dealership and bank for, among other causes, violations of Magnuson-Moss Warranty Federal Trade Commission Improvement Act and Credit Services Organizations Act, required reversal of attorney fees award to purchaser and remand for new hearing on attorney fees to allow trial court to reconsider whether purchaser's unsuccessful claims were sufficiently related to successful claims, and whether purchaser achieved level of success making it appropriate to award fees for hours reasonably expended on unsuccessful claims. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, § 110(d)(2), 15 U.S.C.A. § 2310(d)(2).

[18] KeyCite Notes

29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(E) Enforcement and Remedies
29TIII(E)7 Relief
29Tk395 Costs
29Tk398 k. Proceedings to Impose; Evidence. Most Cited Cases
(Formerly 92Hk42 Consumer Protection)

Trial court acted within its discretion, in lawsuit by used car purchaser against dealership and bank for, among other causes, violations of Magnuson-Moss Warranty Federal Trade Commission Improvement Act, in awarding attorney fees to purchaser at hourly billing rates selected by court, rather than at rates claimed by purchaser's attorneys, where attorneys did not submit any affidavits or testimony on rates from other counsel practicing in same market, and defendants presented evidence supporting rates selected by court. Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, § 110(d)(2), 15 U.S.C.A. § 2310(d)(2).

**846 ***596 *677
Ira M. Levin, Corie E. Schafer, Burke, Warren, MacKay & Serritella, P.C., for Appellants.
Andy Norman, Mauck & Baker, Chicago, for Appellee.

Presiding Justice THEIS delivered the opinion of the court:
Defendants, William Chevrolet/Geo, Inc. (William Chevrolet), and Firstar Bank Milwaukee, N.A. (Firstar Bank), appeal from the trial court's order of January 12, 2001, granting judgment in favor of plaintiff, Kattrina Cannon, for violations of the Magnuson-Moss Warranty Federal Trade Commission Improvement Act (Magnuson-Moss Act or Act) (15 U.S.C. § 2310(d) (2000)), and violations of the Credit Services Organizations Act (Credit Services Act) (815 ILCS 605/1 et seq. (West 1998)). Additionally, defendants appeal from the award of attorney fees and costs entered on August 24, 2001.

*678 Defendants contend that (1) the trial court erred in failing to dismiss Cannon's Magnuson-Moss Act claims for Cannon's failure to comply with the notice provisions of the Act; (2) the trial court erred in allowing Cannon to amend her complaint to add a cause of action under the Credit Services Act where William Chevrolet is not a credit service organization; (3) the trial court erred in finding that William Chevrolet committed interest rate fraud in violation of the Credit Services Act; and (4) the trial court abused its discretion in awarding attorney fees and costs. On cross-appeal, Cannon contends that the trial court erred in selecting a reasonable hourly rate in calculating the award of attorney fees. For the following reasons, we affirm in part, reverse in part and remand with directions.

BACKGROUND

In January 1999, Cannon filed a lawsuit against William Chevrolet and Firstar Bank, in connection with her purchase of a used 1998 Nissan Sentra. Therein, she alleged in her complaint that William Chevrolet failed to disclose that the vehicle had been in an accident. She later amended the complaint to raise additional disclosure issues relating to her retail installment contract assigned to Firstar Bank. She sought recovery under various legal theories, including the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (**847 ***597 815 ILCS 505/1 et seq. (West 1998)) (count I), common law fraud (count II), violations of the Magnuson Moss Act (15 U.S.C. § 2310(d) (2000)), including breach of the implied warranty of merchantability (count III), breach of the service contract (count IV), and revocation of acceptance and rescission (count V), and violations of the Credit Services Act (815 ILCS 605/1 et seq. (West 1998)) (count VI). Cannon also sought to recover her costs and attorney fees. The matter proceeded to mandatory arbitration at which time Cannon was awarded $24,933.92. The award was rejected by defendants and the case was assigned to the trial calendar.

After a bifurcated bench and jury trial, on January 12, 2001, the trial court entered judgment on the jury's verdict in favor of Cannon for $34,130.82 on her Magnuson-Moss Act claims (count III, breach of implied warranty, and count V, revocation of acceptance and rescission), and entered judgment on the jury's verdict in favor of William Chevrolet on the common law fraud claim (count II). Additionally, the trial court entered judgment, based upon its findings of fact, in favor of Cannon for $471 under the Credit Services Act (count VI), and for William Chevrolet under the Consumer Fraud Act (count I). Firstar Bank, as assignee of the retail installment contract, was held jointly and severally liable for $10,807.96, the amount of money Cannon had *679 paid under the retail installment contract. Thereafter, Cannon filed several posttrial motions and a petition for statutory attorney fees and costs. On August 24, 2001, after an evidentiary hearing, the trial court awarded attorney fees, costs, and expenses to Cannon's attorneys, totalling $70,115.20.

ANALYSIS

Jurisdiction

[1] Initially, Cannon filed a motion, taken with the case, contending that we lack jurisdiction to address the arguments on appeal relating to the order of January 12, 2001, where the notice of appeal was filed on September 10, 2001, more than 30 days after the last pending posttrial motion was resolved by the trial court. Cannon specifically argues that the last posttrial motion was resolved by the order of July 6, 2001, and that the petition for attorney fees, which was not resolved until August 24, 2001, was not a posttrial motion such as to prevent the January 12 order, disposing of the main claims, from being appealable, citing Servio v. Paul Roberts Auto Sales, Inc., 211 Ill.App.3d 751, 156 Ill.Dec. 186, 570 N.E.2d 662 (1991), in support.

In Servio, the appellate court determined that a postjudgment petition for attorney fees under section 10(a)(c) of the Consumer Fraud Act was collateral to the underlying action and therefore did not affect the finality or appealability of the judgment in the principal action. Servio, 211 Ill.App.3d at 760-61, 156 Ill.Dec. 186, 570 N.E.2d at 667-68.

This case is distinguishable from Servio. Here, Cannon's complaint contained a claim for attorney fees pursuant to the Magnuson-Moss Act under which she was the prevailing party. Section 2310(d)(2) of the Act specifically provides:

“If a consumer finally prevails * * *, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys' fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys' fees would be inappropriate.” (Emphasis added.) 15 U.S.C. § 2310(d)(2) (2000)

**848 ***598 Thus, where the trial court retained jurisdiction to hear the claim for fees “as part of the judgment,” it was not collateral to the underlying action. Any other judgment entered in the case before the claim for fees was ruled upon became nonfinal and nonappealable when the claim for fees was made, unless the prior judgment contained the language set forth in Supreme Court Rule 304(a) (155 Ill.2d R. *680 304(a)) that there was no just reason to delay enforcement or appeal. Dewan v. Ford Motor Co., No. 1-01-3259, 2002 WL 31834629 (December 18, 2002); F.H. Prince & Co. v. Towers Financial Corp., 266 Ill.App.3d 977, 983-84, 203 Ill.Dec. 940, 640 N.E.2d 1313, 1317 (1994).

Here, the order of January 12, 2001, did not resolve the claim for attorney fees or contain a finding pursuant to Rule 304(a) that there was no just reason to delay enforcement or appeal. Therefore, in the absence of a Rule 304(a) finding, the January 12, 2001, order, even if final, remained unappealable until the resolution of Cannon's claim for attorney fees on August 24, 2001. F.H. Prince, 266 Ill.App.3d at 983-84, 203 Ill.Dec. 940, 640 N.E.2d at 1317. Consequently, the notice of appeal filed on September 10, 2001, within 30 days after resolution of the attorney fee claim, was timely, providing this court with jurisdiction.

Magnuson-Moss Act Claims

We next address defendants' contention that the trial court erred in denying their motions in limine seeking to dismiss the Magnuson-Moss Act claims of breach of implied warranty of merchantability and revocation of acceptance and rescission. Defendants argue that Cannon failed to comply with the requisite notice requirements of the Act and therefore the trial court should have granted the motions in limine as a matter of law. Pursuant to section 2310(e) of the Magnuson-Moss Act, no action may be brought for failure to comply with any obligation under any written or implied warranty unless the person obligated under the warranty is afforded reasonable notice and opportunity to cure such failure to comply. 15 U.S.C. § 2310(e) (2000); Belfour v. Schaumburg Auto, 306 Ill.App.3d 234, 241, 239 Ill.Dec. 383, 713 N.E.2d 1233, 1238 (1999).

Cannon's complaint alleged that William Chevrolet was served with notice of its violations of the law and that the dealership was aware of the condition of the vehicle prior to any cause of action being brought. According to the record on appeal, no motion to dismiss or motion for summary judgment was ever filed in connection with the adequacy of those allegations pertaining to the notice requirement under the Magnuson-Moss Act. Nor do defendants argue on appeal that the allegations in the complaint were deficient. On the first day of trial, William Chevrolet filed motions in limine relating to the Magnuson-Moss Act claims.

[2] [3] [4] Initially, we note that neither motion stating the requested relief has been made part of the record on appeal. An unofficial copy of the motions without a file stamp has been provided in the appendix to the brief. This court cannot consider an unofficial copy of a portion of the record. Anderson v. Village of Forest Park, 238 Ill.App.3d 83, 90, 179 Ill.Dec. 373, 606 N.E.2d 205, 210 (1992), citing Supreme Court Rule 324 (155 Ill.2d R. 324) (the clerk shall *681 prepare and certify the record on appeal). The appellant has the burden of presenting a sufficiently complete record of the proceedings at trial to support a claim of error. Foutch v. O'Bryant, 99 Ill.2d 389, 391-92, 76 Ill.Dec. 823, 459 N.E.2d 958, 959 (1984). In the absence of such a record the reviewing court will presume that the order entered **849 ***599 by the trial court was in conformity with the law and had a sufficient factual basis. Foutch, 99 Ill.2d at 392, 76 Ill.Dec. 823, 459 N.E.2d at 959.

[5] [6] [7] Even were we to consider whether the trial court correctly ruled on the motions in limine, we find that defendants' arguments lack merit. One of defendants' motions sought to bar Cannon from mentioning at trial that she was refused any repairs on her vehicle because she failed to give proper notice of her warranty claims. While they argue that the trial court should have dismissed the claims at the motion in limine stage as a matter of law, defendants misunderstand the purpose of such a motion. Motions in limine are not designed to obtain rulings on dispositive matters but, rather, are designed to obtain rulings on evidentiary matters outside the presence of the jury. People v. Owen, 299 Ill.App.3d 818, 822, 233 Ill.Dec. 900, 701 N.E.2d 1174, 1177 (1998). It is improper to file a dispositive motion seeking the dismissal of a claim as a motion in limine where it forecloses the opportunity of the opposing party to adequately respond to the motion. See Silverstein v. Brander, 317 Ill.App.3d 1000, 1005-06, 251 Ill.Dec. 276, 740 N.E.2d 357, 361 (2000). Additionally, with regard to the motion in limine on the issue of rescission, defendants sought a ruling on an election of remedies, arguing inconsistent jury instructions, rather than a ruling on an evidentiary matter. Accordingly, the motions were not the proper vehicle for the relief sought by defendants.

[8] [9] Furthermore, when a motion in limine is made, the trial judge has broad discretion to grant or deny the motion or choose not to entertain the motion at all. Schuler v. Mid-Central Cardiology, 313 Ill.App.3d 326, 334, 246 Ill.Dec. 163, 729 N.E.2d 536, 543 (2000). The motion pertaining to notice was unsubstantiated with any evidence that Cannon failed to provide proper notice. On appeal, defendants cite to Cannon's deposition testimony as evidence in support of their contention. However, that evidence was not presented to the trial court during the hearing on the motion in limine. The trial court therefore properly reserved its ruling on the motion to allow Cannon an opportunity to present her evidence of notice to the jury as a question of fact. The court specifically stated that “if there's no substantive evidence to set forth that there has been any notice that can be substantiated in any form then this will be granted. If not, it will be denied.”

Subsequently, defendants never sought a ruling on the motions in limine, the trial judge then denied the motion for a directed verdict on *682 the notice issue, and after the close of the evidence, jury instructions were given, including instructions on the issue of notice and remedies. Defendants did not object to the jury instructions on notice, nor do they argue that the instructions were improper on appeal. Additionally, defendants failed to file a posttrial motion. Pursuant to section 2-1202(a) of the Illinois Code of Civil Procedure (735 ILCS 5/2-1202 (West 2000)), if the court denies a motion for directed verdict, the motion is waived unless the request is renewed in a posttrial motion. Accordingly, to the extent that defendants argue the insufficiency of the evidence presented at trial to support adequate notice and an opportunity to cure, they have waived such contention on appeal and we decline to review it. For all of the foregoing reasons, we affirm the decision of the trial court on the Magnuson-Moss Act claims.

Credit Services Act

We next address William Chevrolet's argument that the trial court erred in denying its motion for summary judgment on count VI of the amended complaint, alleging**850 ***600 violations of the Credit Services Act. Summary judgment is appropriate when “the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West 2000); Sollami v. Eaton, 201 Ill.2d 1, 6-7, 265 Ill.Dec. 177, 772 N.E.2d 215, 218 (2002). Our review of the circuit court's judgment is de novo. Sollami, 201 Ill.2d at 7, 265 Ill.Dec. 177, 772 N.E.2d at 218.

[10] The following undisputed facts were presented on the motion for summary judgment. When Cannon entered into the transaction to purchase the used 1998 Nissan Sentra, William Chevrolet agreed to arrange for an extension of credit to finance a portion of the purchase price of the used vehicle. Cannon signed a retail installment contract with a disclosed annual percentage rate of 11.95%. Subsequently, William Chevrolet obtained financing from Firstar Bank at a lower annual percentage rate of 7.39%, which was not disclosed to Cannon. Cannon claimed that William Chevrolet had concealed the lower interest rate she could have received, and claimed that failure to disclose the actual rate obtained by the bank was a violation of the Credit Services Act. The trial court denied William Chevrolet's motion for summary judgment and ultimately granted Cannon damages for a violation of the Credit Services Act.

William Chevrolet argues that it is not a credit services organization as defined by the Credit Services Act, and that the legislature did not intend to regulate the transaction at issue. Therefore, it concludes that it cannot be held liable. Relying on section 3 of the Credit Services Act, Cannon maintains that William Chevrolet is a credit services *683 organization by virtue of its agreeing to assist her in obtaining an extension of credit, in indeed obtaining the credit, and by receiving consideration for its services “ as part of the overall transaction.”

Section 3 of the Credit Services Act provides in pertinent part:

“(a) ‘Buyer’ means an individual who is solicited to purchase or who purchases the services of a credit services organization.

* * *

(d) ‘Credit Services Organization’ means a person who, with respect to the extension of credit by others and in return for the payment of money or other valuable consideration, provides, or represents that the person can or will provide, any of the following services:

(i) improving a buyer's credit record, history, or rating[;]

(ii) obtaining an extension of credit for a buyer; or

(iii) providing advice or assistance to a buyer with regard to either subsection (i) or (ii).” 815 ILCS 605/3(a), (d) (West 1998).

Recently, our supreme court addressed a similar question in determining whether the Credit Services Act applied to a transaction between a retailer and a homeowner in Midstate Siding and Window Co. v. Rogers, 204 Ill.2d 314, 273 Ill.Dec. 816, 789 N.E.2d 1248 (2003). There, a home remodeling contractor entered into an agreement to assist homeowners in obtaining financing in connection with the contractor's installation of windows and siding at their home. The contractor filed suit to enforce the agreement, and the homeowners counterclaimed, alleging that the agreement was void under the Credit Services Act. Midstate Siding, 204 Ill.2d at 316, 273 Ill.Dec. 816, 789 N.E.2d 1248. In determining that the Act did not apply to **851 ***601 the transaction at issue, the court analyzed the definition of a credit services organization pursuant to section 3 of the Act, and the legislative purpose behind the Credit Services Act.

The supreme court rejected Cannon's argument that she was required to show only that William Chevrolet received consideration “as part of the overall transaction.” Rather, the court held that in examining the definition of a buyer and a credit services organization, the Credit Services Act only regulates transactions involving the payment of money or other valuable consideration in return for the services of the credit services organization. Midstate Siding, 204 Ill.2d at 322, 273 Ill.Dec. 816, 789 N.E.2d 1248. Therefore, “the Credit Services Act requires payment for credit services, not simply payment for other goods or services.” Midstate Siding, 204 Ill.2d at 322, 273 Ill.Dec. 816, 789 N.E.2d 1248. Accordingly, where the contract in Midstate Siding did not provide for payment of money or valuable consideration for credit services, but rather for the payment of windows and siding to be installed, there was inadequate consideration to support a contract for credit services. Midstate Siding, 204 Ill.2d at 322, 273 Ill.Dec. 816, 789 N.E.2d 1248.

*684 Similarly, here, we must determine whether William Chevrolet performed the credit services “in return for the payment of money or other valuable consideration.” While it is undisputed that William Chevrolet assisted her in obtaining financing for her automobile purchase, and indeed obtained a loan commitment from the bank, Cannon, as the buyer, must show that she gave valuable consideration specifically for the credit services performed and not simply for other goods or services.

Here, there was no evidence presented in the record to support Cannon's argument that she paid a fee or gave other valuable consideration relating solely to the efforts made in obtaining the extension of credit. Rather, the evidence was that Cannon made a cash down payment for the car in the amount of $500, traded in her vehicle with a net trade value of $3,752.62, and paid a document service fee of $46.88 as part of the overall transaction to purchase the car. There was no evidence that Cannon transferred money or its equivalent to the dealership specifically for credit services. Accordingly, without evidence of such consideration, the transaction was not one regulated under the Credit Services Act and William Chevrolet cannot be considered a credit service organization.

[11] [12] In addition, we find that Cannon's interpretation is not consistent with the stated purpose of the Credit Services Act. Section 2 provides in pertinent part:

“(a) The ability to obtain and use credit has become of great importance to consumers who have a vital interest in establishing and maintaining their credit worthiness and credit standing. As a result, consumers who have experienced credit problems may seek assistance from credit service businesses which offer to improve the credit standing of such consumers. Certain advertising and business practices of some companies engaged in the business of credit services have worked a financial hardship upon the people of this State, often on those who are of limited economic means and inexperienced in credit matters.

(b) The purpose of this Act is to provide prospective consumers of credit services companies with the information necessary to make an informed decision regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices.” 815 ILCS 605/2 (West 1998).

**852 ***602 Thus, the Credit Services Act is aimed at remedying problems encountered by consumers who have poor credit and seek to establish and maintain credit worthiness and credit standing. As stated by our supreme court in Midstate Siding:

“[T]he Credit Services Act is not intended to regulate retailers primarily engaged in the business of selling goods and services to *685 their customers. The goods and services provided by retailers are not generally services aimed at improving the consumer's credit or obtaining an extension of credit for the consumer, otherwise unattainable because of the consumer's poor credit history or rating.” Midstate Siding, 204 Ill.2d at 324, 273 Ill.Dec. 816, 789 N.E.2d 1248, citing Fogle v. William Chevrolet/Geo, Inc., No. 99-C-5960, 2000 WL 1129983 (N.D.Ill. August 9, 2000) (mem. op.).

Here, William Chevrolet is a car dealership primarily in the business of selling and leasing cars, not primarily in the business of obtaining extensions of credit otherwise unattainable because of a consumer's poor credit history or rating. Accordingly, the legislature did not intend to include retailers, such as car dealerships, within the purview of this particular act. Consequently, we must reverse that part of the trial court's judgment granting Cannon $471 for a violation of the Credit Services Act.

Attorney Fees

We next consider defendants' arguments relating to the reasonableness of the attorney fee award. It contends that the award of fees and costs was excessive because (1) it was not commensurate with the results obtained; (2) Cannon's petition failed to delineate time spent among her different claims; and (3) time related to claims on which Cannon was unsuccessful should have been excluded. The plain language of section 2310(d)(2) of the Magnuson-Moss Act provides that an award of attorney fees to a prevailing plaintiff is within the sound discretion of the trial court and will not be disturbed on review absent an abuse of discretion. 15 U.S.C. § 2310(d)(2) (2000); Vieweg v. Friedman, 173 Ill.App.3d 471, 475, 122 Ill.Dec. 105, 526 N.E.2d 364, 367 (1988).

[13] Here, there was an evidentiary hearing at which the court considered the affidavits of counsel, the petitions of the attorneys, and the testimony presented by both sides. The trial judge indicated that she would enter and continue her ruling to make a determination “based upon a finding of whether or not the fees are reasonable and necessary what should be appropriately entered based on the services rendered.” A transcript of the trial court's findings has not been made a part of the record on appeal. Without the transcript, we are unable to discern the trial court's reasoning and whether it abused its discretion. As stated previously, the appellant has the burden of presenting a sufficiently complete record of the proceedings at trial to support a claim of error. Foutch, 99 Ill.2d at 391-92, 76 Ill.Dec. 823, 459 N.E.2d at 959. In the absence of such a record, the reviewing court will presume that the order entered by the trial court was in conformity with the law and had a sufficient factual basis. Foutch, 99 Ill.2d at 392, 76 Ill.Dec. 823, 459 N.E.2d at 959. Accordingly, to the extent that defendants argue the reasonableness*686 of the fees awarded, they have waived those contentions for review.

[14] We further reject defendants' argument that the award is excessive because it is not commensurate with the damages awarded. They have cited no authority and we have found none to suggest that an award of attorney fees must be proportionate to the damages awarded. Nor was this a case where Cannon recovered**853 ***603 only nominal damages. Here, Cannon recovered a substantial portion of the damages she requested. Furthermore, we note that under section 2310(d)(2) of the Magnuson-Moss Act (15 U.S.C. § 2310(d)(2) (2000)), attorney fees are not related to the damages awarded. “Damages are designed to compensate a plaintiff for his loss and injury, whereas the purpose of awarding attorney fees under [the Act] is to provide potential litigants with access to legal assistance so that they might pursue a remedy for their injuries or loss.” Vieweg, 173 Ill.App.3d at 476, 122 Ill.Dec. 105, 526 N.E.2d at 368.

[15] The statute specifically refers to attorney fees “based on actual time expended.” In addressing this phrase, Congress has explained that “an attorney's fee is to be based upon actual time expended rather than being tied to any percentage of the recovery. This requirement is designed to make the pursuit of consumers rights involving inexpensive consumer products economically feasible.” S.Rep. No. 93-151, 1st Sess. at pp. 23-24 (1973). Thus, the award of attorney fees does not depend upon a plaintiff's recovery of substantial monetary damages nor does it need to be proportionate to an award of money damages. See Berlak v. Villa Scalabrini Home for the Aged, Inc., 284 Ill.App.3d 231, 237-38, 219 Ill.Dec. 601, 671 N.E.2d 768, 772 (1996). It is for the trial court to determine a reasonable fee, if any, in light of the particular facts and circumstances of each case. We will not substitute our judgment for that of the trial court, especially here, where we have no transcript of the trial court's findings.

[16] Defendants further argue that an attorney must differentiate which part of his work was performed on each count of the complaint, and that he may only recover his fees for those claims on which he prevails, but not on the other claims that were dismissed. The United States Supreme Court has previously addressed this issue in the context of other federal fee-shifting statutes. In Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), the Court, in considering statutory attorney fees under a federal civil rights claim, held that when the plaintiff fails to prevail on claims that are distinct in all respects from the prevailing claims, the hours spent on unsuccessful claims may be excluded in considering the amount of reasonable attorney fees. However, the Court further explained that:

*687 “In [some] cases the plaintiff's claims for relief will involve a common core of facts or will be based on related legal theories. Much of counsel's time will be devoted generally to the litigation as a whole, making it difficult to divide the hours expended on a claim-by-claim basis. Such a lawsuit cannot be viewed as a series of discrete claims. Instead [the court] should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation.” Hensley, 461 U.S. at 435, 103 S.Ct. at 1940, 76 L.Ed.2d at 51-52.

Thus, the court must evaluate whether the claims (1) involved a common core of facts or related legal theories and (2) whether the plaintiff achieved a level of success making it appropriate to award attorney fees for hours reasonably expended on the unsuccessful claims as well. Cress v. Recreation Services, Inc., No. 2-01-1350, 2003 WL 188128 (January 28, 2003) (applying the test in case involving statutory attorney fee provision of Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1001 et seq. (1994))); Berlak, 284 Ill.App.3d at 238, 219 Ill.Dec. 601, 671 N.E.2d at 772-73 (applying a similar***604 analysis in case involving statutory attorney fee provision of Nursing Home **854 Care Act (210 ILCS 45/3-602 (West 1994))).

While we do not disagree with defendants that generally a plaintiff is entitled to only those fees incurred on his or her prevailing claims that allow for attorney fees ( Roche v. Fireside Chrysler-Plymouth, Mazda, Inc., 235 Ill.App.3d 70, 175 Ill.Dec. 760, 600 N.E.2d 1218 (1992); Rubin v. Marshall Field & Co., 232 Ill.App.3d 522, 173 Ill.Dec. 714, 597 N.E.2d 688 (1992)), as stated in Hensley, there are times where the lawsuit cannot be perceived as a series of discrete claims, making it difficult to distinguish the time spent on each claim. We find that the better reasoned approach is to follow the test outlined by the Supreme Court in Hensley in making that determination.

[17] In light of our holding, and because we are reversing the trial court's judgment with respect to the Credit Services Act claim, we remand for a new hearing on the award of attorney fees to allow the trial court to reconsider whether Cannon's unsuccessful claims were sufficiently related to the successful claims, and whether Cannon achieved a level of success, making it appropriate to award fees for hours reasonably expended on the unsuccessful claims as well.

Cross-Appeal

Cannon's sole contention in her cross appeal is that the trial court abused its discretion in selecting an hourly billing rate for her attorneys, Mr. Norman and Mr. Feofanov. Cannon argues that the allowed hourly rates of $190 for Mr. Norman and $125 for Mr. Feofanov, instead of the claimed rates of $310 and $225, respectively, were not supported by the record. Again, we note that the parties have not *688 provided this court with a transcript of the trial court's findings as to the reasonableness of the attorneys' claimed hourly rates. In the absence of such a record the reviewing court will presume that the order entered by the trial court was in conformity with the law and had a sufficient factual basis. Foutch, 99 Ill.2d at 392, 76 Ill.Dec. 823, 459 N.E.2d at 959.

[18] Furthermore, in determining whether the trial judge abused her discretion in reaching a reasonable hourly rate, we find the case of Fogle v. William Chevrolet/Geo, Inc., 275 F.3d 613 (7th Cir.2001), to be instructive where it involved the same lawyer seeking the same hourly fee against the same defendant where much of the same evidence was presented. There, Mr. Norman garnered a reasonable hourly rate of $185 in connection with a court-awarded attorney fee. The court stated that the best evidence of a lawyer's reasonable hourly rate is the fee he commands in the market, but such evidence may not be available where much of the lawyer's compensation is by a court-awarded fee. Fogle, 275 F.3d at 615. As in Fogle, Mr. Norman testified in the present case that he has had a few paying clients, and only a handful that pay him at a rate of $310 per hour. In such a situation, the court in Fogle held that Mr. Norman had to show that lawyers of comparable ability commanded the rate he was asking the judge to assess. Fogle, 275 F.3d at 616.

In the present case, Mr. Norman did not submit any affidavits or testimony from other counsel practicing in the same market. Rather, he submitted an affidavit from James Wilber, a paid management consultant who does not practice law in Illinois , resides in Wisconsin , has not practiced law since 1990, and as the court in Fogle pointed out, made no study of the Chicago or any other consumer litigation lawyer market. It was for the trial court to determine the worth and weight to be given Mr. Wilber's assessment of Mr. Norman**855 ***605 and Mr. Feofanov and we will not disturb that determination on review.

We find further support for the trial court's ruling in the record. Defendants presented evidence of the rate that lawyers of similar ability and experience in the community garnered for the type of work in question. They cited cases in which the hourly rates of $150 and $190 were appropriate. They presented the fee petition of Krohn & Moss, Ltd., the law firm that originally represented Cannon in this dispute, and the law firm where Mr. Norman previously worked. Under the fee petition submitted at the arbitration, Mr. Norman's hourly rate was fixed at $175 per hour. With respect to Mr. Feofanov, the record reveals that he was participating in his first jury trial and had been practicing consumer law for only about 1 1/2 years. Additionally, the trial court was also vested with the discretion to consider the quality of the work *689 done during the course of the trial. Accordingly, based upon the record before this court, we find no abuse of discretion in the trial court's determination that the rates of $190 for Mr. Norman and $125 for Mr. Feofanov were reasonable.

For the foregoing reasons, we affirm in part, reverse in part, and remand for a new hearing on an appropriate award of fees where the trial court is to reconsider the number of hours reasonably expended in accordance with the test set forth in Hensley.

Affirmed in part and reversed in part; cause remanded with directions.

HARTMAN and KARNEZIS, JJ., concur.

Ill.App. 1 Dist.,2003.
Cannon v. William Chevrolet/Geo, Inc.
341 Ill.App.3d 674, 794 N.E.2d 843, 276 Ill.Dec. 593, 2003-2 Trade Cases P 74,085

END OF DOCUMENT


Midstate Siding and Window Co., Inc. v. Rogers
204 Ill.2d 314, 789 N.E.2d 1248
Ill. ,2003.
April 24, 2003

204 Ill.2d 314, 789 N.E.2d 1248, 273 Ill.Dec. 816

Briefs and Other Related Documents
Supreme Court of Illinois .
MIDSTATE SIDING AND WINDOW COMPANY, INC., Appellant,
v.
Kenneth ROGERS et al., Appellees.
No. 89059.
April 24, 2003.
Home remodeling contractor who had entered into agreement with homeowners to provide aluminum siding, with contractor agreeing to help homeowners obtain financing, brought suit against homeowners to enforce agreement. Homeowners counterclaimed, alleging that agreement was void under Credit Services Organizations Act. After a bench trial, the Circuit Court, Knox County , James B. Stewart, J., entered judgment for homeowners. Contractor appealed. The Appellate Court, 309 Ill.App.3d 610, 243 Ill.Dec. 87, 722 N.E.2d 1156, affirmed and remanded with directions. Appeal was allowed. The Supreme Court, Freeman, J., held that the contractor was not a “credit services organization” under the Act.
Reversed and remanded.
Kilbride, J., filed a dissenting opinion.
West Headnotes

[1] KeyCite Notes

30 Appeal and Error
30X Record
30X(M) Questions Presented for Review
30k693 Sufficiency of Evidence
30k695 Necessity of Setting Forth All the Evidence
30k695(1) k. In General. Most Cited Cases

Failure of home remodeling contractor to provide a complete record of the trial court proceedings did not require the reviewing court to affirm the trial court's order finding the contractor's agreement with homeowners was unenforceable under the Credit Services Organizations Act, where the reviewing court was not being asked whether the evidence presented at trial was sufficient to support the trial court's findings, and instead was asked to interpret the Act, thereby presenting a question of law. S.H.A. 815 ILCS 605/1 et seq.

[2] KeyCite Notes

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30X(A) Matters to Be Shown
30k497 Grounds of Review
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The appellant has the burden of presenting a sufficiently complete record of the proceedings at trial to support a claim of error.

[3] KeyCite Notes

30 Appeal and Error
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30XVI(G) Presumptions
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In the absence of a sufficiently complete record of the proceedings at trial to support a claim of error, the reviewing court will presume that the order entered by the trial court was in conformity with the law and had a sufficient factual basis.

[4] KeyCite Notes

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30k906 Facts or Evidence Not Shown by Record
30k907 In General
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The reviewing court will resolve any doubts arising from the incompleteness of the record of the trial court proceedings against the appellant.

[5] KeyCite Notes

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The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature.

[8] KeyCite Notes

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361VI Construction and Operation
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361k187 Meaning of Language
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To determine legislative intent, the court examines the language of the statute, which is the most reliable indicator of the legislature's objectives in enacting the law.

[9] KeyCite Notes

361 Statutes
361VI Construction and Operation
361VI(A) General Rules of Construction
361k187 Meaning of Language
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The court affords the language of a statute its plain and ordinary meaning.

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361VI(A) General Rules of Construction
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361k208 k. Context and Related Clauses. Most Cited Cases

The court construes a statute as a whole; the words and phrases must not be viewed in isolation, but must be considered in light of other relevant provisions of the statute.

[11] KeyCite Notes

361 Statutes
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361k212 Presumptions to Aid Construction
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The court presumes that in enacting the statute, the legislature did not intend absurdity, inconvenience, or injustice.

[12] KeyCite Notes

361 Statutes
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361k187 Meaning of Language
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Where the language of the statute is clear and unambiguous, the only legitimate function of the courts is to enforce the law as enacted by the legislature.

[13] KeyCite Notes

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361k228 k. Provisos, Exceptions, and Saving Clauses. Most Cited Cases

It is never proper for the courts to depart from the plain language of the statute by reading into it exceptions, limitations, or conditions which conflict with the intent of the legislature.

[14] KeyCite Notes

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361k187 Meaning of Language
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There is no rule of statutory construction which authorizes the courts to declare that the legislature did not mean what the plain language of the statute says.

[15] KeyCite Notes

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Home remodeling contractor, which agreed to help homeowners obtain financing for their home remodeling project in which contractor would install windows and siding at their home, was not a “credit services organization” under the Credit Services Organizations Act; the consideration received by the contractor was payment for goods or services, not payment for improving the homeowners' credit history or payment for obtaining an extension of credit. S.H.A. 815 ILCS 605/3(a, d).

**1250 ***818 Chester C. Fuller, Peoria , for appellant.
John R. Rehn, Galesburg , for appellees.

Justice FREEMAN delivered the opinion of the court:
*316 In this appeal, we are asked to determine whether the Credit Services Organizations Act (Credit Services Act) (815 ILCS 605/1 et seq. (West 1996)) applies to a transaction between a retailer, Midstate Siding and Window Company, Inc. (Midstate), and homeowners Kenneth and Ella Rogers (Rogers). We find that the Credit Services Act does not apply. Consequently, we reverse the judgments of the appellate court and circuit court, and remand for further proceedings.

BACKGROUND

On December 2, 1996, Midstate filed a complaint in the circuit court of Knox County against the Rogers . In the complaint, Midstate alleged that it is in the home remodeling business, and that on July 24, 1996, it entered into a contract with the Rogers to install windows and siding at their home at a cost of $19,600. Midstate further alleged that the Rogers breached the contract by refusing to allow Midstate to perform the work at their home. Midstate sought damages of $4,000 for lost profit, costs and overhead. Midstate also sought to recover its costs of suit and attorney fees. Midstate attached a copy of the contract to its complaint.

In their answer to the complaint, the Rogers admitted that Midstate is in the home remodeling business, and that they signed the contract attached to the complaint. The Rogers also admitted notifying Midstate that they did not want Midstate to perform the work at their home. However, the Rogers maintained that the contract is not enforceable because: (1) it lacks definite and certain terms; (2) it violates the Credit Services Act (815 ILCS 605/1 et seq. (West 1996)), and the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 1996)); (3) the Rogers informed Midstate of their intent to cancel the contract on July 28, *317 1996; (4) Midstate failed to obtain credit for the Rogers, a condition precedent to performance of the contract; (5) no payment is due under the terms of the contract; and (6) the Rogers believed they were signing an estimate, not a contract. In addition, the Rogers filed a counterclaim against Midstate. In the counterclaim, the Rogers alleged that Midstate's salesman, Alan Klunk, indicated that Midstate would obtain financing for the Rogers and/or provide advice or assistance to the Rogers in obtaining an extension of credit. However, in the contract, Midstate failed to describe the services Midstate was to provide in obtaining the extension of credit for the Rogers , in violation of the Credit Services Act and the Consumer Fraud and Deceptive Business Practices Act. The Rogers sought an award of court costs, attorney fees and punitive damages.

Midstate admitted that the Rogers filled out a credit application, and that Midstate forwarded the application to several lending institutions to obtain financing for the Rogers . Bank One, Illinois , N.A., one of the institutions Midstate contacted, agreed to provide a home equity loan to the Rogers . In a letter dated July 30, 1996, Bank One advised the Rogers of its commitment **1251 ***819 to lend the Rogers the sum of $24,000 at prime plus 3.15%. Midstate maintained that it provided a gratuitous service to the Rogers in forwarding their credit application to the financial institutions.

The matter proceeded to a bench trial at which testimony was heard but not recorded. Following the trial, the circuit court issued a letter opinion as follows:

“I have considered the evidence and your arguments. I find that the Credit Services Organization Act is applicable to the case at bar. I have considered the cases and find that the Act is to be liberally construed to protect consumers. Plaintiff qualifies as a Credit Services Organization i.e., that Plaintiff represented to Defendant that it would assist or obtain for her an extension of credit.

*318 The contract between Plaintiff and Defendant is thereby unenforceable in that it does not comply with [815] ILCS 605/7.

Plaintiff argued that inadequate consideration existed to support a credit contract. This was simply not true. In order to remain competitive, the Plaintiff offered a service to prospective buyers to assist them in obtaining financing to purchase siding and windows. In fact, the agreement between the Plaintiff and Defendant would never have been consummated had the Plaintiff not helped them obtain financing. The Plaintiff's assistance was more than a mere service, but was part of the consideration to support the agreement.”

The circuit court awarded the Rogers attorney fees and costs in the amount of $6,157.50. However, the court found that the Rogers were not entitled to an award of punitive damages. Subsequently, the circuit court denied Midstate's motion to reconsider and clarified that Midstate had violated section 7(a)(2) of the Credit Services Act (815 ILCS 605/7(a)(2) (West 1996)).

The appellate court affirmed the judgment of the circuit court, with one justice dissenting. 309 Ill.App.3d 610, 243 Ill.Dec. 87, 722 N.E.2d 1156. The appellate court reasoned that the Credit Services Act applies to retailers who, in exchange for valuable consideration, aid consumers in obtaining extensions of credit. 309 Ill.App.3d at 611, 243 Ill.Dec. 87, 722 N.E.2d 1156. The appellate court held that, by providing assistance to the Rogers with regard to obtaining an extension of credit as part of an agreement to side their home, Midstate acted within the purview of the Credit Services Act. In addition the court held that the Rogers were entitled to appellate attorney fees under the Credit Services Act.

We granted Midstate's petition for leave to appeal. 177 Ill.2d R. 315.

ANALYSIS

A. Record on Review

[1] As noted above, a transcript of the evidence at trial is *319 not available because the trial was not recorded. In the absence of a transcript, it is incumbent upon the appellant to file a bystander's report of the proceedings (166 Ill.2d R. 323(c)) or an agreed statement of facts (166 Ill.2d R. 323(d)). Midstate failed to do so, leading the Rogers to argue that we must affirm the judgments of the lower courts because the record on review is incomplete. We disagree.

[2] [3] [4] [5] [6] Midstate, as appellant, has the burden of presenting a sufficiently complete record of the proceedings at trial to support a claim of error ( Foutch v. O'Bryant, 99 Ill.2d 389, 391-92, 76 Ill.Dec. 823, 459 N.E.2d 958 (1984); **1252 ***820 Landeros v. Equity Property & Development, 321 Ill.App.3d 57, 63, 254 Ill.Dec. 351, 747 N.E.2d 391 (2001)), and, in the absence of such a record on appeal, the reviewing court will presume that the order entered by the trial court was in conformity with the law and had a sufficient factual basis ( Webster v. Hartman, 195 Ill.2d 426, 433, 255 Ill.Dec. 476, 749 N.E.2d 958 (2001); Foutch, 99 Ill.2d at 392, 76 Ill.Dec. 823, 459 N.E.2d 958). The court will resolve any doubts arising from the incompleteness of the record against the appellant. Foutch, 99 Ill.2d at 392, 76 Ill.Dec. 823, 459 N.E.2d 958; In re K.S., 317 Ill.App.3d 830, 832, 251 Ill.Dec. 344, 740 N.E.2d 425 (2000). However, in the present case, we are not asked to determine whether the evidence presented at trial was sufficient to support the trial court's finding. See Buckholtz v. MacNeal Hospital, 313 Ill.App.3d 521, 526, 246 Ill.Dec. 298, 729 N.E.2d 949 (2000) (plaintiff maintained that the record fails to establish that an expert witness' deposition fee was reasonable). Instead, we are asked to interpret a statute, the Credit Services Act, and determine whether the statute regulates the transaction at issue. This is a question of law, and the lack of a complete record does not bar our review. Candice Co. v. Ricketts, 281 Ill.App.3d 359, 362, 217 Ill.Dec. 53, 666 N.E.2d 722 (1996); In re Estate of Day, 261 Ill.App.3d 993, 996, 199 Ill.Dec. 878, 634 N.E.2d 1232 (1994); In re B.H., 218 Ill.App.3d 583, 586, 161 Ill.Dec. 762, 579 N.E.2d 19 (1991). Further, because the issue before us is a matter of statutory construction, our review is de novo. *320 Sylvester v. Industrial Comm'n, 197 Ill.2d 225, 232, 258 Ill.Dec. 548, 756 N.E.2d 822 (2001); Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill.2d 141, 148, 227 Ill.Dec. 753, 688 N.E.2d 90 (1997).

B. Credit Services Act

[7] [8] [9] [10] [11] In determining whether the Credit Services Act applies to the transaction at issue, we are guided by established principles. The primary rule of statutory construction is to ascertain and give effect to the intent of the legislature. Bridgestone, 179 Ill.2d at 149, 227 Ill.Dec. 753, 688 N.E.2d 90, quoting Illinois Power Co. v. Mahin, 72 Ill.2d 189, 194, 21 Ill.Dec. 144, 381 N.E.2d 222 (1978); In re B.C., 176 Ill.2d 536, 542, 223 Ill.Dec. 919, 680 N.E.2d 1355 (1997). To do so, we examine the language of the statute, the most reliable indicator of the legislature's objectives in enacting the law. Michigan Avenue National Bank v. County of Cook, 191 Ill.2d 493, 504, 247 Ill.Dec. 473, 732 N.E.2d 528 (2000). We afford the language of the statute its plain and ordinary meaning ( Michigan Avenue National Bank, 191 Ill.2d at 504, 247 Ill.Dec. 473, 732 N.E.2d 528) and construe the statute as a whole ( Sylvester, 197 Ill.2d at 232, 258 Ill.Dec. 548, 756 N.E.2d 822). Words and phrases must not be viewed in isolation but must be considered in light of other relevant provisions of the statute. Sylvester, 197 Ill.2d at 232, 258 Ill.Dec. 548, 756 N.E.2d 822; Michigan Avenue National Bank, 191 Ill.2d at 504, 247 Ill.Dec. 473, 732 N.E.2d 528. We also presume that in enacting the statute the legislature did not intend absurdity, inconvenience, or injustice. Michigan Avenue National Bank, 191 Ill.2d at 504, 247 Ill.Dec. 473, 732 N.E.2d 528.

[12] [13] [14] Where the language of the statute is clear and unambiguous, the only legitimate function of the courts is to enforce the law as enacted by the legislature. Henrich v. Libertyville High School, 186 Ill.2d 381, 391, 238 Ill.Dec. 576, 712 N.E.2d 298 (1998). It is never proper for the courts to depart from the plain language of the statute by reading into it exceptions, limitations or conditions which conflict with the intent of the legislature. Bridgestone, 179 Ill.2d at 149, 227 Ill.Dec. 753, 688 N.E.2d 90, quoting **1253 ***821 Harvey Firemen's Ass'n v. City of Harvey, 75 Ill.2d 358, 363, 27 Ill.Dec. 339, 389 N.E.2d 151 (1979). There is no rule of statutory construction which authorizes the courts to declare that the legislature did not mean what the plain language of the *321 statute says. Henrich, 186 Ill.2d at 391, 238 Ill.Dec. 576, 712 N.E.2d 298; Bridgestone, 179 Ill.2d at 149, 227 Ill.Dec. 753, 688 N.E.2d 90.

[15] With these principles in mind, we turn to the arguments advanced by the parties. Citing section 3 of the Credit Services Act (815 ILCS 605/3 (West 1996)), the Rogers maintain that Midstate is a credit services organization because Midstate agreed to help the Rogers obtain financing for the improvements to their home. Midstate counters that it provided a gratuitous service to the Rogers in forwarding their loan application to the financial institutions. Midstate maintains that, in enacting the Credit Services Act, the legislature did not intend to regulate the actions of retailers, such as Midstate, in facilitating the extension of credit to their customers. We agree with Midstate that the legislature did not intend to regulate the transaction at issue.

Section 3 of the Credit Services Act provides in part:

“(a) ‘Buyer’ means an individual who is solicited to purchase or who purchases the services of a credit services organization.

* * *

(d) ‘Credit Services Organization’ means a person who, with respect to the extension of credit by others and in return for the payment of money or other valuable consideration, provides, or represents that the person can or will provide, any of the following services:

(i) improving a buyer's credit record, history, or rating[;]

(ii) obtaining an extension of credit for a buyer; or

(iii) providing advice or assistance to a buyer with regard to either subsection (i) or (ii).” 815 ILCS 605/3(a), (d) (West 1996).

Looking to the definition of a “[b]uyer” and the definition of a “[c]redit [s]ervices [o]rganization,” it is clear that the Credit Services Act regulates transactions involving the payment of money or other valuable consideration in return for the services of the credit services organization. In turn, the services of the credit *322 services organization are “improving a buyer's credit record, history, or rating”; “obtaining an extension of credit for a buyer”; or “providing advice or assistance to a buyer” with regard to “ improving a buyer's credit record, history, or rating” or with regard to “ obtaining an extension of credit” for the buyer. 815 ILCS 605/3 (West 1996). Thus, the Credit Services Act requires payment for credit services, not simply payment for other goods or services.

In the present case, the circuit court rejected Midstate's contention that there was inadequate consideration to support a contract for credit services. The circuit court observed:

“In order to remain competitive, the Plaintiff offered a service to prospective buyers to assist them in obtaining financing to purchase siding and windows. In fact, the agreement between the Plaintiff and Defendant would never have been consummated had the Plaintiff not helped them obtain financing. The Plaintiff's assistance was more than a mere service, but was part of the consideration to support the agreement.”

In this, the circuit court committed error. The Credit Services Act requires that the credit services organization, in return for the payment of money or other valuable **1254 ***822 consideration, agree to provide, or represent that it will provide, credit services to the buyer. The services must be related to an extension of credit for the buyer or improvement of the buyer's credit record, history or rating. The contract at issue does not provide for payment of money or other valuable consideration in return for credit services provided by Midstate. Instead, the agreed consideration is for payment of windows and siding to be installed at the Rogers ' home. Although we agree with the circuit court that the Rogers would not have proceeded with the installation of the windows and siding without assistance in obtaining an extension of credit, the Credit Services Act requires additional consideration for such assistance.

*323 Our reading of the statutory language is consistent with section 5 of the Act. That section provides:

“No credit services organization * * * shall:

* * *

(2) Charge or receive any money or other valuable consideration solely for the referral of a buyer to a retail seller who will or may extend credit to the buyer if such extension of credit is in substantially the same terms as those available to the general public.” (Emphases added.) 815 ILCS 605/5 (West 1996).

The section prohibits a credit services organization from charging a fee for referrals to a retail seller. The section also recognizes that a retail seller is an entity that may extend credit to a buyer. The major distinction between a credit services organization and a retail seller is that the credit services organization, in return for the payment of money or other valuable consideration, offers services to a buyer dedicated to improving the buyer's credit history or rating or to obtaining an extension of credit for the buyer.

Our interpretation of the statutory language is also consistent with the legislative findings and declarations set forth in the Act. Section 2 of the Credit Services Act (815 ILCS 605/2 (West 1996)) provides in part:

“(a) The ability to obtain and use credit has become of great importance to consumers who have a vital interest in establishing and maintaining their credit worthiness and credit standing. As a result, consumers who have experienced credit problems may seek assistance from credit service businesses which offer to improve the credit standing of such consumers. Certain advertising and business practices of some companies engaged in the business of credit services have worked a financial hardship upon the people of this State, often on those who are of limited economic means and inexperienced in credit matters.

(b) The purpose of this Act is to provide prospective consumers of credit services companies with the information necessary to make an informed decision regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices.”

*324 The Credit Services Act is aimed at remedying problems encountered by consumers seeking to improve their credit history or rating, obtain more favorable terms on current debt, or obtain an extension of credit through services provided by credit services organizations. As such, the Credit Services Act prohibits credit services organizations from engaging in certain conduct (815 ILCS 605/5 (West 1996)) and requires that credit services organization make certain disclosures to the buyers (815 ILCS 605/6, 7 (West 1996)). The **1255 ***823 Credit Services Act is not intended to regulate retailers primarily engaged in the business of selling goods and services to their customers. The goods and services provided by retailers are not generally services aimed at improving the consumer's credit or obtaining an extension of credit for the consumer, otherwise unattainable because of the consumer's poor credit history or rating. See Fogle v. William Chevrolet/Geo, Inc., No. 99-C-5960, 2000 WL 1129983 (N.D.Ill. August 9, 2000) (mem. op.).

CONCLUSION

For the aforementioned reasons, the judgments of the appellate court and circuit court are reversed, and the cause is remanded to the circuit court for further proceedings consistent with this opinion.

Appellate court judgment reversed; circuit court judgment reversed; cause remanded.

Justice RARICK took no part in the consideration or decision of this case.

 

Justice KILBRIDE, dissenting:
The majority ignores the plain language of the Act and the undisputed facts of this case. The majority does not stop there. It also reads a requirement of “additional consideration” into the Act. 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. Based on *325 these fundamental errors, the majority concludes that Midstate is not a “credit services organization.” Because I cannot agree with that erroneous conclusion, I respectfully dissent.

Initially, the majority cites the statutory definition of a credit services organization, encompassing “a person who * * * in return for the payment of money or other valuable consideration” either obtains “ an extension of credit for a buyer; or * * * provid[es] advice or assistance to a buyer with regard to” obtaining an extension of credit. (Emphasis added.) 815 ILCS 605/3(d)(ii), (d)(iii) (West 1996); 204 Ill.2d at 321, 273 Ill.Dec. at 821, 789 N.E.2d at 1253. The majority also notes that the statutory definition of a “[b]uyer” is one “who is solicited to purchase or who purchases the services of a credit services organization.” 815 ILCS 605/3(a) (West 1996).

After briefly acknowledging these definitions, however, the majority does not consider their application in this case, choosing instead to conclude summarily that Midstate is not a credit services organization because “the Credit Services Act requires payment for credit services, not simply payment for other goods or services.” 204 Ill.2d at 322, 273 Ill.Dec. at 821, 789 N.E.2d at 1253. This conclusion fails to analyze fully the key issue in this case, namely, whether Midstate's conduct brings it within the statutory definition of a credit services organization. The majority omits a fundamental analytical step by not applying the Act to the relevant facts underlying the parties' transaction. A complete analysis requires us to examine the undisputed facts in this case.

When the Midstate sales representative who met the Rogers in their home informed them of the total cost of the remodeling project, the Rogers explained that they had limited income and could not afford the project. Mr. Rogers is disabled, with a gross income of only $9,540 per year, and Mrs. Rogers works as a nurse, earning an annual gross income of $19,760. As the majority admits *326 (204 Ill.2d at 322, 273 Ill.Dec. at 821, 789 N.E.2d at 1253), the Rogers ultimately agreed to the contract only because Midstate offered its services to help them obtain third-party financing. The parties' agreement indicated no cash payments and stated that the contract amount of $19,600 was subject to a loan. It disclosed no information about **1256 ***824 the applicable interest rates or monthly payment amount.

Midstate concedes that it assisted the Rogers in securing a third-party loan. One of its sales representatives provided the Rogers with a credit application and directed them to complete it. The representative informed the couple that Midstate would obtain financing for them and that they would make monthly payments for approximately 15 years. Again, the representative failed to provide any information concerning the actual amount of the monthly payments.

After the representative's visit, a Midstate loan assistance employee reviewed the Rogers ' credit application. The employee testified that Midstate assists customers with financing and that her job is to help qualify customers for loans. In this capacity, she reviews more than 50 credit applications each week. In this case, she received the Rogers ' credit application, reviewed it, and then contacted a number of lending institutions on their behalf, forwarding their credit application in an effort to secure a loan. The first three institutions she contacted refused to extend credit to the Rogers . Eventually, Midstate secured a loan commitment from Bank One at a rate of 11.35%, adjustable monthly, but the Rogers found this interest rate unacceptable. The record contains no evidence that the Rogers ever independently met, or otherwise undertook loan negotiations, with any lending institution. Thus, Midstate acted as a de facto representative for the Rogers in obtaining the loan commitment, for the mutual benefit of both parties.

When we focus on the specific facts of the transaction *327 between the parties in this case, we must conclude that Midstate's actions went far beyond simply selling goods to the Rogers , as the majority claims. 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. Midstate's conduct fulfilled two of the Act's key criteria, not only “providing advice or assistance to a buyer with regard to” “obtaining an extension of credit,” but also actually obtaining an extension of credit for the Rogers . See 815 ILCS 605/3(d) (ii), (d)(iii) (West 1996). The trial court properly found Midstate's acts went beyond mere ancillary services performed in conjunction with a retail sale and fall squarely within the statutory definition of those provided by a “ [c]redit services organization.” See 815 ILCS 605/3(d)(ii), (d)(iii) (West 1996).

To determine whether Midstate itself was a credit service organization under the Act in this case, however, we must address two other, closely interrelated questions: (1) whether Midstate performed the credit services “in return for the payment of money or other valuable consideration” (emphasis added) (see 815 ILCS 605/3(d) (West 1996)) and (2) whether the Rogers were “buyers” under the statute, meaning that they either were “solicited to purchase” or actually purchased the services of a credit services organization (see 815 ILCS 605/3(a) (West 1996)).

In answering these questions, the majority abruptly concludes that “the agreed consideration is for payment of windows and siding” and is not “in return for credit services provided by Midstate.” 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. Based on that conclusion, the majority holds that Midstate is not a credit services organization. The majority's rationale is belied, however, by its subsequent statement agreeing “with the circuit court that the Rogers would not have proceeded with the installation of the windows and siding without assistance in obtaining an extension of credit.” (Emphasis added.) 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. The circuit court expressly found that

**1257 *328 ***825 “ ‘[i]n order to remain competitive, the Plaintiff [Midstate] offered a service to prospective buyers to assist them in obtaining financing to purchase siding and windows. In fact, the agreement between the Plaintiff and Defendant would never have been consummated had the Plaintiff not helped them obtain financing. The Plaintiff's assistance was more than a mere service, but was part of the consideration to support the agreement.’ ” (Emphases added.) See 204 Ill.2d at 322, 273 Ill.Dec. at 821-22, 789 N.E.2d at 1253-54.

Despite its stated agreement with this finding, the majority nonetheless declares that “the Credit Services Act requires additional consideration for such assistance.” (Emphasis added.) 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. This conclusion is unsupported by any language in the Act. Thus, the majority both overlooks the plain language of the statute and creates other requirements out of whole cloth, without any legal justification.

The majority cites section 5 of the Act as consistent with this conclusion, but the connection between the two concepts remains unexplained. Section 5 prohibits credit services organizations from receiving valuable consideration solely for referring buyers to retail sellers who may extend credit “if such extension of credit is in substantially the same terms as those available to the general public.” 815 ILCS 605/5 (West 1996). First, there is nothing in the record to suggest that this case meets the criteria in section 5. Indeed, the record strongly suggests the opposite conclusion, i.e., the Rogers would not have been able to obtain the necessary financing “ in substantially the same terms as those available to the general public.” Thus, section 5 is not implicated in this case.

Even more importantly, section 5 appears completely unrelated to the majority's finding that “the Credit Services Act requires additional consideration” for Midstate's assistance in obtaining financing for the Rogers . 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. As the majority aptly notes (204 Ill.2d at 320, 273 Ill.Dec. at 820, 789 N.E.2d at 1252), we must not depart from a statute's plain language by reading into it exceptions, limitations, or *329 conditions not clearly intended by the legislature. See Bridgestone/Firestone, Inc. v. Aldridge, 179 Ill.2d 141, 149, 227 Ill.Dec. 753, 688 N.E.2d 90 (1997). Yet, the majority departs from this same fundamental rule of construction by reading into the Act a requirement that an agreement to assist another in obtaining third-party financing be accompanied by some form of “additional consideration.” See 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. The majority does not, and cannot, point to any language in the Act supporting this limitation.

Contrary to the majority's rationale, to bring a credit services organization within the ambit of the Act does not require any additional monetary payment for performing the credit-related services. The Act expressly requires only that the services be provided “in return for the payment of money or other valuable consideration.” (Emphasis added.) 815 ILCS 605/3(d) (West 1996).

Here, Midstate induced the Rogers to enter into the remodeling project by offering to arrange a loan for them, and it subsequently fulfilled this promise. As the majority admits, the Rogers ' agreement to proceed with the contract was strictly contingent on Midstate's proffered assistance in obtaining credit. 204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254. By expressly agreeing with the trial court's finding that “the Rogers would not have **1258 ***826 proceeded” with the contract without Midstate's substantial assistance in obtaining the requisite financing (204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254), the majority also implicitly acknowledges that Midstate's credit assistance was in fact supported by “other valuable consideration” (see 815 ILCS 605/3(d) (West 1996)), i.e., the Rogers' ultimate agreement to enter into the remodeling contract. This acknowledgment contradicts the majority's conclusion that Midstate's credit services were gratuitous and not supported by “additional consideration” (204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254). As the majority admits, Midstate's assistance constituted an integral part of the parties' contract, received in exchange for valuable consideration.

*330 By giving “other valuable consideration” for Midstate's proffered credit services, in addition to the promise of monetary payment for windows and siding as noted by the majority (204 Ill.2d at 322, 273 Ill.Dec. at 822, 789 N.E.2d at 1254), the Rogers were “buyers” under the Act. 815 ILCS 605/3(a) (West 1996) (defining a “[b]uyer” as one “who is solicited to purchase * * * the services of a credit services organization”). Under these facts, Midstate clearly falls within the statutory definition of a “credit services organization,” with the Rogers acting as “buyers” of that organization's credit services. See 815 ILCS 605/3(a), (d) (West 1996). Therefore, the parties agreed to the provision of credit services “in return for the payment of * * * other valuable consideration” (815 ILCS 605/3(d) (West 1996)), and their transaction was governed by the Act.

Holding that Midstate's conduct in this case qualified it as a credit services organization is consistent with the Act's stated goal of providing “prospective consumers of credit services companies with the information necessary to make an informed decision regarding the purchase of those services and to protect the public from unfair or deceptive advertising and business practices.” 815 ILCS 605/2(b) (West 1996). These protections were prompted by “[c]ertain advertising and business practices of some companies engaged in the business of credit services [that] have worked a financial hardship upon the people of this State, often on those who are of limited economic means and inexperienced in credit matters.” 815 ILCS 605/2(a) (West 1996). As prospective consumers of Midstate's credit services, the Rogers were entitled to these protections.

As a credit services organization, Midstate was bound by the statutory mandates contained in sections 6 and 7 of the Act (815 ILCS 605/6, 7 (West 1996)). Since the parties' contract failed to comply with the mandatory terms of the statute, including the requirement of full *331 disclosure of “the terms and conditions of payment, including the total of all payments to be made by the buyer” (815 ILCS 605/7 (West 1996)), it violated the statute. “Any contract for services which does not comply with applicable provisions of [the Act] shall be void and unenforceable as contrary to public policy.” 815 ILCS 605/8 (West 1996).

For this reason, the trial court and the appellate court properly deemed the contract void and awarded the Rogers attorney fees under section 11 of the Act (815 ILCS 605/11 (West 1996)). I would affirm the appellate court on this issue and remand the cause to the trial court with instructions to award reasonable attorney fees in favor of the Rogers .

I also believe the trial court's ruling could be affirmed on the alternative basis that the contract violated the Consumer Fraud and Deceptive Business Practices Act (Fraud Act) (815 ILCS 505/1 et seq. (West 1996)). The Rogers raised this issue**1259 ***827 in their counterclaim, but the trial and appellate courts did not address it. The Fraud Act provides that “the use or employment of any * * * misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon” it constitutes an “[u]nfair method[ ] of competition and unfair or deceptive act [ ] or practice[ ].” 815 ILCS 505/2 (West 1996). Such conduct is unlawful regardless of “whether any person has in fact been misled, deceived or damaged thereby.” 815 ILCS 505/2 (West 1996). In this case, the contractual interest rate was undoubtedly a material fact, but it was not disclosed when the Rogers entered into the agreement with Midstate. Because Midstate omitted the applicable interest rate from the contract, it violated the Fraud Act. For this reason, I would affirm the award of attorney fees to the Rogers pursuant to section 10a(c) of the Fraud Act (815 ILCS 505/10a(c) (West 1996)).

Ill. ,2003.
Midstate Siding and Window Co., Inc. v. Rogers
204 Ill.2d 314, 789 N.E.2d 1248, 273 Ill.Dec. 816

 

 

For additional information about starting a credit repair company in [STATE] contact your state or an attorney.

Requirements for Surety Bond for Credit Repair Business in Illinois

A few states do require a surety bond. (At the time of this writing most states do not require a bond.) If your state does require a bond, you are not required to secure your bond from your same state.

Bonds are a minimal expense (usually under a few hundred dollars) because you order them from a bond service and pay only a small fraction of the bond yourself. A Credit Repair Services Organization Bond protects you. For more information about Credit Repair Services Organization Bonds, contact BondsExpress.

If you get your bond through a bonds service, the amount you pay will generally be 2-3% of the total bond amount (this cost varies depending upon your credit).

Statute of Limitation on Debt in Illinois

Illinois credit repair businesses must be knowledgeable about the statute of limitation governing debt in Illinois because this will guide your business decisions and enable you to best help your clients. The statue of limitations essentially limits the time that a creditor can legally sue a consumer for payments for a debt. Statutes of Limitation (SOL) do vary by state and debt type. In general, it is usually between 3 to 6 years, but sometimes longer.

To learn more about the statute of limitation laws for your state, click here.

Illinois Credit Repair License

We’re not aware of a state requirement for a “credit repair license” to operate a credit repair business in Illinois. However, many find getting training and a certification useful because it:

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Market Potential for an Illinois Credit Repair Business

Market Temperature:

0 1 2 3 4 5 6 7 8 9 10
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Percentage Of Credit Reports That Have Errors

79%

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Total Number of People Living In Illinois

12.8 Million

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Average Debt on Credit Report

$5,700

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Percent of Population With Credit Scores Below 700

44.3%

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Percent of home buyers getting a mortgage for their home purchase

88%

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Frequently asked questions

How do I start my credit repair business in Illinois?
A smart first step to starting a credit repair company in Illinois is to answer all of the questions that apply to your Illinois credit repair business on the Illinois State Feasibility Checklist. It may seem like an unnecessary stop on the way to a profitable credit repair business in Illinois, but it is a good idea to ensure that you can confidently answer questions like, “Do you know your necessary expenses rent, wages, insurance, utilities, advertising and interest, etc.?” and “If you appeal to only a portion of the market, is that segment enough to be profitable?” Many of these questions are answered for you in the credit repair training you can get through Credit Repair Cloud.
What business structure is best for my Illinois credit repair company?
There are seven main types of business structures in Illinois. Which one you choose depends on what kind of credit repair operation you choose to run. Remember, you can change your business structure later on, but we recommend you consult with a lawyer familiar with the ins and outs of business operations in Illinois to save yourself future trouble with your credit repair company’s operations.
When and how should I register my credit repair company name in Illinois?
Illinois state law requires credit repair companies to register their company with the county clerk’s office if your business name differs from the owner’s legal name. So, unless your company name is your exact legal name, register your credit repair business with the local county clerk’s office in Illinois (which can be found here.)

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Legal disclaimer: Our software products and resources offer credit information, not legal advice. We make every effort to ensure the accuracy of the information and to clearly explain your options. However, we do not provide legal advice (i.e.; the application of the law to your individual circumstances). For legal advice, please consult an attorney, your city or your state.