Prohibited Reasons for Refusing to Do Business It is not permissible to refuse a sale or service or terminate a customer relationship if it is discriminatory or retaliatory or misleading or harmful to the customer, or if it constitutes a breach of a contractual duty or obligation to the customer or under the dealership’s franchise agreement with the manufacturer. For example, the following reasons to refuse to do business with the customer would be prohibited: • Discrimination based on race, gender, religion, national origin, age, disability or other protected classes under the Illinois Human Rights Act and Title VII of the Federal Civil Rights Act of 1964. • Retaliation for filing a complaint or asserting legal rights. The foregoing examples are not exhaustive. There are other applicable state and federal laws that come into effect in the dealership’s decision and ability to refuse to do business with a customer.1 Best Practices for Terminating a Customer Relationship To minimize legal pitfalls, dealerships should: • Have and implement a written policy and ensure that dealership staff follow the policy. • Document all interactions with the customer, especially incidents of misconduct. • Issue a written notice that is reviewed by legal counsel explaining the termination of service, citing specific behavior. • Avoid public confrontation or defamatory statements. • Consult legal counsel if the situation escalates or involves potential litigation. Illinois new car dealers are not powerless when dealing with difficult customers. By understanding the legal boundaries and maintaining clear documentation, they can protect their businesses while staying compliant with state and federal laws. The key is to act professionally, consistently and lawfully — because firing a customer should not mean firing up a lawsuit. Julie A. Cardosi is Principal of the private firm, Law Office of Julie A. Cardosi, P.C., of Springfield, Illinois. She has been practicing law for nearly 40 years and has exclusively represented the unique business interests of automobile dealers statewide for over 30 years. Formerly in-house staff legal counsel for the Illinois Automobile Dealers Association, she concentrates her practice in the areas of dealership ownership transfers (asset purchases and stock acquisitions), mergers and acquisitions, franchise law and franchise issues, factory relations, add points, commercial real estate transfers, advertising and other issues impacting day-to-day dealership operations. Julie also previously served as an Assistant Attorney General and Deputy Chief of the Illinois Attorney General’s Consumer Fraud Division and is the original author of the Illinois Motor Vehicle Advertising Guidelines, which the Illinois General Assembly adopted as the Motor Vehicle Advertising Regulations. 1 • Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq.) Protects consumers from unfair treatment but also allows businesses to protect themselves from fraudulent or abusive behavior. • Illinois Vehicle Code (625 ILCS 5/1-100 et seq.) Governs dealer licensing and conduct. Dealers must follow lawful requirements and avoid deceptive practices. • Illinois Lemon Law (815 ILCS 380/1 et seq.) Applies to new vehicle defects—not customer behavior—but dealers must honor warranties and avoid retaliatory service denial. • Federal Trade Commission Act (15 U.S.C. 45 et seq.) Prohibits deceptive practices and requires transparency including in pricing and add-ons. Dealers must avoid misrepresentation but are not obligated to serve every customer. • Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) Requires dealers to protect customer data. If a customer is abusive or violates dealership policies, the dealer may terminate the relationship while still safeguarding personal information. • Equal Credit Opportunity Act (15 U.S.C 1691 et seq.) Dealers must not deny financing based on protected characteristics. However, they may refuse financing based on legitimate credit concerns or abusive conduct. 9 Illinois Automobile Dealer News
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