APPEAL from the Circuit Court of Livingston County; the Hon.
WILLIAM T. CAISLEY, Judge, presiding.
MR. PRESIDING JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:
Plaintiff, individually and in behalf of others similarly situated, appeals from the order of the trial court which dismissed her amended complaint seeking damages. She elected to stand on her amended complaint and appeals the order.
Plaintiff contends that defendant's operation of its "Easy Payment Plan" violated the Retail Installment Sales Act (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 501 et seq.), the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 261 et seq.), and "An Act in relation to the rate of interest * * *" (hereinafter Interest Act) (Ill. Rev. Stat. 1975, ch. 74, par. 1 et seq.). The action was commenced in November 1975, but defendant's use of the payment plan was discontinued in 1976, prior to the hearings on the pleadings.
There is substantial agreement as to the substance of the plan in effect. Defendant, as a retailer of consumer goods, granted to customers the privilege of paying for their purchases on an installment basis. A person who approved credit executed a retail installment sales contract which expressly provided for a series of credit sales under the plan, and Sears did not thereafter require completion of a separate contract for each separate sale.
As to a specific purchase, the customer chose either to pay cash or by installments. If the latter, the customer would pay a deferred payment price which included the cash price of the item plus a predetermined finance charge computed as to the cash price. The customer would indicate the number of months over which payment would be extended and a payment schedule determined for equal monthly installments until paid.
Any subsequent sale was added to and was consolidated with any unpaid balance on a single monthly billing so that the customer had but one balance and one monthly payment. While additional purchases might require a longer period to pay the consolidated balance, there was no refinancing as to earlier purchases or increase in the finance charge on such earlier purchase. Upon any prepayment of the balance, the customer received a rebate of a portion of the finance charge.
The customer entering such plan executed a retail installment contract before the initial purchase. A disclosure statement was issued to the customer at the time of such final credit purchase and again before any later purchase when the account had a zero balance. Finally, a monthly billing statement was delivered to the customer every month before the installment payment was due. As to each purchase, the customer received a sales slip which acknowledged election to make a credit purchase and was signed by the customer.
Count I alleges that plaintiff made a credit purchase and full payment under the plan, and that thereafter further credit purchases were made under the initial credit agreement with finance charges therefore. It is alleged that the subsequent purchases must be made through a separate installment contract for the reason that subsequent purchases may only be consolidated with prior purchases where the latter remain unpaid. Plaintiff charges that such system violates the Retail Installment Sales Act (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 501 et seq.) and is an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) (Ill. Rev. Stat. 1975, ch. 121 1/2, pars. 262E and 262F). In the alternative, she charges violation of the Interest Act (Ill. Rev. Stat. 1975, ch. 74, par. 1 et seq.). Plaintiff prayed damages and attorney's fees.
Count II of the amended complaint alleges that as to plaintiff's subsequent purchases, defendant failed to give disclosure as required in the several sections of the Retail Installment Sales Act. Recognizing that the opinion in Hoover v. The May Department Stores Co. (1979), 77 Ill.2d 93, 395 N.E.2d 541, had determined that the Retail Installment Sales Act did not provide a private cause of action for damages, plaintiff prayed that the court award a penalty as provided in section 31(b) of the Act (Ill. Rev. Stat. 1975, ch. 121 1/2, par. 531(b)).
Count III realleges the matters stated in count II, terms them "wilful and material violations" of the Retail Installment Sales Act, and prays damages as provided in sections 2E, 2F, and 10a of the Consumer Fraud Act (Ill. Rev. Stat. 1975, ch. 121 1/2, 262E, 262F, and 270a).
In its written order dismissing the complaint, the trial court concluded that the opinion in Hoover did not permit a private action for damages under the Retail Installment Sales Act. The order also dismissed a count to a prior amended complaint which alleged violation of the Consumer Fraud Act upon the finding that there were no allegations of violation of sections 2A through 2N (Ill. Rev. Stat. 1975, ch. 121 1/2, pars. 262A through 262N).
• 1 Plaintiff contends that in the absence of a retail installment contract there is no agreement as to finance charges so that the Interest Act (Ill. Rev. Stat. 1979, ch. 74, par. 1 et seq.) applies and would limit the amount that defendant could recover. We are not persuaded by plaintiff's argument that there is no longer a legal distinction between interest and the finance charges for the sale of consumer goods on credit.
In Johnson v. Sears Roebuck & Co. (1973), 14 Ill. App.3d 838, 303 N.E.2d 627, plaintiff contended that the Retail Installment Sales Act did not permit the computation of finance charges by use of a previous balance method, but that the Interest Act (Ill. Rev. Stat. 1979, ch. 74, par. 1 et seq.) controlled. The reviewing court stated, however:
"Thus, Illinois recognizes that a seller may sell his property for the immediate payment of a certain amount (`cash price') or permit payment over a period of time for a greater total price (`time price'). Such a transaction is not a loan, and the additional amount charged, the time price differential, is ...