Consumer Fraud and the Voluntary Payment Doctrine

The voluntary payment doctrine is an old rule of law that has taken on a new life as a defense to consumer fraud cases. As explained by the Third District in Flournoy v. Ameritech, No. 02--MR-585 (July 2004)--

The voluntary payment doctrine provides that, absent fraud, misrepresentation or mistake of fact, money that is voluntarily paid under a claim of right to the payment and with full knowledge of the facts by the payer cannot be recovered unless the payment was made as a result of compulsion.

In Flournoy, the lower court dismissed a case against Ameritech on the grounds that the payments to Ameritech, which constituted the damages being sought, had been made voluntarily. The appellate court reversed, characterizing the allegations against the phone company as "deceptive acts" rather than "unfair acts." According to the court, this is an important distinction to make--the voluntary payment defense might apply to latter, but not to the former. When the cause of action is "in the nature of fraud," the voluntary payment doctrine does not bar the claim.

Plaintiffs' lawyers suing for violations of the Illinois Consumer Fraud Act would be well-advised to plead their case to fit within the holding of the Flournoy decision.