Illinois Collection Agency Act

In Illinois, both the federal Fair Debt Collection Practices Act (FDCPA) and the Illinois Collection Agency Act (ICAA) regulate debt collectors. The FDCPA applies to every state, and it protects consumers from unfair and deceptive debt collection practices. The FDCPA also prohibits debt collectors from contacting you at certain times and places. Likewise, the ICAA protects those whose debts are in collection. The law requires debt collectors to be licensed and regulates what collectors are allowed to do when attempting to collect debts. For instance, much like under the federal FDCPA, the ICAA prohibits collectors from using profane, obscene, or abusive language or trying to trick you into paying a debt. Also, similar to the FDCPA's debt validation requirement, the ICAA gives you the right to request that a debt collector validate (check the legitimacy) a debt and details what they have to do if you challenge the validity of a debt.

Ultimately, the ICAA supplements the laws governing debt collectors under the federal FDCPA. But not every company or person who tries to collect a debt from an Illinois resident has to comply with the ICAA.

Who Is Considered a "Debt Collector" Under Illinois Law?

The ICAA applies to companies in the business of collecting debts. (225 Ill. Comp. Stat. § 425/2). (This article usually uses the term "debt collectors," but the ICAA generally calls debt collectors "collection agencies" or "licensees" because they have to get a license).

If a business is "confined" to something other than running a collection agency, it doesn't have to comply with the ICAA. (225 Ill. Comp. Stat. § 425/03). Also, some companies and professionals are exempt from complying with the ICAA, such as:

• banks and similar financial institutions, like credit unions or loan companies
• real estate brokers
• attorneys
• retail stores collecting on their own accounts
• Unit Owner's Associations established under the state's Condominium Property Act, and
• billing companies that just send account notices. (225 Ill. Comp. Stat. § 425/03).

The ICAA also doesn't cover original creditors. The original creditor is the company that gave you the loan or credit. Debt buyers, on the other hand, are generally subject to the law. (225 Ill. Comp. Stat. § 425/8.5).

Exemption for Child Support Collectors

The ICAA contains specific rules exempting debt collectors from many of the law's requirements when attempting to collect child support debts. For example, collectors aren't limited in how often they can contact you, aren't prohibited from contacting your employer, and aren't barred from publishing your name in a list of people who owe similar debts. Though, if you think a child support collector has violated the law when contacting or communicating with you, discuss the matter with an Illinois debt collection lawyer. (225 Ill. Comp. Stat. § 425/2.04).

Debt Collectors Must Get a License

Debt collectors with offices in Illinois must get a license. (225 Ill. Comp. Stat. § 425/4). If a debt collector fails to get a license, the state can impose a fine of up to $10,000 for each violation. (225 Ill. Comp. Stat. § 425/4.5).

If a debt collector is located out of state and tries to contact you via phone, mail, or electronic communication, it doesn't need an Illinois license if it has a license in the state from which it is contacting you. (225 Ill. Comp. Stat. § 425/4).

Prohibited Debt Collection Practices in Illinois

The ICAA limits the methods that debt collectors can use to collect debts and how they communicate with you or third parties. It also gives you specific rights if you want to challenge the validity of a debt.

What Debt Collectors Can't Do

Among other things, debt collectors are prohibited from doing any of the following under the ICAA.

• Using or threatening to use force or violence to cause physical harm to a debtor, the debtor's family, or the debtor's property.
• Threatening to instigate an arrest or criminal prosecution where no basis for a criminal complaint lawfully exists.
• Threatening the seizure, attachment, or sale of a debtor's property where such action can only be taken pursuant to court order without disclosing that prior court proceedings are required.
• Disclosing or threatening to disclose information adversely affecting a debtor's reputation for creditworthiness with knowledge the information is false.
• Communicating with the debtor or any member of the debtor's family at such a time of day or night and with such frequency as to constitute harassment of the debtor or any member of the debtor's family. (Unless the debtor says otherwise, a debt collector must assume that the convenient time for communicating with a consumer is after 8 o'clock a.m. and before 9 o'clock p.m. local time at the debtor's location.)
• Using profane, obscene or abusive language in communicating with a debtor, the debtor's family, or others.
• Disclosing or threatening to disclose information relating to a debtor's debt to any other person except where such other person has a legitimate business need for the information or except where such disclosure is permitted by law.
• Disclosing or threatening to disclose information concerning the existence of a debt which the collection agency knows to be disputed by the debtor without disclosing the fact that the debtor disputes the debt.
• Engaging in any conduct that is intended to cause and did cause mental or physical illness to the debtor or the debtor's family.
• Attempting or threatening to enforce a right or remedy with knowledge or reason to know that the right or remedy doesn't exist.
• Using any form of communication which simulates legal or judicial process or which gives the appearance of being authorized, issued or approved by a governmental agency or official or by an attorney at law when it is not.
• Using any badge, uniform, or other indicia of any governmental agency or official except as authorized by law.
• Conducting business under any name or in any manner which suggests or implies that the collection agency is a branch of or is affiliated in any way with a governmental agency or court if such collection agency is not.
• Misrepresenting the amount of the debt alleged to be owed.
• Representing that an existing debt may be increased by the addition of attorneys' fees, investigation fees or any other fees or charges when such fees or charges may not legally be added to the existing debt.
• Representing that the collection agency is an attorney at law or an agent for an attorney if the collection agency is not. (225 Ill. Comp. Stat. § 425/9).

Restrictions and Rules When Contacting a Debtor

The ICAA requires debt collectors to comply with the following rules.

Disclosures at the time of first contact. Within five days of its first contact with you, the debt collector must give you the following information in a written notice:

• the amount of the debt.
• the name of the creditor to whom the debt is owed.
• that, unless you, within 30 days after receipt of the notice, dispute the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the collection agency
• that, if you notify the collection agency in writing within the 30-day period that the debt, or any portion thereof, is disputed, the collection agency will obtain verification of the debt or a copy of a judgment against you and a copy of the verification or judgment will be mailed to you by the collection agency, and
• that upon your written request within the 30-day period, the collection agency will provide you with the name and address of the original creditor, if different from the current creditor. (225 Ill. Comp. Stat. § 425/9.3).

No harassment by frequent contacts. The ICAA doesn't set a limit on the number of contacts that constitute harassment. But the ICAA does say that if the debt collector contacts you or a member of your family at an inconvenient time or place, then it's a harassing contact (except that it can assume that 8:00 a.m. to 9:00 p.m. is convenient). If the debt collector knows that your employer doesn't allow you to receive personal calls, then it may not contact you at work. (225 Ill. Comp. Stat. § 425/9.2).

Protect your privacy in communication with others. A debt collector is allowed to contact a third party to acquire location information about you. But it can't reveal its employer to the third party (unless the party expressly asks for that information). A collector can't tell another person that you owe a debt, nor can it communicate with someone more than once unless by request or unless the collection agency reasonably believes that the earlier response was erroneous or incomplete and that the person now has correct or complete location information. When a collector mails you information, it can't use a postcard or use any markings on an envelope to indicate that it is a debt collector or that it is in the debt collection business. (225 Ill. Comp. Stat. § 425/9.1).

If you are represented by an attorney, the collector may only communicate with your attorney. The only exception to this is if your attorney fails to communicate with the collector for at least 30 days. (225 Ill. Comp. Stat. § 425/9.1).

Stop contact upon request. If you notify the debt collector in writing that you refuse to pay the debt or that you want it to stop contacting you, then the collector must cease all communication with you. It might be able to pursue its debt collection by suing you, however, and it can send you one last notification informing you what it will do. (225 Ill. Comp. Stat. § 425/9.2).

How to Challenge or Validate the Debt

The ICAA gives you two methods to challenge or validate a debt before the debt collector can continue collection efforts.

If you think you don't owe the debt or owe a lesser amount. Again, as noted earlier, the debt collector must give you notice of the debt amount and your right to dispute the debt. You then have 30 days to dispute the amount of the debt or to dispute that you owe anything. The debt collector must then stop any collection efforts until it verifies with the original creditor that you actually owe the debt. It must mail you a written verification. (225 Ill. Comp. Stat. § 425/9.3).

If you're a victim of identity theft. Debt collectors must stop collection efforts after you give them proper notice that you were a victim of identity theft. You'll have to provide the debt collector with a police report, a completed Federal Trade Commission Affidavit of Identity Theft (available at www.ftc.gov), an Illinois Attorney General ID Theft Affidavit (available at www.illinoisattorneygeneral.gov), or a written statement that certifies that the representations therein are true, correct, and contain no material omissions of fact. If you write your own statement, you'll also need to include the following:

• a copy of your driver's license or state-issued identification card
• any documentation that proves you were the victim of identity theft
• as many specific facts as possible supporting your claim of identity theft
• any explanation showing you didn't incur the debt.
• any available correspondence disputing the debt after transaction information was provided to you
• proof of your residence at the time of the identity theft (such as a utility bill with your name)
• any information concerning who might have incurred the debt and the name of the person you think is responsible
• an express statement that you didn't authorize the use of your name or personal information for incurring the debt, and
• your contact information. (225 Ill. Comp. Stat. § 425/9.4).

The debt collector is required to review the information you give it and make a good faith determination that you're still liable for the debt before it can resume collection efforts. It must give you a written explanation of the basis for its decision. (225 Ill. Comp. Stat. § 425/9.4).

Remedies If a Debt Collector Violates Illinois Law

If you think a debt collector violated the ICAA, you can do the following.

File a Complaint With the State of Illinois

If you think a debt collector has violated the ICAA, contact the Illinois Department of Financial and Professional Regulation. You can file a complaint online as well as check the license status of a debt collector.

You can also file a complaint with the Illinois Attorney General at www.illinoisattorneygeneral.gov.

Contact the Consumer Financial Protection Bureau

You can file a complaint with the Consumer Financial Protection Bureau (CFPB) about a collector. After you submit a complaint, the CFPB will work to get you a response from the collector, typically within 15 days.

Sue the Debt Collector

Even though the ICAA doesn't explicitly allow you to sue the debt collector directly, some courts in Illinois have ruled that people have the right to sue a debt collector. You might be able to recover actual damages and possibly punitive damages. Also, you can sue a collector for violating the federal FDCPA. You might be able to recover monetary damages, attorneys' fees, and more. (15 U.S. Code § 1692k).

If you need help filing a lawsuit, talk to a debt relief lawyer.