On January 29, 2016, Illinois amended the Illinois Collection Agency Act (“ICAA”) through the enactment of Senate Bill 1369 (the “Amendment”). The Amendment, which was effective immediately, removes confusing and burdensome requirements provided by the ICAA and corrects amendments made to the ICAA last August. Those amendments had expanded sections of the ICAA to commercial debt and required disclosures contrary to the federal Fair Debt Collection Practices Act (“FDCPA”).
To clarify that licensing requirements apply to both commercial and consumer collections the Amendment adds the following definitions:
“Collection agency” means any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in the collection of a debt.
“Consumer debt” or “consumer credit” means money or property, or their equivalent, due or owing or alleged to be due or owing from a natural person by reason of a consumer credit transaction.
The Amendment changes location requirements to match those provided by the FDCPA requiring a debt collector to provide the name of their company to a third party only when it is expressly requested when trying to collect a “consumer debt.” Additionally, the Amendment changes the validation notice requirements so that only a written request will trigger the requirement that the collector provide original credit’s name and address:
(5) That upon the debtor's written request within the 30-day period, the The collection agency will provide the debtor with the name and address of the original creditor, if different from the current creditor. If the disclosures required under this subsection (a) are placed on the back of the notice, the front of the notice shall contain a statement notifying debtors of that fact.
(b) If the debtor notifies the collection agency in writing within the 30-day period set forth in paragraph (3) of subsection (a) of this Section that the debt, or any portion thereof, is disputed or that the debtor requests the name and address of the original creditor, the collection agency shall cease collection of the debt, or any disputed portion thereof, until the collection agency obtains verification of the debt or a copy of a judgment or the name and address of the original creditor and mails a copy of the verification or judgment or name and address of the original creditor to the debtor.
(c) The failure of a debtor to dispute the validity of a debt under this Section shall not be construed by any court as an admission of liability by the debtor.
(d) This Section applies to a collection agency or debt buyer only when engaged in the collection of consumer debt.
The Amendment constitutes a win for the collection industry by eliminating confusing and harsh requirements for collection agencies. To learn more about the Amendment or the ICAA in general feel free to contact Joseph Messer at 312-334-3440 or firstname.lastname@example.org.