Illinois Debt Buyer Bill Law Signed Into Law
On August 24, 2012, Illinois Governor Pat Quinn signed into law House Bill 5016 which amends the Illinois Collection Agency Act to explicitly bring Debt Buyers under its authority with some noteworthy exceptions.
The law defines “Debt Buyer” as “a person or entity that is engaged in the business of purchasing delinquent or charged-off consumer loans or consumer credit accounts or other delinquent consumer debt for collection purposes, whether it collects the debt itself or hires a third-party for collection or an attorney-at-law for litigation in order to
collect such debt.”
The Illinois Collection Agency Act will not apply to Debt Buyers in the following areas:
- Maintaining Surety Bonds
- Maintaining Trust Accounts
- Seeking Authorization to Refer an Account to an Attorney
- Assignment Criteria
DBA welcomes this statutory change, as it ends the uncertainty of what requirements contained in the Illinois Collection Agency Act apply to Debt Buyers. The Act as originally adopted in 2001 was designed to apply to third party collections but in recent years was broadened through regulatory and judicial interpretation to apply to debt Buyers even though a number of the Acts provisions would not apply to the legal owner of a debt. The confusion created by these interpretations has been the basis of a number of consumer counterclaims and class action suits brought over the past few years.
DBA would like to recognize Todd Lansky, DBA’s North Central Legislative Regional Chair, for all of the hard work that he did on behalf of DBA and the industry in successfully advocating for this clarifying language.
HB 5016 will take effect on January 1, 2013. A copy of the bill can be found here: ftp://www.ilga.gov/legislation/97/HB/09700HB5016enr.htm.