March 31, 2020: On the heels of declaring Illinois a disaster area due to the COVID-19 pandemic, on March 30, 2020, the Governor of Illinois issued Executive Order 202010 requiring all non-essential businesses and operations to cease all activities within the State.

A copy of the Order may be viewed here.

Illinois considers licensed debt collection agencies and debt buyers as non-essential businesses. Under the Order, non-essential businesses are generally permitted to perform services using a work from home model. However, the Order presents a conflict with the state’s Collection Agency Act. This is because the Illinois Collection Agency Act, 225 ILCS 425 et seq., does not contemplate collectors working from home. To reconcile this conflict, debt collection agencies seeking to work at a location other than their address of record, including remotely, are directed by Order to provide the Illinois Department of Licensing (Department) notice within 14 days of any address changes pursuant to 225 ILCS 425/2.5(2).

Of greatest concern to debt collection agencies is the Department’s ambiguous, murky position on whether a debt collector has an affirmative duty to modify existing payment schedules or suspend collection activity. At this point, the Order provides, “debt collectors are “encouraged” to work with consumers to modify payment schedules or suspend all collection activity for a period of no less than 60 days.”  RMAI will continue to monitor this Order to gather additional information from the Governor’s office about these suggested actions.

In addition to notifying the Department of the work from home address for collectors, the Department reminds debt collection agencies and debt buyers, when furnishing data to credit reporting agencies, to report accurate and complete information and use disaster codes, along with any other deferment or forbearance codes, for any consumer who is unable to repay their debt to mitigate the credit reporting impact of the crisis.

The CDIA guidelines for data furnishers during the COVID-19 crisis may be viewed here.

So what does this all mean? Members are reminded, nothing in the Illinois Order alters a debt collector’s duty to comply with applicable law. Remember to adhere to state calling time restrictions, FDCPA and Illinois restrictions regarding calls and texts sent at inconvenient times, and practices that may trip the Unfair or Deceptive Practices Act section of Dodd Frank. Members are encouraged to enhance their hardship policies during this difficult time to not only reflect the concerns raised by the Illinois Order but to increase their sensitivity to the condition of each consumer with whom they communicate.

This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.