On August 3, 2015, Illinois Governor Bruce Rauner signed a bill into law (Public Act No. 227) that was put forth by the Illinois Department of Financial and Professional Regulation as a simple update and extension of certain laws under their purview. Contained in the 218 pages of text, was an update and extension of the Illinois Collection Agency Act (ICAA).
The vast majority of the changes to the ICAA were non-substantive updates to the law; however, the following two updates to the code included major substantive changes that all companies that operate within the collection industry must be aware and immediately address:
- Commercial Debt – The bill removed of the word “natural” before the word “person” in the definitions of “debt” (p. 53) and “debtor” (p. 54) resulting in the expansion of the application of the ICAA to the collection of commercial debt. Consequently, those collecting on debt owed by Illinois businesses must now comply with the same requirements that apply to consumer debt.DBA International believes that this was an inadvertent drafting error. The ICAA was drafted to apply exclusively to natural persons (not commercial enterprises) and as such contains various requirements and terminology that would be challenging and in some cases impossible to apply at the company level.
- Validation of Debts – The bill altered the requirements for “validation of debts” (p. 80-81) that had previously paralleled the requirements of the federal Fair Debt Collection Practices Act (FDCPA) by requiring the initial communication and/or the written notice (sent within five days of the initial communication) contain the name and address of the original creditor.While this was already a requirement in the ICAA and FDCPA, it was only required upon the written request of the consumer rather than the upfront requirement it has been changed to in Illinois.
The bill does not have a delayed implementation date and took effect upon the Governor’s signature on August 3rd. DBA International thinks substantive changes of this magnitude should not be hidden in a statutory “clean up” bill as they require thoughtful deliberation and should allow for a reasonable implementation period. As such, DBA International is working with representatives from the broader collection industry in Illinois to reverse these two substantive changes.
Nevertheless, until such changes are accomplished, this is now the law in the state of Illinois and debt collection companies need to be compliant. DBA International encourages you to share this information with your operations, compliance and legal representatives.