Illinois Reverses Course, Realigns State Collections Law with FDCPA

On January 29, 2016, Illinois Governor Bruce Rauner signed into law Senate Bill 1369. That Bill reversed provisions adopted in the Illinois Collection Agency Act, an August 2015 legislative enactment that conflicted with the federal Fair Debt Collection Practices Act (FDCPA)

On August 31, 2015, insideARM wrote about Illinois Public Act No. 227, legislation that was quietly signed into law, containing several substantive updates to the Illinois Collection Agency Act (ICAA). There was no implementation period on these changes; they took effect upon signing of the law on August 3, 2015.

The changes to the ICAA highlighted in that article included:

Commercial collectors are now treated like consumer agencies

On page 53 of the Act, the words “consumer” and “natural” [person] were removed, causing the Law to apply to commercial collection activities in addition to consumer collections. This includes the requirement to be licensed, with limited exceptions (see page 60).

Validation of Debts

On page 81, the Act strikes “That upon the debtor’s written request within the 30 day period…” and states “The collection agency will provide the debtor with the name and address of the original creditor, if different from the current creditor.”

Disclosure of Company Name When Seeking to Obtain Location Information

At the bottom of page 76, Sec. 9.1 (1) the Act strikes “only if expressly requested,” in the paragraph related to identifying the name of the collector’s employer. This suggests that collectors must now always state the name of their employer, whether requested to or not.

On November 19, 2015 insideARM published a second article on this legislation, this time discussing the introduction of Senate Bill 1369 to fix the above issues.

The Senate Bill 1369, signed into law last week, does the following:

• REMOVES the requirement that applied the ICAA communication requirements to commercial debt collection
• REMOVES the requirement that debt collectors automatically identify their employer when communicating with individuals for the purpose of acquiring location information about a debtor
• REMOVES the requirement that debt collectors provide the name and address of the original creditor in the initial consumer communication and/or the written notice

The legislation became law immediately upon the Governor’s signature. The new law also indicates that collection agencies and debt buyers will not be subject to civil liability for failure to comply with the aforementioned requirements while they were law from August 3, 2015 to January 29, 2016 if the collection agency or the debt buyer demonstrates compliance with comparable provisions of the FDCPA.

insideARM Perspective

Kudos to all of the trade associations, legislators and individuals involved in moving quickly to remedy the mistakes included in Illinois Public Act No. 227.

If only things moved as quickly with regard to changes to the FCC/TCPA Rules promulgated in July…