The Illinois legislature enacted a bill amending the Illinois Collection Agency Act to include debt buyers. A “debt buyer” means “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.” Under the amended law, debt buyers must commence any legal action upon an obligation arising out of a consumer debt within the applicable limitations period, and must comply with all provisions of the law, except that debt buyers are not required to obtain a surety bond, maintain a trust account, obtain written authorization to refer an account to an attorney or adhere to the assignment for collection creditor under the Act. Moreover, the amendment subjects debt buyers to potential Attorney General enforcement actions under the Illinois Consumer Fraud and Deceptive Business Practices Act. The new law is effective January 1, 2013.
Alert September 05, 2012