HB2491 103RD GENERAL ASSEMBLY

LRB103 28451 BMS 54831 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2491

Introduced 2/15/2023, by Rep. Robert "Bob" Rita

SYNOPSIS AS INTRODUCED:

205 ILCS 740/9

was 225 ILCS 425/9

Amends the Collection Agency Act. In provisions concerning disciplinary actions by the Department of Financial and Professional Regulation, provides that nothing shall prevent a debtor from choosing to make a payment that includes a transaction fee paid by the debtor if the transaction complies with specified conditions.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Collection Agency Act is amended by changing Section 9 as follows:

(205 ILCS 740/9) (was 225 ILCS 425/9)

(Section scheduled to be repealed on January 1, 2026)

Sec. 9. Disciplinary actions.

(a) The Department may refuse to issue or renew, or may revoke, suspend, place on probation, reprimand or take other disciplinary or non-disciplinary action as the Department may deem proper, including fines not to exceed $10,000 per violation, for any one or any combination of the following causes:

(1) Material misstatement in furnishing information to the Department.

(2) Violations of this Act or of the rules promulgated hereunder.

(3) Conviction by plea of guilty or nolo contendere, finding of guilt, jury verdict, or entry of judgment or by sentencing of any crime, including, but not limited to, convictions, preceding sentences of supervision, conditional discharge, or first offender probation of the collection agency or any of the officers or owners of more than 10% interest of the agency of any crime under the laws of any U.S. jurisdiction that (i) is a felony, (ii) is a misdemeanor, an essential element of which is dishonesty, or (iii) is directly related to the practice of a collection agency.

(4) Fraud or misrepresentation in applying for, or procuring, a license under this Act or in connection with applying for renewal of a license under this Act.

(5) Aiding or assisting another person in violating any provision of this Act or rules adopted under this Act.

(6) Failing, within 60 days, to provide information in response to a written request made by the Department.

(7) Habitual or excessive use or addiction to alcohol, narcotics, stimulants or any other chemical agent or drug which results in the inability to practice with reasonable judgment, skill, or safety by any of the officers or owners of 10% or more interest of a collection agency.

(8) Discipline by another state, the District of Columbia, a territory of the United States, or a foreign nation, if at least one of the grounds for the discipline is the same or substantially equivalent to those set forth in this Act.

(9) A finding by the Department that the licensee, after having his or her license placed on probationary status, has violated the terms of probation.

(10) Willfully making or filing false records or reports in his or her practice, including, but not limited to, false records filed with State agencies or departments.

(11) Practicing or attempting to practice under a false or, except as provided by law, an assumed name.

(12) An adjudicated finding by the Federal Trade Commission or other federal or State agency that a licensee violated the federal Fair Debt Collection Practices Act or its rules.

(13) Failure to file a return, or to pay the tax, penalty or interest shown in a filed return, or to pay any final assessment of tax, penalty or interest, as required by any tax Act administered by the Illinois Department of Revenue until such time as the requirements of any such tax Act are satisfied.

(14) Using or threatening to use force or violence to cause physical harm to a debtor, his or her family or his or her property.

(15) Threatening to instigate an arrest or criminal prosecution where no basis for a criminal complaint lawfully exists.

(16) Threatening the seizure, attachment or sale of a debtor's property where such action can only be taken pursuant to court order without disclosing that prior court proceedings are required.

(17) Disclosing or threatening to disclose information adversely affecting a debtor's reputation for credit worthiness with knowledge the information is false.

(18) Threatening to initiate communication with a debtor's employer unless there has been a default of the payment of the obligation for at least 30 days and the licensee has given at least 5 days prior written notice of the intention to communicate with the employer to the employee to the last known address of the debtor.

(19) Communicating with the debtor or any member of the debtor's family at such a time of day or night and with such frequency as to constitute harassment of the debtor or any member of the debtor's family. For purposes of this Section the following conduct shall constitute harassment:

(A) Communicating with the debtor or any member of his or her family in connection with the collection of any debt without the prior consent of the debtor given directly to the debt collector, or the express permission of a court of competent jurisdiction, at any unusual time or place or a time or place known or which should be known to be inconvenient to the debtor. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock a.m. and before 9 o'clock p.m. in the debtor's local time.

(B) The threat of publication or publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency.

(C) The threat of advertisement or advertisement for sale of any debt to coerce payment of the debt.

(D) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(20) Using profane, obscene or abusive language in communicating with a debtor, his or her family or others.

(21) Disclosing or threatening to disclose information relating to a debtor's debt to any other person except where such other person has a legitimate business need for the information or except where such disclosure is permitted by law.

(22) Disclosing or threatening to disclose information concerning the existence of a debt which the collection agency knows to be disputed by the debtor without disclosing the fact that the debtor disputes the debt.

(23) Engaging in any conduct that is intended to cause and did cause mental or physical illness to the debtor or his or her family.

(24) Attempting or threatening to enforce a right or remedy with knowledge or reason to know that the right or remedy does not exist.

(25) Failing to disclose to the debtor or his or her family the legally authorized corporate, partnership or proprietary name, or other trade or business name, under which the collection agency is engaging in debt collections.

(26) Using any form of communication which simulates legal or judicial process or which gives the appearance of being authorized, issued, or approved by a governmental agency or official or by an attorney at law when it is not.

(27) Using any badge, uniform, or other indicia of any governmental agency or official except as authorized by law.

(28) Conducting business under any name or in any manner which suggests or implies that the collection agency is a branch of or is affiliated in any way with a governmental agency or court if such collection agency is not.

(29) Failing to disclose, at the time of making any demand for payment, the name of the person to whom the debt is owed and at the request of the debtor, the address where payment is to be made and the address of the person to whom the debt is owed.

(30) Misrepresenting the amount of the debt alleged to be owed.

(31) Representing that an existing debt may be increased by the addition of attorney's fees, investigation fees or any other fees or charges when such fees or charges may not legally be added to the existing debt.

(32) Representing that the collection agency is an attorney at law or an agent for an attorney if he or she is not.

(33) Collecting or attempting to collect any interest or other charge or fee in excess of the actual debt unless such interest or other charge or fee is expressly authorized by the agreement creating the debt unless expressly authorized by law or unless in a commercial transaction such interest or other charge or fee is expressly authorized in a subsequent agreement. Nothing in this paragraph (33) shall prevent a debtor from choosing to make a payment that includes a transaction fee paid by the debtor if (i) the transaction fee does not exceed 3% of the amount of the payment or $4.95 for the transaction, whichever is less, (ii) an option to make the payment at no cost to the debtor is disclosed and offered to the debtor, (iii) the transaction fee is paid on a credit card or debit card transaction and the fee is processed by an entity that is independent and not affiliated with the collection agency, and (iv) the transaction fee paid by the debtor is remitted to the entity that processes the debtor's payment and not to the collection agency. If a contingency or hourly fee arrangement (i) is established under an agreement between a collection agency and a creditor to collect a debt and (ii) is paid by a debtor pursuant to a contract between the debtor and the creditor, then that fee arrangement does not violate this Section unless the fee is unreasonable. The Department shall determine what constitutes a reasonable collection fee.

(34) Communicating or threatening to communicate with a debtor when the collection agency is informed in writing by an attorney that the attorney represents the debtor concerning the debt. If the attorney fails to respond within a reasonable period of time, the collector may communicate with the debtor. The collector may communicate with the debtor when the attorney gives his or her consent.

(35) Engaging in dishonorable, unethical, or unprofessional conduct of a character likely to deceive, defraud, or harm the public.

(b) No collection agency while collecting or attempting to collect a debt shall engage in any of the Acts specified in this Section, each of which shall be unlawful practice.

(Source: P.A. 102-975, eff. 1-1-23.)