Updated license requirements have reached the Illinois Collection Agency Act along with a 10-year expansion of the Act itself. The new laws will stay into effect through Jan. 1, 2026. There were some major changes that occurred for the legislation that may make ripples throughout the industry. Some major changes to note: all references to debt collectors were removed from the Collection Agency Act. The act also changes the definition of the “debtor” that states the Act applies to both commercial and consumer collection efforts.
License and Communication Requirements
Although major provisions of the Collection Agency Act in the areas of restoration, expiration, and renewal remain the same, the revisions have no significant impact on many of the state’s current communication requirements or prohibited practices. The Illinois Collection Agency Act now requires collection agencies give the name and address of the original creditor in the initial notice sent to the debtor.
Validation of Debts
Currently, the debt collector or agency may send the debtor a written notice with several disclosures within five days after the initial communication. The major notices are as follows:
(1) The amount of the debt.
(2) The name of the creditor.
(3) Notification that the debt will be assumed valid unless the debtor, within 30 days after receipt of the notice, disputes the validity of the debt.
(4) Within the 30–day period, debt the collector or agency will give the debtor the name and address of the original creditor.
A collection agency with an expired license can reinstate the renewal license within 5 years.
In addition the civil penalty for acting as a collection agency without a license was increased from $5,000 to $10,000.
If a collection agency’s practices “constitute an imminent danger to the public,” the Secretary of Financial and Professional Regulation can suspend their license without a hearing.
The recent changes in Illinois’ Collection Agency Act could be modeled across the country. This could make it more difficult for collection agencies to perform their duties. eMerchantBroker.com is the preferred processor for Collections Max, and Industry Leading Collections Software. We have assisted thousands of collection agencies and will acquire the collection agency merchant account that will help your profits grow.