Page 21 - Sharp-Hundley 2012

Sharp Thinking

No. 66 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. June 2012

State Act Limits Debt Collector Misconduct

In addition to requiring registration with the Department of Financial & Professional Regulation (see
Sharp Thinking No. 65 (June 2012)), the Illinois Collection Agency Act (225 ILCS 425) contains a plethora
of provisions regulating collection agencies’ conduct. Some of these regulate the agency’s relations with
its principal/creditor, but others regulate how agencies may go about attempting to collect the debts
assigned to them. We will focus on the latter as they are more likely to result in claims of concern to
Sharp Thinking readers.

Analogies to FDCPA. Several provisions of the Act
are similar to provisions in the Fair Debt Collection Practices Second of three issues on the
Act, 15 U.S.C. § 1692 et seq. Section 9.1, for example, Collection Agency Act.
imposes restrictions on “location information” contacts similar
to FDCPA § 1692b and § 9.2 parallels FDCPA § 1692c with
respect to communications with the debtor. See generally
Sharp Thinking No. 62 (Apr. 2012). Similarly, § 9.3 parallels § 1692g regarding information which must be
provided in connection with the initial contact (see Sharp Thinking No. 63 (May 2012)).

“Code of Conduct”. The act in effect provides a code of ethics for debt collectors. This is so
because § 9 prohibits, among other things, a collection agency’s:

► practicing under an unapproved name;

► using force or violence to cause physical harm to a debtor, his family or property;

► instigating an arrest or criminal prosecution where no basis lawfully exists;

► threatening 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;

► disclosing false information adversely affecting reputation for credit-worthiness;

► communicating with a debtor’s employer unless there have been a default for at least 30 days and
at least 5 days’ prior written notice to the employee, except as permitted by law or court order;

► communicating with the debtor or any member of debtor’s family at such time of day and with such
frequency as to constitute harassment;

► using profane, obscene or abusive language;

► disclosing information about the debt to another person except where such person has a legitimate
business need for it or disclosure is regulated by law;

► disclosing information known to be reasonably disputed without disclosing it is disputed;

► engaging in conduct which the director of the Department of Financial & Professional Regulation
finds was intended to cause and did cause mental or physical illness to the debtor or his family;

► attempting to enforce a right or remedy with reason to know the right or remedy does not exist;

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Sharp Thinking is an occasional newsletter of The Sharp Law Firm, P.C. addressing developments in the law which may be of interest. Nothing contained in Sharp
Thinking shall be construed to create an attorney-client relation where none previously has existed, nor with respect to any particular matter. The perspectives herein
constitute educational material on general legal topics and are not legal advice applicable to any particular situation. To establish an attorney-client relation or to obtain legal
advice on your particular situation, contact a Sharp lawyer at the phone number or one of the addresses provided on page 2 of this newsletter.