Page 23 - Sharp-Hundley 2012

Sharp Thinking

No. 67 Perspectives on Developments in the Law from The Sharp Law Firm, P.C. July 2012

State Act Permits Suit Against Debt Collectors

Violations May Result in Criminal Prosecution, Administrative Action, Private Suits

On its face, the Illinois Collection Agency Act (225 ILCS 425) threatens violators with significant
criminal, administrative and other sanctions for violations of the myriad provisions summarized in Sharp
Thinking Nos. 65 and 66 (June 2012). Less obvious, but equally real, is the threat of civil lawsuits by the
debtors subject to collection activity.

Criminal Provisions. Collection activity without regis-
tration is a Class A misdemeanor. § 14. The offense
becomes a Class 4 felony on repetition. § 14b. In addition, an Third of three issues on the
agency commits a deceptive collection practice when, with Collection Agency Act.
intent to collect a debt, the collector:

(a) represents falsely that he is an attorney, a
policeman, a sheriff or deputy sheriff, a bailiff, a
county clerk or employee of a county clerk’s office, or any other person who by statute is
authorized to enforce the law or any order of a court; or

(b) while attempting to collect an alleged debt, misrepresents to the alleged debtor or to his
immediate family the corporate, partnership or proprietary name or other trade or business
name under which the debt collector is engaging in debt collections and which he is legally
authorized to use; or

(c) while attempting to collect an alleged debt, adds to the debt any service charge, interest or
penalty which he is not entitled by law to add; or

(d) threatens to ruin, destroy, or otherwise adversely affect an alleged debtor’s credit rating unless,
at the same time, a disclosure is made in accordance with federal law that the alleged debtor
has a right to inspect his credit rating; or

(e) accepts from an alleged debtor a payment which he knows is not owed.

Such a deceptive collection practice is punishable by a fine of up to $3,000. 720 ILCS 5/17-5.

In addition, any violation of the act for which no specific penalty is provided is punishable as a Class A
misdemeanor on first offense and as a Class 4 felony upon repeat offenses. § 14b.

The law generally allows a sentence of 1 to 3 years for a Class 4 felony,
and/or a fine. A Class A misdemeanor generally is punishable by a term of
less than 1 year, and/or a fine of up to $2,500. 730 ILCS 5/5-4.5-45, 5/5-4.5-
50, 5/5-4.5-55, 5/5-4.5-70.

Injunctive Provisions. The director of the Department of Financial & Professional Regulation, the
attorney general, the state’s attorneys, and “any person” are authorized to commence an action for
injunctive relief against an agency engaging in collection activity without required registration. § 14a. In

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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.