Page 24 - Sharp-Hundley 2012

addition, it appears that the director must proceed for an injunction under § 14a whenever an agency has
been convicted as a repeat offender under § 14b’s criminal provisions.

Administrative Action. Under § 9 the Department is given the power to
“refuse to issue or renew, or may revoke, suspend, place on probation, reprimand or
take other disciplinary action . . ., including fines not to exceed $5,000 for a first
violation and not to exceed $10,000 for a second or subsequent violation,” for any
violation of the myriad prohibitions in § 9 (see generally Sharp Thinking No. 66 (June
2012). Consumers are permitted to instigate disciplinary
proceedings by filing a written complaint with the Department
(§ 10). However, this results in a somewhat complex hearing process before a
hearing officer and a disciplinary board a majority of the members of which are
employed by registrant collection agencies (§§ 9.22, 13.1, 13.3, 19, 22). While
the Department is not bound to accept the board’s recommendation, it is
obligated to give the board a “written and specific explanation” if it overrules the
recommendation (§ 13.3).

Private Cause of Action. The reader of only the act’s text would conclude that the only remedies
provided for an injured debtor are the right to complain to the Department and the right to seek an
injunction. For example, § 9, by its terms, authorizes only the Department to take action for violation of its
numerous provisions. This inference is bolstered by § 9.7, which, by its terms, authorizes only the
attorney general to enforce indicated violations of the Act under the Consumer Fraud & Deceptive
Business Practices Act, 815 ILCS 505.

However, case law holds that the act authorizes a private cause of action. Sherman
v. Field Clinic, 74 Ill.App.3d 21 (1979); Grant-Hall v. Cavalry Portfolio Serv., LLC, __
F.Supp.2d __, 2012 WL 619651 (N.D. Ill. 2012). See also Randolph v. Crown Asset
Mgmt., LLC, 254 F.R.D. 513 (2008) (approving class-action treatment for private suit).
This line of decisions includes cases arising under § 9. See Kim v. Riscuity, Inc., 2006
WL 2192121 (N.D. Ill. 2006); Trull v. GC Serv. L.P., 961 F.Supp. 1199 (N.D. Ill. 1997). It
even appears to allow recovery of punitive damages in some cases (see Sherman).

However, unlike with the federal Fair Debt Collection Practices Act (see Sharp
Thinking No. 64 (May 2012)), the cases under the state act require that the debtors
have sustained actual injury in order to state a claim under the act. McCabe v.
Crawford & Co., 272 F.Supp.2d 736 (N.D. Ill. 2003). An impact on one’s credit score
is actual injury (Riscuity), as is paying a filing fee to defend against a wrongly-
brought lawsuit (Herkert v. MRC Rec. Corp., 655 F.Supp.2d 870 (N.D. Ill. 2009);
Grant-Hall). Mere attorney fees are not considered actual damages, however
(McCabe; Grant-Hall).

Statute of Limitations. A 5-year statute of limitations applies for actions against registrants
under the act. A continuing violation is assumed to have occurred when it first occurred for these
purposes. § 9.5.

- John T. Hundley, Jhundley@lotsharp.com, 618-242-0246

John\SharpThinking\#67.doc

●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●●
THE SHARP LAW FIRM, P.C.

1115 Harrison, P.O. Box 906, Mt. Vernon, IL 62864 • Telephone 618-242-0246 • Facsimile 618-242-1170

Business Transactions • Litigation • Financial Law • Problem Finances • Real Estate • Corporate • Commercial Disputes • Creditors’ Rights •
Arbitration • Employment Matters • Estate Planning • Probate

Terry Sharp: Tsharp@lotsharp.com; John T. Hundley: Jhundley@lotsharp.com; Bentley J. Bender: Bbender@lotsharp.com.

Advertising Material