New Collection Ordinance in Chicago

While the Federal Government continues to crack down Justice _scaleon
abusive debt collection tactics
the City of Chicago takes its
own stance on the industry.  The City recently passed a new
ordinance governing collector conduct within its city limits, which
takes effect July 1, 2013.   This new ordinance requires
collectors attempting to collect consumer debts
from Chicago residents to be licensed in the State of Illinois and
to comply with all federal and state laws and regulations,
including the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. 1692 et seq., and the Illinois Collection Agency Act, 225
ILCS 425 et seq.

This law, which already exists in several other cities and
states nationwide, is only applicable to the collection of consumer debts
as defined under the FDCPA.  The
FDCPA
defines this as a person or business “who in the ordinary
course of business, on behalf of himself or others, regularly
engages in consumer debt collection.” 15 U.S.C. 1692.  While
this ordinance aims to protect consumers from debt buyers, it
does not branch out to protect consumers from entities already
excluded under the Illinois Collection Agency Act such as banks,
lending institutions, licensed attorneys, credit unions and finance
companies. 

On par with the requirements of the FDCPA, the new ordinance
makes it a requirement to provide written notice to a debtor when
attempting to collect a debt.  The notice must include a
statement regarding the consumer’s opportunity to
dispute the debt
and request validation of the debt. 
Furthermore, the ordinance imposes strict guidelines on collectors
to maintain notes on all communication with debtors, including but
not limited to any payments received and/or payment schedules
agreed upon.  Also in line with the FDCPA, the Chicago
ordinance imposes monetary fines ranging from $250 to $2,500 for a
first time offense and between $500 and $5,000 for any additional
offenses during a 12 month period.  More egregious conduct may
carry a harsher punishment of losing a collectors’ license for four
years prior to reinstatement.  

With its enactment, the City of Chicago has agreed to share any
information it receives regarding collection
agencies
with higher authorities and fully intends to prosecute
collectors who are in violation of the ordinance.  Bottom line
is, collectors beware of any collection efforts not in compliance
with the Chicago ordinance, as you stand to be held accountable
under both City, State and Federal Law. 

If you feel you have been treated unfairly by a collector and
would like a free case review,
please contact SmithMarco P.C. for a
more detailed explanation of your rights pursuant to the
FDCPA.