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New Chicago Collection Agency Ordinance

Michael Agruss

Written and Reviewed by Michael Agruss

  • Managing Partner and Personal Injury Lawyer at Mike Agruss Law.
  • Over 20 years of experience in Personal Injury.
  • Over 8000+ consumer rights cases settled.
  • Graduated from the University of Illinois Chicago School of Law: Juris Doctor, 2004.

New Chicago Collection Agency Ordinance

As of July 1, 2013, collection agencies pursuing debts from Chicago residents must be licensed and comply with all federal and state laws and regulations, including the Fair Debt Collection Practices Act and the Illinois Collection Agency Act. The City of Chicago recently passed this new ordinance, which requires every location where a collection agency operates to be licensed.The statute applies only to consumer debt collection agencies; banks, lending institutions, licensed attorneys at law, credit unions, loan and finance companies, and others are exempt (these businesses were already exempt under the Illinois Collection Agency Act). Chicago’s ordinance will require debt collectors to provide written notice to people, like the FDCPA requires, and also mandates specific items be included when the debt collector responds to a request for verification. Debt collectors, notoriously sloppy with paperwork, will have to keep thorough records of all written communications with debtors, details of each payment they receive, copies of all debt payment schedules with debtors, and explicit debt purchase information.This new law carries serious penalties for violators; daily fines range from $250.00 to $2,500.00 for a first offense, and $500.00 to $5,000.00 for second and further violations during a 12-month period. License revocation and a four-year waiting period for reinstatement are also possible repercussions for offenders. The City of Chicago has also announced it has agreed to share debt collection information and resources with the Consumer Finance Protection Bureau, and will take action against businesses that violate the city’s new law, and/or state and federal consumer protection laws.If a collection agency has harassed you, you may be entitled to money damages up to $1,000.00, based on the FDCPA, which has been around for almost 35 years. The FDCPA is a federal law that applies to every state. In other words, everyone is protected by the FDCPA. The FDCPA is essentially a laundry list of what debt collectors can and cannot do while collecting a debt, as well as things debt collectors must do while collecting a debt. Plus, the FDCPA has a fee-shift provision. This means, the collection agency pays your attorney’s fees and costs. Founding attorney, Michael Agruss, has settled over 1,500 debt collection harassment cases. We want to help you, too. 

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