HB5016 97TH GENERAL ASSEMBLY

LRB097 18247 CEL 63473 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5016

Introduced 2/7/2012, by Rep. Lou Lang

SYNOPSIS AS INTRODUCED:

225 ILCS 425/2	from Ch. 111, par. 2002
225 ILCS 425/8.5 new

Amends the Collection Agency Act. Defines "charge-off date", "collection agency" or "agency", "debt buyer", and "principal balance" or "charge-off balance". Provides that if a debt buyer commences litigation against a debtor, then the debt buyer shall attach to the complaint an affidavit. Provides that a debt buyer shall be subject to all of the terms, conditions, and requirements of the Act, except that a debt buyer shall not be required to (i) file and maintain in force a surety bond; (ii) maintain a trust account; (iii) procure written authorization to refer the account to an attorney for suit; or (iv) adhere to the assignment for collection criteria. Provides that the Attorney General may enforce against debt buyers specified provisions under the Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Effective immediately.

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Collection Agency Act is amended by changing Section 2 and by adding Section 8.5 as follows:

(225 ILCS 425/2) (from Ch. 111, par. 2002)

(Section scheduled to be repealed on January 1, 2016)

Sec. 2. Definitions. In this Act:

"Charge-off date" means the date on which a receivable is treated as a loss or expense.

"Collection agency" or "agency" means any person engaged in the business of collecting or receiving for payment for others of any account, bill, or other indebtedness from a debtor.

"Consumer credit transaction" means a transaction between a natural person and another person in which property, service, or money is acquired on credit by that natural person from such other person primarily for personal, family, or household purposes.

"Consumer debt" or "consumer credit" means money, property, or their equivalent, due or owing or alleged to be due or owing from a natural person by reason of a consumer credit transaction.

"Creditor" means a person who extends consumer credit to a debtor.

"Debt" means money, property, or their equivalent which is due or owing or alleged to be due or owing from a natural person to another person.

"Debt buyer" means any person whose principal business activity is purchasing accounts for value and acquiring all rights in and ownership of a debt.

"Debt collection" means any act or practice in connection with the collection of consumer debts.

"Debt collector", "collection agency", or "agency" means any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in debt collection.

"Debtor" means a natural person from whom a debt collector seeks to collect a consumer debt that is due and owing or alleged to be due and owing from such person.

"Department" means Division of Professional Regulation within the Department of Financial and Professional Regulation.

"Director" means the Director of the Division of Professional Regulation within the Department of Financial and Professional Regulation.

"Person" means a natural person, partnership, corporation, limited liability company, trust, estate, cooperative, association, or other similar entity.

"Principal balance" or "charge-off balance" means an account principal and other legally collectible costs, expenses, and interest that are accrued prior to the charge-off date, less any payments or settlements.

(Source: P.A. 95-437, eff. 1-1-08.)

(225 ILCS 425/8.5 new)

Sec. 8.5. Debt buyers.

(a) The provisions of this Section shall apply to debt buyers. If a debt buyer commences litigation against a debtor, then the debt buyer shall attach to the complaint an affidavit in substantially the following form:

"[CAPTION OF COURT PROCEEDING]

AFFIDAVIT OF ACCOUNT OWNERSHIP

I,............................., being first duly sworn upon my oath, depose and state as follows:

1. I am an employee of ............, the plaintiff in this case and a debt buyer as defined in Section 2 of the Collection Agency Act ("debt buyer").

2. I am authorized to execute this affidavit on behalf of the debt buyer, and I am over the age of 18 and competent to testify as to the matters contained herein.

3. In my capacity as an employee of the debt buyer, I have access to the records maintained in the ordinary course of business of the debt buyer, including the records for and relating to the subject account. Those records include records acquired by the debt buyer at the time it purchased the account from the transferor and records generated by the debt buyer relating to the account since the time it was purchased. I have reviewed or caused to be reviewed those records relating to the account, and I make this affidavit based upon that review and my own personal knowledge of how the records are kept and maintained. The account records generated by the debt buyer are made at or near the time of the event, by or from information transmitted by a person with knowledge of such information. It is the regular practice of the debt buyer to keep such records in the ordinary course of its regularly conducted business activity.

4. The debt buyer owns the account that is the subject of the pending collection action.

5. The debt buyer has filed this case within the applicable statutory period of limitations.

6. The records of the debt buyer reflect that [debtor name(s)], defendant in this case, was issued credit by [creditor name], with an account number of [redacted original account number] and that [creditor name], charged off said account on [charge-off date]. The last payment received on the debtor's account was on [last payment date]. There is a balance due and owing to the debt buyer on this account in the amount of [charge-off balance due] and the debt buyer has not received payment of that balance due.

Further affiant sayeth naught.

..............................

(Signature of Affiant)

Print Name:...................

Print Title:..................

Debt Buyer:...................

SUBSCRIBED AND SWORN TO

Before me, this.....day of .............,......

...............................................

Notary Public".

(b) With respect to its activities as a debt buyer in pursuing the collection of accounts it owns, a debt buyer shall be subject to all of the terms, conditions, and requirements of this Act, except that a debt buyer shall not be required to (i) file and maintain in force a surety bond under Section 8 of this Act; (ii) maintain a trust account under Section 8c of this Act; (iii) procure written authorization to refer the account to an attorney for suit under Section 8a-1 of this Act; or (iv) adhere to the assignment for collection criteria under Section 8b of this Act.

(c) The Attorney General may enforce against debt buyers the provisions identified in Section 9.7 of this Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act.

Section 99. Effective date. This Act takes effect upon becoming law.