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Illinois Collection Agency Laws

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    Licensing

    • Collection laws are regulated by the Illinois Department of Professional Regulation. No collection agency is allowed to operate in Illinois unless it is licensed and maintains an established business address in Illinois. However, an out-of-state collection agency does not need a license if it limits itself to collecting debts from debtors located in Illinois only by means of interstate communication, such as telephone or fax. A license is only granted if the collection agency registers its address and the names of its business owners with the department and if it can demonstrate that none of its owners or operators have ever committed fraudulent acts.

    Bond

    • Prior to receiving a license, the collection agency will have to file and maintain a surety bond with the State of Illinois. This bond must be issued by an insurance company that is authorized to transact business in Illinois. The amount of the bond is at least $25,000. The reason Illinois requires this bond is to protect clients of the collection agency who seek to recoup money that has been recovered by the collection agency. If the bond is rescinded for any reason, or if it is awarded in a court judgment, the collection agency must file a new bond with Illinois or it will lose its license to do business in the state.

    Child Support Collection

    • Collection agencies can generally collect fees or costs that they incur as a result of doing business from the debtors that they collect money from. However, if an agency is collecting child support payments, it may not request a fee or charge, including costs, for these payments. Also, the collection agency cannot evaluate the amount of child support payment owed, but must rely on the amount determined by a court judgment. If the agency does retain any fees or costs, it must provide documentation to the person seeking child support payments, demonstrating that the child support payments resulted from the actions of the agency. It is the person seeking support, or the government, that reimburses the agency for costs incurred.

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