Illinois Attorney General Cracks Down on Debt Collectors

When you owe a substantial amount of debt to one or more lenders, you may not always know if you are being treated fairly by debt collectors. Under the Fair Debt Collection Practices Act (FDCPA), consumers are protected from certain kinds of communication with debt collectors, and the law also prohibits debt collectors from engaging in conduct that is abusive or harassing. In addition, the FDCPA prohibits debt collector from making false, deceptive, or misleading representations to consumers when attempting to collect on debts. However, debt collectors do not always abide by the terms set out in the FDCPA.
According to a recent article in The Wall Street Journal, several states—including Illinois—have begun cracking down on debt collectors who have violated the FDCPA.
Abusive Debt Collection Practices Result in Agency Closures
The message of the crackdown on debt collectors is one that emphasizes government regulators will not put up with abusive debt collection practices. Both federal and state authorities have underscored that “they are intensifying a crackdown on abusive collection practices against borrowers,” and that intensification recently resulted in four debt collection companies getting shut down.
The Federal Trade Commission (FTC) is heavily involved in this work, and it noted that the closure of these debt collection agencies is part of a larger “new national campaign” that involves “state partners to rein in debt collectors that use tactics such as harassing phone calls and threats of litigation.” The recent closure of these four agencies is not the beginning of this work. Indeed, since October 1 alone, “federal and local regulators have brought 30 new law-enforcement actions against such companies.” The national campaign has support from numerous states, including from Illinois Attorney Lisa Madigan.
The four recent shutdowns occurred in two separate phases. Two of the companies stopped engaging in debt collection after the FTC sought a court order to close the companies. The other two companies came to a settlement agreement with the FTC, which involves closing their doors.
Illinois Debt Collection Company Targeted
One of the debt collection companies closed as a result of the recent crackdown includes K.I.P. LLC, an agency run by a couple in Illinois. This company was not one of the ones to shut down based on a federal court order, but rather is one of the agencies that came to a settlement agreement with the FTC. According to the article, K.I.P. LLC has agreed to pay $6.4 million for abusive debt collection practices.
The FTC’s campaign to limit abusive debt collection practices remains an aim of the Consumer Financial Protection Bureau (CFPB), an agency that has also “taken enforcement actions against the debt collection industry this year.” Commentators suggest that the FTC’s continued willingness to listen to consumer complaints and to act upon information about abusive debt collection practices should be taken as a good sign by consumers.
Contact an Oak Park Consumer Protection Lawyer
While the FTC and CFPB are helping to prevent consumers from abusive, harassing, and misleading debt collection practices, it is important to be aware of your rights. If you have been treated unfairly by a debt collector, you may be able to file a lawsuit. You should discuss your case with an experienced Oak Park consumer protection attorney at the Emerson Law Firm as soon as possible. Contact us today to learn more about our services.
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