The Illinois Attorney General's Office has the legal authority to investigate consumers' complaints filed against creditors who violate the Illinois anti-predatory loan acts. Lenders, consumer credit agencies and collection agencies face criminal and civil penalties for violating the Illinois consumer protection laws. Furthermore, the federal Fair Debt Collection Practices Act, the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Collection Agency Act establish the legal rights Illinois consumers have against deceptive debt collection practices.
Advance-Fee Loan and Tax-Refund Loan Lenders
In an effort to protect Illinois residents against advance-fee loan lenders, the Illinois legislature enacted consumer protection laws prohibiting lenders from charging borrowers advance fees prior to entering into loan agreements with them. The Illinois Attorney General's Office works with the Canadian government to prosecute advance-fee loan lenders who conduct business illegally in Illinois but are registered in Canada. The Illinois Military Lending Act protects active-duty military service members against tax-refund loan lenders who charge more than 36 percent on their loans in exchange for their tax refund-anticipation loans.
Illinois Payday Loan Reform Act of 2005
The Illinois Payday Loan Reform Act of 2005 applies to payday loans after December 7, 2005. According to the act, payday loan lenders cannot enter into business transactions with consumers for more than 45 days and must wait at least seven days before renewing or reissuing subsequent loans.
Payday lenders are required to verify consumers' gross monthly incomes before extending loans to them. They must ensure their loans are less than 25 percent or $1,000, cannot charge more than $15.50 for every $100 loaned and must offer payday loan repayment plans to consumers who are more than 35 days in debt. Additionally, payday loan lenders must defer their collection efforts against military service members deployed for active duty.
Spot-Delivery Loan Lenders
Illinois law protects consumers against spot-delivery loan lenders who are unable to secure financing. Spot-delivery lenders allow car buyers to purchase cars without performing credit checks, and after buyers take delivery of their cars, spot-delivery lenders may reject their loan applications after promising them financing at negotiated interest rates. Feeling pressured to negotiate their loans under different terms, borrowers scramble to find cosigners or agree to different loan terms. Under Illinois law, borrowers have legal rights to return their vehicles when spot-delivery lenders fail to secure financing as promised. After buyers return their vehicles, lenders must return their down payments and trade-in vehicles.
Debt Collections
Debt collectors must comply with Fair Debt Collection Practices Act, the Illinois Consumer Fraud and Deceptive Practices Act and the Illinois Collection Agency Act. Under the three laws, they cannot engage in harassing or unfair collection practices. Although the regulations provide extensive protection to consumers, several important aspects include the prohibitions placed on creditors' conduct. Creditors and third-party credit agencies cannot use threats of violence or false threats against debtors. Furthermore, they may not contact consumers after 9 p.m. or before 8 a.m., unless they obtain specific permission to call them during these hours.
Considerations
Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.
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