- Illinois Appellate Court Holds That the ICAA § 8b Requirements Apply to All Assignments For Collection in the Chain of Title
- July 19, 2013 | Author: John P. Ryan
- Law Firm: Hinshaw & Culbertson LLP - Chicago Office
Plaintiff debt collector, as assignee for collection, sued defendant consumer to collect money that the consumer owed on his defaulted credit card account. The trial court dismissed the collection complaint because the requirements of Illinois Collection Agency Act (ICAA) § 8b apply to all assignments in the chain of title. The appellate court affirmed, finding that the debt collector failed to establish the requirements of Section 8b.
The court ruled that Section 8b applies to every contract for collection in the chain of title. Therefore, a collection agency must establish the account assigned, the effective date of the assignment, and the consideration for the assignment in order to comply with Section 8b. The court found that the debt collector failed to meet the requirements of Section 8b because the redacted copies of its assignment to collect the consumer’s account did not show consideration nor the account information for the assignment.
Prior to reaching its holding on Section 8b, the court provided extensive dicta regarding the pleading requirements for both debt buyers and collection agencies under Illinois law. The court stated that 735 ILCS 5/2-403 applies to both debt buyers and collection agencies. A plaintiff debt collector meets its burden under Section 2-403 by filing a verified complaint or an affidavit that explains how and when each entity in the chain acquired title. A plaintiff must meet the requirements under Section 2-403 to have standing. In addition to the Section 2-403 pleading requirements, a collection agency must also allege facts showing that it can meet the requirements of ICAA § 8b. The court stated that for a collection agency to have standing, it must allege that the account was assigned to it, the effective date of the assignment, and the consideration for the assignment.
The additional requirements of Section 8b only apply to assignments for collection. Section 8b requirements do not apply to debt buyers as they are explicitly exempt from the requirements under the statute.
Unifund CCR Partners v. Shah, 2013 IL App (1st) 113658