New law on debt settlement in Illinois
On the 3rd of August, Illinois Governor Pat Quinn introduced a bill as law which outlines some rules and guidelines for the debt settlement scams. According to the Governor, many debt settlement companies take undue advantage of people in debt. Thus, he introduced this law to protect consumers trying to get rid of debt.
This law will be known as the Debt Settlement Consumer Protection Act, and will also set up a fund and the money from that fund will be given to those people who have lost money through debt settlement companies. This law aims at curbing the business of the scam companies, and thus saving the people from losing more money.
The law includes provisions like:
- The debt settlement company cannot make any false promises to get a person enrolled in their service.
- The law provides Illinois the power to issue administrative penalties, suspend, fine, investigate, revoke, deny, and even issue a cease and desist order to the debt settlement company.
- The law limits the upfront fees to $50.
- The law also mentions that the settlement agreement fees cannot exceed the principal amount.
- The settlement fees have been capped by the law at 15% of the consumer’s savings.
- The law gives the consumer the power to cancel the contract at any time, and also makes him eligible to get a refund of the fees in such a case.
This law will hopefully give some respite to the people in Illinois from the debt settlement scams.