At last, consumers who seek debt relief through debt settlement companies will be protected from deceptive and predatory practices that often leave consumers worse off than they were before. Gov. Pat Quinn signed the Debt Settlement Consumer Protection Act (HB 4781) on August 3, ending some of the worst debt settlement industry abuses in Illinois.

Do car dealers charge you an up-front fee before you step onto the lot?  Does a real estate agent to charge you a fee before he or she shows you a home?  Obviously not.  But for years, debt settlement companies have gotten away with charging high fees before providing consumers with any debt relief at all.  That’s about to change, however, as the Illinois General Assembly moved to ensure that debt settlement companies get paid for the work they do, not for the work they promise to do in the future, by passing the Debt Settlement Consumer Protection Act (HB4781).

After Darren Robinson lost his job at a factory, he and his girlfriend Julie Fitzpatrick accrued almost $10,000 in credit card debt paying for living expenses and medical bills. Fitzpatrick found a company online that promised to make them debt free. The couple told the Chicago Tribune that they paid almost $1,500 in fees to the debt settlement company. After a few months, only $2,000 of the debt was settled, and their debts ballooned to $12,000 as collection calls and fees increased.