Some consumers in Illinois, who have been sued to collect on their unpaid debts, are going to jail. Debtor's prison was officially abolished several decades ago, but some unscrupulous businesses are apparently finding loopholes in which those that owe them money are sent to jail when a debt is not satisfied. A hearing will be held in Alton tomorrow afternoon, and anyone who has dealt with aggressive debt collectors is urged to attend.
Illinois Department of Financial and Professional Regulation spokesman Sue Hofer says many of these companies are exploiting the state's judicial system.
She says this practice occurs most commonly in southern Illinois. The types of debts involved include loans, retail purchases or medical equipment, and medical bills. The IDFPR is hoping to hear from residents, credit counselors and legal service providers in an effort to address this growing trend. The meeting will be held tomorrow at 2pm at the Alton City Hall in Council Chambers.
On June 22, 2010, the Department revoked the license of Easy Money Express Co., a licensee under the Consumer Installment Loan Act, for "distorting and exploiting certain legitimate but extraordinary measures available in civil actions to seek and obtain the arrest and incarceration of small claims debtors." The Department and the company reached a confidential settlement of their dispute in that matter.
The Department issued subpoenas to Marion Quick Cash, Heights Finance, and Security Finance Corporation in July 2010 requiring the companies to "produce documents regarding borrowers who were incarcerated as the direct or indirect result of loans" that they issued. The companies responded by suing the Department. The cases are still pending.
Beginning on October 28, 2011 the Department hosted a series of meetings to gather input from various perspectives. Meetings were held with collection attorneys, representatives of the banking and credit union industry, and representatives of the payday loan and installment loan industry. A meeting with consumer advocacy groups is scheduled for January 23, 2012