Illinois House Bill 3352 is making waves in the legislature, aiming to redefine the landscape of debt collection practices in the state. Introduced on March 19, 2025, by Representative Kelly M. Cassidy, this bill seeks to protect consumers from what it terms "coerced debt," a significant issue that has long plagued individuals facing aggressive collection tactics.

At its core, HB3352 stipulates that debtors are not liable for coerced debts, allowing them to assert this claim by submitting a Statement of Coerced Debt to collection agencies. This statement can be delivered either orally or in writing, and the bill outlines specific provisions for how collection agencies must respond. Notably, upon receiving a complete statement, agencies are required to halt any collection efforts within five days, including refraining from lawsuits or arbitration, and must notify credit reporting agencies of the dispute.

The bill also establishes a framework for civil liability against collection agencies that violate these provisions, aiming to hold them accountable for unethical practices. Additionally, it mandates that the Department of Financial and Professional Regulation create a model verification form to assist consumers in asserting their rights, ensuring accessibility in multiple languages.

While the bill has garnered unanimous support from its Democratic sponsors, it has sparked debates about the implications for the debt collection industry. Critics argue that the bill could hinder legitimate collection efforts and complicate the recovery of debts, while supporters emphasize the need for consumer protection in an often predatory environment.

The potential economic implications are significant, as the bill could reshape how collection agencies operate, possibly leading to increased costs for businesses that rely on these services. Socially, it aims to empower consumers, providing them with tools to combat coercive practices that disproportionately affect vulnerable populations.

As HB3352 moves forward in the legislative process, its passage could mark a pivotal shift in Illinois' approach to debt collection, setting a precedent that may influence similar legislation in other states. The coming weeks will be crucial as lawmakers weigh the balance between protecting consumers and ensuring the viability of the debt collection industry.