The Illinois House of Representatives introduced House Bill 3352 on March 19, 2025, aiming to amend the Collection Agency Act to provide significant protections for debtors against coerced debts. This legislation seeks to address the growing concern over debts incurred through coercion, fraud, or abuse, ensuring that individuals are not held liable for debts they did not willingly incur.

Key provisions of the bill define "coerced debt" as any debt incurred under duress, intimidation, or through the non-consensual use of personal information, excluding debts secured by real property. The bill allows debtors to assert claims of coerced debt by submitting a Statement of Coerced Debt to collection agencies, which must then cease collection efforts within five days of receiving a complete statement. Collection agencies are required to review the debtor's claims and any supporting information within 90 days, ensuring that the debtor's rights are protected during the process.

Notably, the bill includes provisions for civil liability against collection agencies that violate these regulations, as well as restrictions on waivers that could undermine the protections offered to debtors. The Department of Financial and Professional Regulation is tasked with creating a model verification form to facilitate the reporting of coerced debts, which will be available in multiple languages to accommodate diverse populations in Illinois.

The introduction of House Bill 3352 has sparked discussions among lawmakers and advocacy groups. Supporters argue that the bill is a crucial step toward protecting vulnerable individuals from financial exploitation, particularly those affected by domestic violence or human trafficking. Critics, however, express concerns about the potential burden on collection agencies and the implications for legitimate debt recovery processes.

The bill's passage could have significant social and economic implications, potentially reshaping the landscape of debt collection in Illinois. By providing clear guidelines and protections, it aims to foster a more equitable system for debtors while holding collection agencies accountable for their practices. As the bill moves through the legislative process, its outcomes will be closely monitored by stakeholders across the state.