When elephants fight, the grass trembles. — African Folk SayingFor the past several years, Illinois Attorney General ("IAG"), Lisa Madigan, and the State of Illinois have conducted a campaign against companies that purport to assist distressed homeowners and debtors in dealing with their debt situation.1 The primary weapons in the IAG's arsenal are two statutes: the Mortgage Rescue Fraud Act, 765 ILCS 940/1 et seq. (eff. Jan. 1, 2007) ("MRFA"); and, the Debt Settlement Consumer Protection Act, 225 ILCS 429/1 et seq. (eff. Aug. 3, 2010) ("DSCPA").Caught In The Cross-Fire Lawyers Run Afoul of The Illinois Attorney General Providing Debt Settlement ServicesBy Joseph R. Marconi 2These statutes aim to address the allegation that many of these companies do not provide actual relief to debtors but rather worsen their situation through undeserved and excessive fees (while making fraudulent or misleading claims in the process). Among other restrictions and requirements, the statutes limit fees, including the taking of "up front" fees. See, 765 ILCS 940/50(1); 225 ILCS 429/125(a) and (b).3 The IAG's office is aggressively pursuing actions based on two laws.
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