How to choose a debt collection agency in Illinois
By Kai Greenspan, Founding Editor · Last updated: September 3, 2026
The surety bond a licensed Illinois collection agency that collects for others must file and keep in force under Section 8 of the Collection Agency Act, for the benefit of creditors who obtain a judgment over money collected and not remitted. The license is cancelled on the day the bond terminates unless a new one is filed, so for such an agency a current license is also evidence of a bond in force. A debt buyer collecting accounts it owns is licensed under the same Act but exempt from the bond.
Source: ilga.gov · Last checked: September 2, 2026
The five steps, in order
| Step | What to do, and why it comes in this order |
|---|---|
| 1. Verify the license on the state's own register | Illinois requires a collection agency operating in the state to hold a license from the Department of Financial and Professional Regulation under the Collection Agency Act, and the Department publishes its license records as open data on the state's portal, back to 1975, with ended licenses kept on the record. Search the legal name there before anything else and find the row recorded as active or on probation with an unexpired term; older rows marked not renewed, cancelled or closed are history, not the current license. If the company has no current Illinois license, ask which state licenses it: an agency collecting into Illinois only by interstate communication from a state where it is licensed, with reciprocity, is lawfully exempt. A blank search is a question, not an answer. |
| 2. Confirm the bond behind the license | Section 8 of the Act requires a licensed agency that collects for others to file and maintain a $25,000 surety bond for the benefit of creditors who obtain a judgment over money the agency collected and did not remit, and the license is cancelled on the day the bond terminates unless a new one is filed. So for a third-party agency a current license is also evidence of a bond in force; a debt buyer collecting accounts it owns is exempt from the bond under Section 8.6. Ask the agency for its bond details in writing all the same, because the bond is what stands behind your money if remittance fails. |
| 3. Match the agency to your debt type | Consumer debt, owed by individuals for personal, family or household purposes, is federally regulated under the FDCPA, and the Act's own conduct rules apply to a collection agency or debt buyer when it collects consumer debt. The Act's definition of a collection agency covers collecting for others, buying debt, and several other activities, so a licensed Illinois agency may be a third-party collector, a debt buyer, or both. Ask which kind of accounts the agency actually works, and whether it collects for clients or buys. |
| 4. Read the public complaint record in context, and check any certifications at source | Search the agency in the CFPB Consumer Complaint Database and read it the way the CFPB advises: complaints are records, not verdicts, larger agencies naturally accrue more, and what matters is the pattern and how the agency responded. Certifications are checked against the issuing body, never the agency’s own claim. The Illinois register also records whether the Department has ever disciplined a licensee; where it has, the Department’s own order is the document to read. |
| 5. Only then talk fees, and get everything in writing | Most collection work is contingency: the agency keeps an agreed share of what it recovers. No trustworthy public benchmark for the percentage exists, so ask each agency for its rate in writing, by debt age band, and pin down the cases that cause disputes: direct payments made to you after placement, part payments, recalled accounts and legal costs. Under the Act an agency may refer your account to an attorney only after notifying you in writing, and you may withhold authorization within five days, so ask how the agency handles that step. |
Step-by-step register instructions: verify an Illinois license. The ranked list built on these measures: Illinois agencies. The register itself: the state’s open data portal.
Source: ilga.gov · Last checked: September 2, 2026
The questions worth asking before you sign
Once an agency has passed the public checks, the remaining risk lives in the agreement, and the disputes that sour agency relationships are rarely about the headline rate. Ask each shortlisted agency, in writing:
- What is your Illinois license number, and when was it originally issued? Both facts are on the register, checkable in under a minute; the number is nine digits beginning 017.
- If you hold no Illinois license, which state licenses you? The interstate exemption needs a home-state license and reciprocity. A genuinely exempt firm can name its state in one sentence.
- Who is your surety, and is the $25,000 bond in force today? The Act cancels a third-party agency’s license when the bond lapses, so the answer should be easy and current; a debt buyer is exempt from the bond, which is itself worth knowing.
- Do you collect for clients, buy debt, or both? The Act licenses all of them as collection agencies, and the answer changes what the relationship is.
- What is your rate, by debt age band, in writing? Ask about direct payments made to you after placement, part payments, recalled accounts and legal costs, because that is where disputes start.
- How do you handle the attorney-referral notice? The Act requires written notice to you before an account goes to a lawyer, and gives you five days to withhold authorization.
Common questions about choosing in Illinois
Does a collection agency have to be licensed in Illinois?
Yes, unless the business is one the Act does not apply to. The Collection Agency Act, 205 ILCS 740, Section 4, says "No collection agency shall operate in this State, directly or indirectly engage in the business of collecting debt, solicit debt claims for others, have a sales office, a client, or solicit a client in this State, exercise the right to collect, or receive payment for another of any debt, without obtaining a license under this Act." Section 4 also exempts an out-of-state agency collecting into Illinois only by interstate communication from a state where it is licensed, with reciprocity, and Section 2.03 lists nineteen kinds of business the Act does not apply to at all, including banks, credit unions, licensed attorneys, insurance companies, and lenders and retail sellers collecting their own accounts.
The agency we want to use is not on the Illinois register. Is that a problem?
It is a question to resolve before you sign. An agency licensed in another state that will collect from your Illinois debtors only by telephone, mail or email from its own offices needs no Illinois license, provided its home state grants the same privilege to Illinois agencies. Ask which state licenses it, check that register, and ask how it would handle an account that needs more than interstate communication. A firm licensed nowhere that cannot name an exemption has not answered the question.
What does the $25,000 bond cover?
Section 8 of the Act says the bond "shall be for the benefit of creditors who obtain a judgment from a court of competent jurisdiction based on the failure of the agency to remit money collected on account and owed to the creditor", and that "No action on the bond shall be commenced more than one year after the creditor obtains a judgment against the collection agency". It is a remedy after a judgment, not a guarantee of performance, and it is capped at the bond amount.
Can an Illinois agency hand our accounts to a lawyer without asking?
Not without notice. Section 8a-1 of the Act says no account may be referred by a collection agency to an attorney unless each account creditor is first notified in writing of the intent to refer it, and the account may not be referred if the creditor notifies the agency within 5 days after receiving the notice that it is withholding authorization. The notice requirement can instead be satisfied if the creditor signs the complaint to be filed in court.
Why does one company have several rows on the Illinois register?
Because the register keeps ended licenses on the record with their statuses and lists a license once for each disciplinary action taken on it. A company licensed for decades may have a current license beside older ones that were not renewed or were closed when the business changed hands. The row that matters is the one recorded as active or on probation with an expiration date still in the future.
Does Debt Collection Index rank Illinois agencies by how much they recover?
No, and no state page on this site does. Recovery rates are self-reported, unaudited and not comparable between agencies, so we do not publish them or rank on them. Illinois agencies are grouped by years continuously licensed on the state register, with every fact sourced and dated, and listed alphabetically within each band.
Related pages
Illinois agencies, ranked
Verified Illinois agencies grouped by years continuously licensed.
Verify an Illinois license
The free five-minute check on the state's register, and who is lawfully exempt.
Illinois debt collection laws
The license rule and the interstate exemption, the bond behind the license, and what collectors may not do, quoted from the Act.
Choose an agency in California
The same five checks, built around the California license.
Choose an agency in Texas
The same five checks, built around the Texas surety bond.