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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois, | ||||||
3 | represented in the General Assembly:
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4 | Section 1. Short title; references to Act. | ||||||
5 | (a) Short title. This Act may be cited as the Educational | ||||||
6 | Planning Services Consumer Protection Act. | ||||||
7 | (b) References to Act. This Act may be referred to as the | ||||||
8 | Segura Law. | ||||||
9 | Section 5. Findings. The General Assembly finds and | ||||||
10 | declares all of the following: | ||||||
11 | (1) It is in the interest of this State to protect | ||||||
12 | Illinois residents and their families from the predatory | ||||||
13 | and deceptive practices of certain educational planning | ||||||
14 | service providers. It is in the public interest to protect | ||||||
15 | all Illinois families, but particularly the most | ||||||
16 | vulnerable families, those who are of lower income, and | ||||||
17 | those without prior college-going experience, from costly, | ||||||
18 | deceptive, and predatory practices that have proliferated | ||||||
19 | as the cost of postsecondary education has risen and | ||||||
20 | anxiety about student loan debt has grown. | ||||||
21 | (2) By charging an upfront premium, these entities can | ||||||
22 | leave these most vulnerable families little or no recourse | ||||||
23 | if they receive no services or if the services that they |
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1 | receive are inadequate. Additionally, many of the services | ||||||
2 | offered by for-profit entities at a premium are readily | ||||||
3 | available at no charge to all students through programs | ||||||
4 | offered by public and not-for-profit organizations, such | ||||||
5 | as the Illinois Student Assistance Commission, a local | ||||||
6 | library, or an institution of higher learning. | ||||||
7 | (3) Families with little knowledge of the college | ||||||
8 | planning process, few financial resources, limited English | ||||||
9 | proficiency, or a combination of these factors are | ||||||
10 | particularly vulnerable to high pressure tactics that may | ||||||
11 | be used to induce them to sign lengthy, highly technical, | ||||||
12 | and costly contracts. Currently, there is no adequate | ||||||
13 | recourse available to help families who have been | ||||||
14 | victimized by opportunistic bad actors. | ||||||
15 | (4) Some educational planning service providers have | ||||||
16 | also provided legally questionable guidance to families | ||||||
17 | who would like to reduce their higher education costs but | ||||||
18 | would not typically qualify for grants based on financial | ||||||
19 | need. Families have been counseled by disreputable | ||||||
20 | educational planning service providers to take extreme and | ||||||
21 | deceptive measures, such as relinquishing their parental | ||||||
22 | responsibilities through a court-ordered legal | ||||||
23 | guardianship so that the child qualifies as an independent | ||||||
24 | student, thereby basing a need calculation on only the | ||||||
25 | student's financial information, allowing the student to | ||||||
26 | qualify for need-based aid. |
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1 | (5) Unrestrained, these types of deceptive practices | ||||||
2 | are a barrier to higher education access and to the ideals | ||||||
3 | of diversity, equity, and inclusion in higher education in | ||||||
4 | this State, and it is in the public interest to regulate | ||||||
5 | them. The Segura Law would be the first step in providing | ||||||
6 | recourse and thereby security to aspiring Illinois college | ||||||
7 | students and their families. | ||||||
8 | Section 10. Purpose and construction. The purpose of this | ||||||
9 | Act is to protect consumers who enter into agreements with | ||||||
10 | educational planning service providers and to regulate | ||||||
11 | educational planning service providers. This Act shall be | ||||||
12 | construed as a consumer protection law for all purposes. This | ||||||
13 | Act shall be liberally construed to effectuate its purpose. | ||||||
14 | Section 15. Definitions. As used in this Act: | ||||||
15 | "Consumer" means any person who purchases or contracts for | ||||||
16 | the purchase of educational planning services. | ||||||
17 | "Educational planning services" means college and career | ||||||
18 | preparatory planning services, including, but not limited to, | ||||||
19 | advice regarding and assistance with college and career | ||||||
20 | searches; college application preparation or submission; | ||||||
21 | financial aid application planning, preparation, or | ||||||
22 | submission; and scholarship searches and applications. | ||||||
23 | "Educational planning service provider" means any person | ||||||
24 | or entity engaging in or holding itself out as engaging in the |
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1 | business of providing educational planning services in | ||||||
2 | exchange for any fee or compensation or any person who | ||||||
3 | solicits or acts on behalf of any person or entity engaging in | ||||||
4 | or holding itself out as engaging in the business of providing | ||||||
5 | educational planning services in exchange for any fee or | ||||||
6 | compensation. "Educational planning service provider" does not | ||||||
7 | include any of the following: | ||||||
8 | (1) A not-for-profit or public institution of higher | ||||||
9 | learning, as defined in the Higher Education Student | ||||||
10 | Assistance Act, and the individuals employed by that | ||||||
11 | institution where educational planning services are | ||||||
12 | provided as part of the financial aid or career counseling | ||||||
13 | services offered by the institution. | ||||||
14 | (2) Public entities and their officers while acting in | ||||||
15 | their official capacities. | ||||||
16 | (3) Persons acting on behalf of a consumer under court | ||||||
17 | order or as a legal representative. | ||||||
18 | "Enrollment fee" or "set up fee" means any fee, | ||||||
19 | obligation, or compensation paid or to be paid by the consumer | ||||||
20 | to an educational planning service provider in consideration | ||||||
21 | of or in connection with establishing a contract or other | ||||||
22 | agreement with a consumer related to the provision of | ||||||
23 | educational planning services. | ||||||
24 | "Maintenance fee" means any fee, obligation, or | ||||||
25 | compensation paid or to be paid by the consumer on a periodic | ||||||
26 | basis to an educational planning service provider in |
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1 | consideration for maintaining the relationship and services to | ||||||
2 | be provided by the educational planning service provider in | ||||||
3 | accordance with a contract with a consumer related to the | ||||||
4 | provision of educational planning services. | ||||||
5 | Section 20. Prohibitions and requirements. | ||||||
6 | (a) It shall be unlawful for any person or entity to act as | ||||||
7 | an educational planning service provider except as authorized | ||||||
8 | by this Act. | ||||||
9 | (b) An educational planning service provider may not | ||||||
10 | provide educational planning services to a consumer for a fee | ||||||
11 | without a written contract signed and dated by both the | ||||||
12 | consumer and the educational planning service provider. A | ||||||
13 | contract between an educational planning service provider and | ||||||
14 | a consumer for the provision of educational planning services | ||||||
15 | shall disclose clearly and conspicuously all of the following: | ||||||
16 | (1) The name and address of the consumer. | ||||||
17 | (2) The date of execution of the contract. | ||||||
18 | (3) The legal name of the educational planning service | ||||||
19 | provider, including any other business names used by the | ||||||
20 | educational planning service provider. | ||||||
21 | (4) The corporate address and regular business | ||||||
22 | address, including a street address, of the educational | ||||||
23 | planning service provider. | ||||||
24 | (5) The telephone number at which the consumer may | ||||||
25 | speak with a representative of the educational planning |
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1 | service provider during normal business hours. | ||||||
2 | (6) A description of the services and an itemized list | ||||||
3 | of all fees to be paid by the consumer for each service and | ||||||
4 | the date, approximate date, or circumstances under which | ||||||
5 | each fee will become due. | ||||||
6 | (7) The contents of the Consumer Notice and Rights | ||||||
7 | Form provided in Section 25 of this Act. | ||||||
8 | (8) A written notice to the consumer that the consumer | ||||||
9 | may cancel the contract at any time until after the | ||||||
10 | educational planning service provider has fully performed | ||||||
11 | each service the educational planning service provider | ||||||
12 | contracted to perform or represented he or she would | ||||||
13 | perform and that the consumer may not be required to pay | ||||||
14 | for services the consumer did not receive and shall be | ||||||
15 | entitled to a full refund of any fees paid for educational | ||||||
16 | planning services not provided. | ||||||
17 | (9) A form the consumer may use to cancel the contract | ||||||
18 | pursuant to this Act. The form shall include the name and | ||||||
19 | mailing address of the educational planning service | ||||||
20 | provider and shall disclose clearly and conspicuously how | ||||||
21 | the consumer can cancel the contract, including applicable | ||||||
22 | addresses, telephone numbers, facsimile numbers, and | ||||||
23 | electronic mail addresses the consumer can use to cancel | ||||||
24 | the contract. Notwithstanding any other provision of this | ||||||
25 | paragraph (9) to the contrary, a consumer's lack of strict | ||||||
26 | adherence to an educational planning service provider's |
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1 | cancellation form or processes does not invalidate a | ||||||
2 | consumer's good faith and reasonable method or form of | ||||||
3 | cancellation. | ||||||
4 | (c) If an educational planning service provider | ||||||
5 | communicates with a consumer primarily in a language other | ||||||
6 | than English, then the educational planning service provider | ||||||
7 | shall furnish to the consumer a translation of all the | ||||||
8 | disclosures and documents required by this Act, including, but | ||||||
9 | not limited to, the contract, in that other language. | ||||||
10 | (d) An educational planning service provider may not | ||||||
11 | charge or receive from a consumer any enrollment fee, set up | ||||||
12 | fee, up-front fee of any kind, or maintenance fee, and a | ||||||
13 | consumer shall pay only for the educational planning services | ||||||
14 | provided. | ||||||
15 | (e) An educational planning service provider may not do | ||||||
16 | any of the following: | ||||||
17 | (1) Represent, expressly or by implication, any | ||||||
18 | results or outcomes of its educational planning services | ||||||
19 | in any advertising, marketing, or other communication to | ||||||
20 | consumers unless the educational planning service provider | ||||||
21 | possesses substantiation for such representation at the | ||||||
22 | time such representation is made. | ||||||
23 | (2) Expressly or by implication, make any unfair or | ||||||
24 | deceptive representations or any omissions of material | ||||||
25 | facts in any of its advertising or marketing | ||||||
26 | communications concerning educational planning services. |
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1 | (3) Advertise or market educational planning services, | ||||||
2 | enter into a contract for educational planning services, | ||||||
3 | or provide educational planning services without making | ||||||
4 | the disclosures required in this Act at the times and in | ||||||
5 | the form and manner as described in this Act. | ||||||
6 | (4) Advise about or represent, expressly or by | ||||||
7 | implication, any unlawful services to be provided or fees | ||||||
8 | to be collected by the educational planning service | ||||||
9 | provider. | ||||||
10 | (5) Advise or represent, expressly or by implication, | ||||||
11 | that consumers pay any fees that are unearned by the | ||||||
12 | educational planning service provider. | ||||||
13 | (6) Advise, encourage, or represent, expressly or by | ||||||
14 | implication, that a consumer provide false or misleading | ||||||
15 | information about financial or other circumstances to gain | ||||||
16 | admission into a higher education institution or to be | ||||||
17 | eligible for student financial aid, including, but not | ||||||
18 | limited to, advising a consumer to petition for the | ||||||
19 | appointment of a guardian for a minor for the primary | ||||||
20 | purpose of reducing the financial resources available to | ||||||
21 | the minor in order to cause the minor to qualify for public | ||||||
22 | or private financial aid. | ||||||
23 | Section 25. Required disclosures. | ||||||
24 | (a) In any marketing or advertising communications, an | ||||||
25 | education planning service provider must provide the following |
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1 | disclosure verbatim, both orally and in writing, with the | ||||||
2 | caption: | ||||||
3 | CONSUMER NOTICE OF AVAILABILITY | ||||||
4 | OF THESE SERVICES FOR FREE | ||||||
5 | Educational planning services of this type are | ||||||
6 | provided free of charge at no cost to you by the Illinois | ||||||
7 | Student Assistance Commission and may also be offered by | ||||||
8 | other public or not-for-profit entities, such as a public | ||||||
9 | library or an institution of higher learning. | ||||||
10 | (b) An educational planning service provider must provide | ||||||
11 | the following warning verbatim, both orally and in writing, | ||||||
12 | with the caption "CONSUMER NOTICE AND RIGHTS FORM" in at least | ||||||
13 | 28-point font and the remaining portion in at least 14-point | ||||||
14 | font, to a consumer before the consumer signs a contract for | ||||||
15 | the educational planning service provider's services: | ||||||
16 | CONSUMER NOTICE AND RIGHTS FORM | ||||||
17 | AVAILABILITY OF THESE SERVICES FOR FREE | ||||||
18 | Educational planning services of this type are | ||||||
19 | provided free of charge at no cost to you by the Illinois | ||||||
20 | Student Assistance Commission and may be offered by other | ||||||
21 | public or not-for-profit entities, such as a public | ||||||
22 | library or an institution of higher learning. |
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1 | YOUR RIGHT TO CANCEL | ||||||
2 | If you sign a contract with an educational planning | ||||||
3 | service provider, you have the right to cancel at any time | ||||||
4 | and receive a full refund of all unearned fees you have | ||||||
5 | paid to the provider. You will not be responsible for | ||||||
6 | payment of services that are not fully performed. | ||||||
7 | IF YOU ARE DISSATISFIED OR YOU HAVE QUESTIONS | ||||||
8 | If you are dissatisfied with an educational planning | ||||||
9 | service provider or have any questions, please bring it to | ||||||
10 | the attention of the Illinois Attorney General's Office. | ||||||
11 | (c) The educational planning service provider must | ||||||
12 | maintain proof that it has provided to the consumer the | ||||||
13 | Consumer Notice and Rights Form in accordance with subsection | ||||||
14 | (b) of this Section. | ||||||
15 | (d) The consumer shall sign and date an acknowledgment | ||||||
16 | form titled "Consumer Notice and Rights Form" that states: "I, | ||||||
17 | the consumer, have received from the educational planning | ||||||
18 | service provider a copy of the form titled "Consumer Notice | ||||||
19 | and Rights Form," and I have been provided the Illinois | ||||||
20 | Student Assistance Commission's Internet website address where | ||||||
21 | educational planning services are provided free of charge.". | ||||||
22 | The educational planning service provider or its | ||||||
23 | representative shall also sign and date the acknowledgment |
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1 | form, which shall include the name and address of the | ||||||
2 | educational planning service provider. The acknowledgment form | ||||||
3 | shall be in duplicate and shall be incorporated into the | ||||||
4 | Consumer Notice and Rights Form under subsection (b) of this | ||||||
5 | Section. The original acknowledgment form shall be retained by | ||||||
6 | the educational planning service provider, and the duplicate | ||||||
7 | copy shall be retained by the consumer. | ||||||
8 | (e) If the acknowledgment form under subsection (d) of | ||||||
9 | this Section is in an electronic format, then, in addition to | ||||||
10 | the other requirements of this Act, the acknowledgment form | ||||||
11 | shall: | ||||||
12 | (1) contain a live link to the Illinois Student | ||||||
13 | Assistance Commission's Internet website where educational | ||||||
14 | planning services are offered free of charge; and | ||||||
15 | (2) be digitally signed by the consumer in compliance | ||||||
16 | with the provisions of the federal Electronic Signatures | ||||||
17 | in Global and National Commerce Act concerning consumer | ||||||
18 | disclosures, including subsection (c) of Section 101 of | ||||||
19 | that Act. | ||||||
20 | Section 30. Cancellation of contract; refund. | ||||||
21 | (a) A consumer may cancel a contract with an educational | ||||||
22 | planning service provider at any time before the educational | ||||||
23 | planning service provider has fully performed each service the | ||||||
24 | educational planning service provider contracted to perform or | ||||||
25 | represented it would perform. |
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1 | (b) If a consumer cancels a contract with an educational | ||||||
2 | planning service provider, then the educational planning | ||||||
3 | service provider shall refund all fees and compensation, with | ||||||
4 | the exception of any earned fees for services provided. | ||||||
5 | (c) At any time upon a material violation of this Act on | ||||||
6 | the part of the educational planning service provider, the | ||||||
7 | educational planning service provider shall refund all fees | ||||||
8 | and compensation to the consumer. | ||||||
9 | (d) An educational planning service provider shall make | ||||||
10 | any refund required under this Act within 5 business days | ||||||
11 | after the notice of cancellation or voiding of the contract | ||||||
12 | due to a violation of this Act and shall include with the | ||||||
13 | refund a full statement of account showing fees received and | ||||||
14 | fees refunded. | ||||||
15 | (e) Upon cancellation or voiding of the contract, all | ||||||
16 | direct debit authorizations granted to the educational | ||||||
17 | planning service provider by the consumer shall be considered | ||||||
18 | revoked and voided. | ||||||
19 | (f) Upon the termination of the contract for any reason, | ||||||
20 | the educational planning service provider shall provide timely | ||||||
21 | notice that it no longer represents the consumer to any entity | ||||||
22 | or agency with whom the educational planning service provider | ||||||
23 | has had any prior communication on behalf of the consumer in | ||||||
24 | connection with the provision of any educational planning | ||||||
25 | services. |
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1 | Section 35. Noncompliance. | ||||||
2 | (a) Any waiver by a consumer of any protection provided by | ||||||
3 | or any right of the consumer under this Act: | ||||||
4 | (1) shall be treated as void; and | ||||||
5 | (2) may not be enforced by any federal or State court | ||||||
6 | or any other person. | ||||||
7 | (b) Any attempt by a person to obtain a waiver from a | ||||||
8 | consumer of any protection provided by or any right or | ||||||
9 | protection of the consumer or any obligation or requirement of | ||||||
10 | the educational planning service provider under this Act is a | ||||||
11 | violation of this Act. | ||||||
12 | (c) Any contract for educational planning services that | ||||||
13 | does not comply with the applicable provisions of this Act: | ||||||
14 | (1) shall be treated as void; and | ||||||
15 | (2) may not be enforced by any federal or State court | ||||||
16 | or any other person. | ||||||
17 | Upon notice of a void contract, a refund by the educational | ||||||
18 | planning service provider to the consumer shall be made as | ||||||
19 | provided under subsections (c), (d), (e), and (f) of Section | ||||||
20 | 30 of this Act. | ||||||
21 | Section 40. Civil remedies; injunction. | ||||||
22 | (a) A violation of this Act constitutes an unlawful | ||||||
23 | practice under the Consumer Fraud and Deceptive Business | ||||||
24 | Practices Act. All remedies, penalties, and authority granted | ||||||
25 | to the Attorney General or State's Attorney by the Consumer |
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1 | Fraud and Deceptive Business Practices Act shall be available | ||||||
2 | to him or her for the enforcement of this Act. | ||||||
3 | (b) A consumer who suffers loss by reason of a violation of | ||||||
4 | this Act may bring a civil action in accordance with the | ||||||
5 | Consumer Fraud and Deceptive Business Practices Act to enforce | ||||||
6 | a provision of this Act. All remedies and rights granted to a | ||||||
7 | consumer by the Consumer Fraud and Deceptive Business | ||||||
8 | Practices Act shall be available to the consumer bringing such | ||||||
9 | an action. The remedies and rights provided for in this Act are | ||||||
10 | not exclusive, but cumulative, and all other applicable claims | ||||||
11 | are specifically preserved. | ||||||
12 | (c) Any contract for educational planning services made in | ||||||
13 | violation of this Act shall be null and void and of no legal | ||||||
14 | effect. | ||||||
15 | (d) To engage in educational planning services in | ||||||
16 | violation of this Act is declared to be inimical to the public | ||||||
17 | welfare and to constitute a public nuisance. The Illinois | ||||||
18 | Student Assistance Commission may, in the name of the people | ||||||
19 | of the State of Illinois, through the Attorney General, file a | ||||||
20 | complaint for an injunction in the circuit court to enjoin | ||||||
21 | such person from engaging in that unlawful business. An | ||||||
22 | injunction proceeding shall be in addition to and not in lieu | ||||||
23 | of penalties and remedies otherwise provided in this Act. | ||||||
24 | Section 45. Notice. The Illinois Student Assistance | ||||||
25 | Commission must make available on its Internet website the |
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1 | most current disclosure of free support, and the educational | ||||||
2 | planning service provider is responsible for providing to the | ||||||
3 | consumer the most current disclosure of free support available | ||||||
4 | on the Commission's Internet website. | ||||||
5 | Section 90. Rules. The Illinois Student Assistance | ||||||
6 | Commission shall adopt and enforce all reasonable rules | ||||||
7 | necessary or appropriate for the administration of this Act.
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8 | Section 900. The Consumer Fraud and Deceptive Business | ||||||
9 | Practices Act is amended by adding Section 2WWW as follows: | ||||||
10 | (815 ILCS 505/2WWW new) | ||||||
11 | Sec. 2WWW. Violations of the Educational Planning Services | ||||||
12 | Consumer Protection Act. Any person who violates the | ||||||
13 | Educational Planning Services Consumer Protection Act commits | ||||||
14 | an unlawful practice within the meaning of this Act. |