103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4507

 

Introduced 1/31/2024, by Rep. Debbie Meyers-Martin

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Credit Services Organizations Act. Changes the name of the Act to the Credit Repair Organizations Act. Provides that the Director of Financial and Professional Regulation shall oversee the activities of credit repair organizations and compliance with the Act. Provides that a credit repair organization shall submit a report every 6 months to the Director containing specified information. Provides that every credit repair organization shall maintain a surety bond or electronic surety bond in the principal sum of $100,000 issued by a bonding company authorized to do business in this State and approved by the Secretary. Provides that the bond shall run to the Secretary and shall be for the benefit of any consumer who incurs damages as a result of any violation of the Act or rules adopted under the Act. Makes changes in provisions concerning contracts between a buyer and a credit repair organization and registration of credit repair organizations. Inserts provisions concerning the transfer of records; rulemaking; regulatory assessment; evasion; examination and reports; violations; enforcement; confidential supervisory information; judicial review; buyer and a credit repair organization; registration of credit repair organizations; violations of the Act; remedies; and conflicts of law. Repeals provisions concerning construction of the Act and surety bonds. Provides that the Director may adopt rules necessary to administer the Act. Defines terms. Repeals provisions concerning surety bonds. Amends the Consumer Fraud and Deceptive Business Practices Act. Provides that any person who violates the Credit Repair Organizations Act commits an unlawful practice within the meaning of the Act. Effective January 1, 2025.


LRB103 37020 SPS 67135 b

 

 

A BILL FOR

 

HB4507LRB103 37020 SPS 67135 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Consumer Fraud and Deceptive Business
5Practices Act is amended by changing Section 2Z and by adding
6Section 2EEEE as follows:
 
7    (815 ILCS 505/2Z)  (from Ch. 121 1/2, par. 262Z)
8    Sec. 2Z. Violations of other Acts. Any person who
9knowingly violates the Automotive Repair Act, the Automotive
10Collision Repair Act, the Home Repair and Remodeling Act, the
11Dance Studio Act, the Physical Fitness Services Act, the
12Hearing Instrument Consumer Protection Act, the Illinois Union
13Label Act, the Installment Sales Contract Act, the Job
14Referral and Job Listing Services Consumer Protection Act, the
15Travel Promotion Consumer Protection Act, the Credit Services
16Organizations Act, the Automatic Telephone Dialers Act, the
17Pay-Per-Call Services Consumer Protection Act, the Telephone
18Solicitations Act, the Illinois Funeral or Burial Funds Act,
19the Cemetery Oversight Act, the Cemetery Care Act, the Safe
20and Hygienic Bed Act, the Illinois Pre-Need Cemetery Sales
21Act, the High Risk Home Loan Act, the Payday Loan Reform Act,
22the Predatory Loan Prevention Act, the Mortgage Rescue Fraud
23Act, subsection (a) or (b) of Section 3-10 of the Cigarette Tax

 

 

HB4507- 2 -LRB103 37020 SPS 67135 b

1Act, subsection (a) or (b) of Section 3-10 of the Cigarette Use
2Tax Act, the Electronic Mail Act, the Internet Caller
3Identification Act, paragraph (6) of subsection (k) of Section
46-305 of the Illinois Vehicle Code, Section 11-1431, 18d-115,
518d-120, 18d-125, 18d-135, 18d-150, or 18d-153 of the Illinois
6Vehicle Code, Article 3 of the Residential Real Property
7Disclosure Act, the Automatic Contract Renewal Act, the
8Reverse Mortgage Act, Section 25 of the Youth Mental Health
9Protection Act, the Personal Information Protection Act, or
10the Student Online Personal Protection Act commits an unlawful
11practice within the meaning of this Act.
12(Source: P.A. 100-315, eff. 8-24-17; 100-416, eff. 1-1-18;
13100-863, eff. 8-14-18; 101-658, eff. 3-23-21.)
 
14    (815 ILCS 505/2EEEE new)
15    Sec. 2EEEE. Violations of the Credit Repair Organizations
16Act. Any person who violates the Credit Repair Organizations
17Act commits an unlawful practice within the meaning of this
18Act.
 
19    Section 10. The Credit Services Organizations Act is
20amended by changing Sections 1, 2, 3, 5, 6, 7, 8, 9, 11, 12,
2114, and 15 and by adding Sections 5.4, 5.5, 7.1, 9.5 17, 17.5,
2218, 19, 20, 21, 22, and 23 as follows:
 
23    (815 ILCS 605/1)  (from Ch. 121 1/2, par. 2101)

 

 

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1    Sec. 1. This Act shall be known and may be cited as the
2"Credit Repair Services Organizations Act".
3(Source: P.A. 85-1384.)
 
4    (815 ILCS 605/2)  (from Ch. 121 1/2, par. 2102)
5    Sec. 2. The General Assembly finds and declares that:
6    (a) The ability to obtain and use credit has become of
7great importance to consumers who have a vital interest in
8establishing and maintaining their credit worthiness and
9credit standing. As a result, consumers who have experienced
10credit problems may seek assistance from credit repair service
11businesses which offer to improve the credit standing of such
12consumers. Certain advertising and business practices of some
13companies engaged in the business of credit repair services
14have worked a financial hardship upon the people of this
15State, often on those who are of limited economic means and
16inexperienced in credit matters.
17    (b) The purpose of this Act is to provide prospective
18consumers of credit repair organizations services companies
19with the information necessary to make an informed decision
20regarding the purchase of those services and to protect the
21public from unfair or deceptive advertising and business
22practices.
23(Source: P.A. 85-1384.)
 
24    (815 ILCS 605/3)  (from Ch. 121 1/2, par. 2103)

 

 

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1    Sec. 3. As used in this Act:
2    (a) "Buyer" or "consumer" means an individual who is
3solicited to purchase or who purchases the services of a
4credit repair services organization. "Buyer" or "consumer"
5includes an individual for whom the services of a credit
6repair organization are purchased.
7    (b) "Consumer reporting agency" has the meaning assigned
8by Section 603(f), Fair Credit Reporting Act (15 U.S.C.
9Section 1681a(f)).
10    (c) "Extension of Credit" means the right to defer payment
11of a debt or to incur a debt and defer its payment that is
12offered or granted primarily for personal, family, or
13household purposes.
14    (d) "Credit Repair Services Organization" means any a
15person who sells, provides, performs, or represents that such
16person can or will sell, provide, or perform any service, with
17respect to the extension of credit by others and in return for
18the payment of money or other valuable consideration, for
19provides, or represents that the express or implied purpose of
20person can or will provide, any of the following services:
21        (i) improving a buyer's credit record, history, or
22    rating;
23        (ii) (blank); or obtaining an extension of credit for
24    a buyer; or
25        (iii) providing advice or assistance to a buyer with
26    regard to activity or service described in item either

 

 

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1    subsection (i) or (ii).
2    "Credit repair organization Services Organization" does
3not include any of the following:
4        (i) any creditor, with respect to any consumer, a
5    person authorized to the extent make loans or extensions
6    of credit under the creditor is assisting laws of this
7    State or the consumer United States who is subject to
8    restructure an extension of credit owed regulation and
9    supervision by this State or the consumer to the creditor
10    United States, or a lender approved by the United States
11    Secretary of Housing and Urban Development for
12    participation in a mortgage insurance program under the
13    National Housing Act (12 U.S.C. Section 1701 et seq.);
14        (ii) a bank or savings and loan association whose
15    deposits or accounts are eligible for insurance by the
16    Federal Deposit Insurance Corporation or the Federal
17    Savings and Loan Insurance Corporation, or a subsidiary of
18    such a bank or savings and loan association;
19        (iii) a credit union doing business in this State;
20        (iv) a bona fide nonprofit organization exempt from
21    taxation under Section 501(c)(3) of the Internal Revenue
22    Code of 1986, provided that such organization does not
23    charge or receive any money or other valuable
24    consideration for assisting prior to or upon the execution
25    of a specific contract or other agreement between the
26    buyer and the nonprofit organization;

 

 

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1        (v) a person licensed as a real estate broker by this
2    state if the person is acting within the course and scope
3    of that license;
4        (vi) a person licensed to practice law in this State
5    solely when engaged in the practice of law acting within
6    the course and scope of the person's practice as an
7    attorney;
8        (vii) a broker-dealer registered with the Securities
9    and Exchange Commission or the Commodity Futures Trading
10    Commission acting within the course and scope of that
11    regulation;
12        (viii) a consumer reporting agency; and
13        (ix) a licensed debt management service:
14            (1) providing debt management services, as defined
15        in the Debt Management Service Act;
16            (2) acting within the course and scope of its debt
17        management service license;
18            (3) that does not charge any fee for the services
19        of a credit repair organization; and
20            (4) that does not hold itself out as providing the
21        services of a credit repair organization;
22        (x) a licensed debt settlement provider:
23            (1) providing debt settlement services, as defined
24        in the Debt Settlement Consumer Protection Act;
25            (2) acting within the course and scope of its debt
26        settlement service license;

 

 

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1            (3) that does not charge any fee for the services
2        of a credit repair organization; and
3            (4) that does not hold itself out as providing the
4        services of a credit repair organization; and
5        (xi) a residential mortgage loan broker or banker who
6    is duly licensed under the Illinois Residential Mortgage
7    License Act of 1987 and acting within the course and scope
8    of that regulation.
9    (e) "Person" means an individual, sole proprietorship,
10corporation, partnership, joint venture, or any business
11entity.
12    (f) "Consumer report" has the meaning assigned by Section
131681a(d) of the Fair Credit Reporting Act (15 U.S.C. Section
141681a(d)).
15    (g) "Contract start date" means the date the consumer
16entered into a contract with a credit repair organization.
17    (h) "Creditor" has the meaning assigned by Section 103 of
18the Truth in Lending Act (15 U.S.C. Section 1602(g)).
19    (i) "Department" means the Department of Financial and
20Professional Regulation.
21    (j) "Permanent change" means any removal of negative items
22from a consumer's credit report or any change that turns a
23negative item on a consumer's credit report into a neutral or
24positive item that remains in place for at least 6 months.
25    (k) "Secretary" means the Secretary of Financial and
26Professional Regulation or the Secretary's designee.

 

 

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1(Source: P.A. 88-120.)
 
2    (815 ILCS 605/5)  (from Ch. 121 1/2, par. 2105)
3    Sec. 5. No credit repair services organization, its
4salespersons, agents, officers, or representatives, or any
5independent contractor who sells or attempts to sell the
6services of a credit repair services organization shall:
7        (1) Charge or receive any money or other valuable
8    consideration prior to: full and complete performance
9            (A) achieving a permanent change for a buyer;
10            (B) demonstrating achievement of the permanent
11        change by providing the buyer with:
12                (i) a copy of the buyer's credit report pulled
13            on or before the contract start date;
14                (ii) a second copy of the buyer's credit
15            report, pulled after the contract start date, that
16            shows the change for which the buyer is to be
17            charged if the change persists for 6 months; and
18                (iii) a third copy of the buyer's credit
19            report, pulled 6 months after the issuance of the
20            copy described in item (ii), that shows that the
21            change described in item (ii) is a permanent
22            change; and of the services the credit services
23            organization has agreed to perform for or on
24            behalf of the buyer, unless the credit services
25            organization has, in conformity with Section 10 of

 

 

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1            this Act, obtained
2            (C) obtaining a surety bond in compliance with
3        Section 5.4 of this Act issued by a surety company
4        licensed to do business in this State. If a credit
5        services organization is in compliance with this
6        subsection the salespersons, agents, and
7        representatives who sell the services of such
8        organization shall not be required to obtain the
9        surety bond provided for by this Act.
10        (1.5) Fail to contemporaneously provide a buyer with a
11    copy of all communications sent to a credit reporting
12    agency on a buyer's behalf.
13        (2) Charge, pay, offer, or receive any money,
14    discount, or other valuable consideration solely for the
15    referral of a buyer to or from a credit repair
16    organization a retail seller who will or may extend credit
17    to the buyer if such extension of credit is in
18    substantially the same terms as those available to the
19    general public.
20        (2.5) Represent changes that do not meet the
21    definition of permanent change as successful results in
22    advertisements.
23        (3) Make, or advise any buyer to make, any statement
24    that is untrue or misleading, or that should be known by
25    the exercise of reasonable care to be untrue or
26    misleading, with respect to a buyer's credit reporting

 

 

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1    agency or to any person who has extended credit to a buyer
2    or to whom a buyer has made application for an extension of
3    credit.
4        (4) Make or use any untrue or misleading
5    representations in the advertising, offer, or sale of the
6    services of a credit repair services organization or
7    engage .
8        (5) Engage, directly or indirectly, in any act,
9    practice or course of business reasonably likely intended
10    to defraud or deceive a buyer in connection with the
11    officer office or sale of such services; including but not
12    limited to: the amount or type of credit a consumer can
13    expect to receive as a result of the performance of the
14    services offered; the qualifications, training or
15    experience of its personnel; or the amount of credit
16    improvement the consumer can expect to receive as a result
17    of the services.
18(Source: P.A. 85-1384.)
 
19    (815 ILCS 605/5.4 new)
20    Sec. 5.4. Surety bond. Every credit repair organization
21shall maintain a surety bond or electronic surety bond in the
22principal sum of $100,000 issued by a bonding company
23authorized to do business in this State and approved by the
24Secretary. The bond shall run to the Secretary and shall be for
25the benefit of any consumer who incurs damages as a result of

 

 

HB4507- 11 -LRB103 37020 SPS 67135 b

1any violation by a credit repair organization of this Act or
2rules adopted under this Act.
 
3    (815 ILCS 605/5.5 new)
4    Sec. 5.5. Duties of the Secretary.
5    (a) The Secretary shall oversee the activities of credit
6repair organizations and compliance with this Act.
7    (b) A credit repair organization shall submit annually to
8the Secretary, in a form and manner as the Secretary may
9prescribe, the following information:
10        (1) the unduplicated number of buyers under contract
11    with the credit repair organization for even one day
12    during the reporting term;
13        (2) out of the unduplicated buyers referenced in
14    paragraph (1), the unduplicated number of credit report
15    items questioned, through a dispute, a complaint, or some
16    other documented action by the credit repair organization,
17    at least one time since the contract start date;
18        (3) out of the items described in paragraph (2), the
19    number of items successfully removed from buyers' credit
20    reports;
21        (4) out of the items described in paragraph (3), the
22    number of items reinserted in buyers' credit reports
23    within 6 months;
24        (5) out of the items described in paragraph (3), the
25    number of items that stayed off buyers' credit reports for

 

 

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1    6 or more months and can be considered permanent changes;
2    and
3        (6) any additional information as determined by the
4    Secretary.
5    (c) A credit repair organization shall annually file with
6the Secretary the statistical proof that confirms any
7information used to demonstrate successful results, such as
8permanent changes, in advertisements. This includes, but is
9not limited to, advertisements sent through the United States
10Postal Service, posted on the Internet, printed in newspapers
11or other publications, and sent electronically by text or
12email.
13    (d) The Secretary may routinely audit the accuracy of
14advertisements for credit repair organizations.
15    (e) The Secretary may issue reports to the General
16Assembly and the general public, that includes a compilation
17of the statistical proof received from credit repair
18organizations described in paragraph (4) of Section 5 and an
19assessment of the quality of services provided by credit
20repair organizations to consumers.
 
21    (815 ILCS 605/6)  (from Ch. 121 1/2, par. 2106)
22    Sec. 6. Before the execution of a contract or other form of
23agreement between a buyer and a credit repair services
24organization or before the credit repair organization receives
25receipt by any such organization of money or other valuable

 

 

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1consideration, whichever occurs first, such organization shall
2provide the buyer with a statement, in writing, containing the
3following:
4        (1) a complete and accurate statement of the buyer's
5    right to review any file on the buyer maintained by a
6    consumer reporting agency, as provided under the Fair
7    Credit Reporting Act (15 U.S.C. Section 1681 et seq.);
8        (2) a statement that the buyer may review his consumer
9    reporting agency file at no charge if a request therefor
10    is made to such agency within 30 days after receipt by the
11    buyer of notice that credit has been denied and if such
12    request is not made within the allotted time, the
13    approximate charge to the buyer for such review;
14        (3) a complete and accurate statement of the buyer's
15    right to dispute the completeness or accuracy of any item
16    contained in any file on the buyer maintained by a
17    consumer reporting agency;
18        (4) (blank); a complete and detailed description of
19    the services to be performed by the credit services
20    organization and the total cost to the buyer for such
21    services;
22        (5) a statement notifying the buyer that: (i) credit
23    reporting agencies have no obligation to remove
24    information from credit reports unless the information is
25    erroneous, cannot be verified or is more than 7 years old;
26    and (ii) credit reporting agencies have no obligation to

 

 

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1    remove information concerning bankruptcies unless such
2    information is more than 10 years old;
3        (6) a statement asserting the buyer's right to proceed
4    against the surety bond required under Section 5.4 10; and
5        (7) the name and business address of any such surety
6    company together with the name and the number of the
7    account.
8    The credit services organization shall maintain on file,
9for a period of 2 years after the date the statement is
10provided, an exact copy of the statement, signed by the buyer,
11acknowledging receipt of the statement.
12(Source: P.A. 91-357, eff. 7-29-99.)
 
13    (815 ILCS 605/7)  (from Ch. 121 1/2, par. 2107)
14    Sec. 7. (a) Each contract between the buyer and a credit
15repair services organization for the purchase of the services
16of the credit repair services organization shall be in
17writing, dated, signed by the buyer and an authorized employee
18of the credit repair organization, and shall include:
19    (1) (blank); a conspicuous statement in boldfaced type, in
20immediate proximity to the space reserved for the signature of
21the buyer, as follows:
22    "You, the buyer, may cancel this contract at any time
23before midnight of the third day after the date of the
24transaction. See the attached notice of cancellation form for
25an explanation of this right";

 

 

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1    (2) a complete and detailed description of the terms and
2conditions of payment consistent with Section 5 of this Act,
3including the total of all payments to be made by the buyer,
4whether to the credit repair services organization or to
5another person;
6    (2.5) a complete and detailed description of the
7cancellation policy of the credit repair organization, which
8shall include the following provisions:
9        (A) If a buyer seeks to stop using the services of a
10    credit repair organization, the buyer shall submit a
11    request to the credit repair organization to cancel the
12    contract. A credit repair organization shall allow
13    submission of a cancellation request electronically.
14        (B) A credit repair organization that has received a
15    request to cancel services for a buyer shall process the
16    cancellation within 15 days after the postmark of any
17    written request or of receipt of an electronic request,
18    and cease to conduct any additional work on behalf of the
19    buyer.
20        (C) Consumers whose cancellation requests are
21    processed and completed, remain obligated to pay for any
22    permanent change resulting from actions taken by the
23    credit repair organization during the contract term from
24    the contract start date through the date the cancellation
25    is processed.
26    (3) a full and detailed description of the services to be

 

 

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1performed by the credit repair services organization for the
2buyer, including all guarantees and all promises of full or
3partial refunds, and the estimated date by which the services
4are to be performed or the estimated length of time for
5performing the services; and
6    (4) the address of the credit repair services
7organization's principal place of business and the name and
8address of its agent in the State authorized to receive
9service of process.
10    (b) (Blank). The contract must have two easily detachable
11copies of a notice of cancellation. The notice must be in
12boldfaced type and in the following form:
13
"Notice of Cancellation"
14    "You may cancel this contract, without any penalty or
15obligation, within three days after the date the contract is
16signed.
17    If you cancel, any payment made by you under this contract
18will be returned within 10 days after the date of receipt by
19the seller of your cancellation notice.
20    To cancel this contract, mail or deliver a signed, dated
21copy of this cancellation notice, or other written notice to:
22    (name of seller) at (address of seller) (place of
23business) not later than midnight (date)
24I hereby cancel this transaction."
25..............................  .............................
26       (date)                      (purchaser's signature)

 

 

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1    (c) The credit repair services organization shall give to
2the buyer a copy of the completed contract and all other
3documents the credit repair services organization requires the
4buyer to sign at the time they are signed. A credit repair
5organization shall not unreasonably deny a buyer's request for
6an additional copy of the contract or any other document the
7buyer signed.
8(Source: P.A. 85-1384.)
 
9    (815 ILCS 605/7.1 new)
10    Sec. 7.1. Recordkeeping. The credit repair organization
11shall maintain on file, for a period of 2 years after the date
12the statement required in Section 7 is provided, an exact copy
13of the statement, signed by the buyer, acknowledging receipt
14of the statement.
 
15    (815 ILCS 605/8)  (from Ch. 121 1/2, par. 2108)
16    Sec. 8. (a) Any contract for services which does not
17comply with applicable provisions of this Act article shall be
18void and unenforceable as contrary to public policy. Any
19waiver by a buyer of the provisions of this Act shall be deemed
20void and unenforceable by a credit services organization as
21contrary to public policy. Any attempt by a credit repair
22services organization to have a buyer waive rights granted by
23this Act shall constitute a violation of this Act.
24    (b) The provisions of this Act shall apply to any person

 

 

HB4507- 18 -LRB103 37020 SPS 67135 b

1who seeks to evade its application by any device, subterfuge,
2or pretense, including, without limitation:
3        (1) instructing or suggesting that a buyer make
4    payments into an account controlled by a third party;
5        (2) using any agents, affiliates, or subsidiaries in
6    an attempt to avoid the application of the provisions of
7    this Act; or
8        (3) having any affiliation or other business
9    arrangement with an entity that is exempt from the
10    provisions of this Act, the effect of which is to evade the
11    provisions of this Act.
12    (c) A violation of this Section shall constitute a
13violation of this Act.
14(Source: P.A. 85-1384.)
 
15    (815 ILCS 605/9)  (from Ch. 121 1/2, par. 2109)
16    Sec. 9. (a) A credit repair services organization shall
17file a registration statement with the Department Secretary of
18State before conducting business in this State. The
19registration statement shall contain:
20        (1) the name and address of the credit repair services
21    organization;
22        (2) the name and address of the registered agent
23    authorized to accept service of process on behalf of the
24    credit repair services organization;
25        (3) the name and address of any person who directly or

 

 

HB4507- 19 -LRB103 37020 SPS 67135 b

1    indirectly owns or controls 10 percent or more of the
2    outstanding shares of stock in the credit repair services
3    organization; and
4        (4) the name, numbers, and location of the surety
5    company issuing a surety bond maintained as required by
6    Section 5.4 10 of this Act.
7    (b) The registration statement must also contain either:
8        (1) a full and complete disclosure of any litigation
9    or unresolved complaint filed with a governmental
10    authority of this State, any other state or the United
11    States relating to the operation of the credit repair
12    services organization; or
13        (2) a notarized statement that states that there has
14    been no litigation or unresolved complaint filed with a
15    governmental authority of this State, any other state or
16    the United States relating to the operation of the credit
17    repair services organization.
18    (c) The credit repair services organization shall update
19such statement not later than 30 days the 90th day after the
20date on which a change in the information required in the
21statement occurs.
22    (d) Each credit repair services organization registering
23under this Section shall maintain a copy of the registration
24statement in their files. The credit repair services
25organization shall allow a buyer to inspect the registration
26statement on request.

 

 

HB4507- 20 -LRB103 37020 SPS 67135 b

1    (e) The Department Secretary of State may charge each
2credit services organization that files a registration
3statement a reasonable fee of $3,000 per year not to exceed
4$100 to cover the cost of filing.
5    (f) Any credit repair organization that has a proper
6registration on file with the Secretary of State on July 1,
72025, shall be entitled to continue to lawfully act as a credit
8repair organization under the terms of this Act if it files a
9registration with the Department within 60 days after the
10Department issues forms for the filing of such registration.
11(Source: P.A. 85-1384.)
 
12    (815 ILCS 605/9.5 new)
13    Sec. 9.5. Transfer of records. All books, records, files,
14correspondence, documents, or other papers and pending
15business or matters in any way related to the regulation of
16credit repair organizations in the possession of the Secretary
17of State shall be delivered and transferred to the Department.
 
18    (815 ILCS 605/11)  (from Ch. 121 1/2, par. 2111)
19    Sec. 11. Any person injured by a violation of this Act or
20by the credit repair services organization's breach of a
21contract entered into pursuant to Section 7 of this Act, may
22bring any action for recovery of actual damages and statutory
23damages of $5,000 for the first offense and $10,000 for a
24second and any subsequent offense. Such person may also be

 

 

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1awarded punitive damages, reasonable attorney's fees and court
2costs.
3(Source: P.A. 85-1384.)
 
4    (815 ILCS 605/12)  (from Ch. 121 1/2, par. 2112)
5    Sec. 12. A. Nothing in this Act shall be construed to
6restrict the exercise of powers or the performance of the
7duties of the Attorney General, a State's Attorney, or federal
8law enforcement. The Attorney General, the State's Attorney of
9any county, or a buyer may bring an action in a circuit court
10to enjoin a violation of this Act. In addition to any
11injunction, the Attorney General or any State's Attorney or
12any county, in the name of the People of the State of Illinois,
13may seek to recover damages pursuant to this Act or any other
14relief permitted by law. The Attorney General may enforce a
15violation of this Act as an unlawful practice under the
16Consumer Fraud and Deceptive Business Practices Act.
17(Source: P.A. 85-1384.)
 
18    (815 ILCS 605/14)  (from Ch. 121 1/2, par. 2114)
19    Sec. 14. Construction.
20    (a) For purposes of carrying out the objectives of this
21Act:
22        (1) This Act shall be liberally construed.
23        (2) This Act shall be construed as a consumer
24    protection law.

 

 

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1        (3) All exclusions from the definition of the credit
2    repair organization, as described in subsection (g) of
3    Section 3, shall be construed narrowly and the burden of
4    proving an exclusion from the definition of credit repair
5    organization definition exemption under subsection (g) of
6    Section 3 is on the person claiming the exemption.
7    (b) It is the intent of the General Assembly for this Act
8to apply to the conduct of attorneys when not engaged in the
9practice of law.
10    (c) In construing this Act consideration shall be given to
11the interpretations of the Fair Credit Reporting Act (15
12U.S.C. Section 1681 et seq.) In an action under this Act the
13burden of proving an exemption under paragraph (d) of Section
143 is on the person claiming the exemption.
15(Source: P.A. 85-1384.)
 
16    (815 ILCS 605/15)  (from Ch. 121 1/2, par. 2115)
17    Sec. 15. The remedies provided by this Act are in addition
18to other remedies provided by law. A violation of this Act
19shall also constitute a violation of the Consumer Fraud and
20Deceptive Business Practices Act. A violation of the
21Telemarketing and Consumer Fraud and Abuse Prevention Act (15
22U.S.C. Section 6101 et seq.) and its implementing regulations
23(16 CFR 310.1 et seq.) or of the federal Credit Repair
24Organizations Act (15 U.S.C. Section 1679 et seq.) shall also
25be a violation of this Act.

 

 

HB4507- 23 -LRB103 37020 SPS 67135 b

1(Source: P.A. 85-1384.)
 
2    (815 ILCS 605/17 new)
3    Sec. 17. Rulemaking.
4    (a) In addition to powers granted to the Department under
5this Act, the Department may adopt rules consistent with the
6purposes of this Act, including, but not limited to:
7        (1) rules in connection with the activities of credit
8    repair organizations as may be necessary and appropriate
9    for the protection of consumers in this State;
10        (2) rules as may be necessary and appropriate to
11    define and deter improper or fraudulent business practices
12    in connection with the activities of credit repair
13    organizations;
14        (3) rules that define the terms used in this Act and as
15    may be necessary and appropriate to interpret and
16    implement the provisions of this Act; and
17        (4) rules to prevent evasion of this Act; and
18        (5) rules as may be necessary for the enforcement and
19    administration of this Act.
20    (b) The Secretary is authorized to make specific rulings,
21demands, and findings that the Secretary deems necessary for
22the proper conduct of any credit repair organization.
 
23    (815 ILCS 605/17.5 new)
24    Sec. 17.5. Regulatory assessment.

 

 

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1    (a) Every credit repair organization shall annually pay to
2the Department its pro rata share of the cost for
3administration of the Act, as estimated by the Department, for
4the current year and for any deficit actually incurred in the
5administration of the Act in prior years. Every credit repair
6organization's pro rata share shall be the percentage that the
7number of buyers under contract with the credit repair
8organization bears to the total buyers under contract with all
9credit repair organizations in the previous year, or any other
10method of pro rata fee assessment as established by rule.
11    (b) The Secretary may establish other fees by rule as
12necessary to administer and enforce this Act.
13    (c) All fees received under this Section shall be
14nonrefundable.
 
15    (815 ILCS 605/18 new)
16    Sec. 18. Evasion. Any agreement, contract, or transaction
17that is structured to evade this Act shall be deemed to covered
18by this Act.
 
19    (815 ILCS 605/19 new)
20    Sec. 19. Examination and reports.
21    (a) The Secretary may examine the business affairs of a
22credit report organization for compliance with this Act as
23often as the Secretary deems necessary and proper. The
24Department may adopt rules with respect to the frequency and

 

 

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1manner of examination. The Secretary shall appoint a suitable
2person to perform an examination. The Secretary and his or her
3appointees may examine under oath the entire books, records,
4documents, and operations of each credit repair organization
5and its subsidiaries, affiliates, and agents, and may examine
6any of the officers, directors, employees, and agents of the
7credit repair organization and its subsidiaries, affiliates,
8and agents.
9    (b) Affiliates of a credit repair organization shall be
10subject to examination by the Secretary on the same terms as
11the credit repair organization.
12    (c) The expenses of any examination of the credit repair
13organization and affiliates shall be borne by the licensee and
14assessed by the Secretary as established by rule.
15    (d) In addition to any reports required under this Act,
16every licensee shall file any other report that the Secretary
17requires.
 
18    (815 ILCS 605/20 new)
19    Sec. 20. Violations. It is a violation of this Act for a
20credit repair organization, or other person subject to this
21Act to:
22        (1) directly or indirectly employ any scheme, device,
23    or artifice to defraud or mislead any person, including,
24    but not limited to, engaging in bait and switch
25    advertising or sales practices;

 

 

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1        (2) directly or indirectly engage in any unfair or
2    deceptive act or practice toward any person, including,
3    but not limited to, any false or deceptive statement about
4    fees or other terms of the contract with a buyer;
5        (3) directly or indirectly obtain property by fraud or
6    misrepresentation;
7        (4) knowingly make, publish, or disseminate any false,
8    deceptive, or misleading information;
9        (5) fail to make any report or statement lawfully
10    required by the Secretary or other public official;
11        (6) demonstrate, by course of conduct, negligence or
12    incompetence in performing any act directly or indirectly
13    relating to activities covered by this Act;
14        (7) violate the Consumer Fraud and Deceptive Business
15    Practices Act; and
16        (8) fail to comply with the provisions of this Act or
17    with any lawful order, agreement, or rule made or issued
18    under the provisions of this Act.
 
19    (815 ILCS 605/21 new)
20    Sec. 21. Enforcement.
21    (a) In order to enforce this Act, the Department may:
22        (1) take any action authorized by this Act against a
23    credit repair organization or other person subject to this
24    Act for any violation of this Act;
25        (2) order relief under this Section which may include,

 

 

HB4507- 27 -LRB103 37020 SPS 67135 b

1    but is not limited to, any of the following:
2            (A) rescission or reformation of contracts;
3            (B) refund of moneys or return of real property;
4            (C) restitution;
5            (D) disgorgement or compensation for unjust
6        enrichment, with any disgorged amounts returned to the
7        affected consumers, to the extent practicable;
8            (E) payment of damages or other monetary relief;
9            (F) public notification regarding the violation,
10        including the costs of notification;
11            (G) limits on the activities or functions of the
12        person; and
13            (F) monetary penalties, as set forth more fully in
14        paragraph (1) of subsection (d);
15        (3) compromise, modify, or remit any penalty that may
16    be assessed or has already been assessed; and
17        (4) impose penalties to deter future violations by any
18    person subject to this Act.
19    (b) In any administrative action brought under this Act,
20the following penalties shall apply:
21        (1) Order any person who violates any provision of
22    this Act, through any act or omission, to pay a penalty as
23    follows:
24            (A) For any violation of this Act, rule, order, or
25        condition imposed in writing by the Department, a
26        penalty may not exceed the greater of either $5,000

 

 

HB4507- 28 -LRB103 37020 SPS 67135 b

1        for each day during which the violation or failure to
2        pay continues or $2,500 for each act or omission in
3        violation of this subparagraph.
4            (B) For any reckless violation by a person of this
5        Act, rule, order, or condition imposed by the
6        Department, a penalty may not exceed the greater of
7        $25,000 for each day during which the violation
8        continues or $10,000 for each act or omission in
9        violation of this subparagraph.
10            (C) For any knowing violation, by a person of this
11        Act, rule, order, or condition imposed by the
12        Department, a penalty may not exceed the lesser of 1%
13        of the person's total assets or $1,000,000 for each
14        day during which the violation continues, but in no
15        circumstances may be less than $25,000 for each act or
16        omission in violation of this subparagraph.
17        (2) In determining the amount of any penalty assessed
18    under this Act, the Department shall take into account
19    mitigating factors and the appropriateness of the penalty
20    with respect to all of the following:
21            (A) the amount of financial resources of the
22        person charged;
23            (B) the good faith of the person charged;
24            (C) the gravity of the violation;
25            (D) the severity of the risks to or losses of the
26        consumer, which may take into account the number of

 

 

HB4507- 29 -LRB103 37020 SPS 67135 b

1        products or services sold or provided;
2            (E) the history of previous violations; and
3            (G) other facts and circumstances as justice may
4        require.
 
5    (815 ILCS 605/22 new)
6    Sec. 22. Confidential supervisory information.
7    (a) Reports of investigation and examination, other
8reports rendered under this Act, and correspondence and
9memoranda concerning or arising out of an investigation,
10examination, or report, including any copies thereof, in the
11possession of the Secretary shall be confidential
12communications, shall not be subject to disclosure under the
13Freedom of Information Act, and shall not be made public
14unless the Secretary finds that the ends of justice and the
15public advantage will be served by the disclosure. Upon such
16finding, the Secretary may disclose, in whole or in part, any
17report or other material referred to in this Section in the
18manner the Secretary considers proper.
19    (b) The Secretary may release any of the information
20described in subsection (a) to any agency of this State,
21another state, or the United States.
22    (c) Any information provided by a credit repair
23organization under subsections (b) and (c) of Section 5.5,
24other than personal identifiable information of a buyer, shall
25be a public record subject to disclosure under the Freedom of

 

 

HB4507- 30 -LRB103 37020 SPS 67135 b

1Information Act.
 
2    (815 ILCS 605/23 new)
3    Sec. 23. Judicial review. All final administrative
4decisions of the Department under this Act, all amendments and
5modifications of final administrative decisions, and any rules
6adopted by the Department under this Act, shall be subject to
7judicial review under the provisions of the Administrative
8Review Law.
 
9    (815 ILCS 605/4 rep.)
10    (815 ILCS 605/10 rep.)
11    Section 15. The Credit Services Organizations Act is
12amended by repealing Sections 4 and 10.
 
13    Section 99. Effective date. This Act takes effect January
141, 2025.

 

 

HB4507- 31 -LRB103 37020 SPS 67135 b

1 INDEX
2 Statutes amended in order of appearance
3    815 ILCS 505/2Zfrom Ch. 121 1/2, par. 262Z
4    815 ILCS 505/2EEEE new
5    815 ILCS 605/1from Ch. 121 1/2, par. 2101
6    815 ILCS 605/2from Ch. 121 1/2, par. 2102
7    815 ILCS 605/3from Ch. 121 1/2, par. 2103
8    815 ILCS 605/5from Ch. 121 1/2, par. 2105
9    815 ILCS 605/5.4 new
10    815 ILCS 605/5.5 new
11    815 ILCS 605/6from Ch. 121 1/2, par. 2106
12    815 ILCS 605/7from Ch. 121 1/2, par. 2107
13    815 ILCS 605/7.1 new
14    815 ILCS 605/8from Ch. 121 1/2, par. 2108
15    815 ILCS 605/9from Ch. 121 1/2, par. 2109
16    815 ILCS 605/9.5 new
17    815 ILCS 605/11from Ch. 121 1/2, par. 2111
18    815 ILCS 605/12from Ch. 121 1/2, par. 2112
19    815 ILCS 605/14from Ch. 121 1/2, par. 2114
20    815 ILCS 605/15from Ch. 121 1/2, par. 2115
21    815 ILCS 605/17 new
22    815 ILCS 605/17.5 new
23    815 ILCS 605/18 new
24    815 ILCS 605/19 new
25    815 ILCS 605/20 new

 

 

HB4507- 32 -LRB103 37020 SPS 67135 b

1    815 ILCS 605/21 new
2    815 ILCS 605/22 new
3    815 ILCS 605/23 new
4    815 ILCS 605/4 rep.
5    815 ILCS 605/10 rep.