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1 | AN ACT concerning business. | |||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois, | |||||||||||||||||||
3 | represented in the General Assembly: | |||||||||||||||||||
4 | Section 5. The Consumer Fraud and Deceptive Business | |||||||||||||||||||
5 | Practices Act is amended by changing Section 2Z and by adding | |||||||||||||||||||
6 | Section 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 | |||||||||||||||||||
9 | knowingly violates the Automotive Repair Act, the Automotive | |||||||||||||||||||
10 | Collision Repair Act, the Home Repair and Remodeling Act, the | |||||||||||||||||||
11 | Dance Studio Act, the Physical Fitness Services Act, the | |||||||||||||||||||
12 | Hearing Instrument Consumer Protection Act, the Illinois Union | |||||||||||||||||||
13 | Label Act, the Installment Sales Contract Act, the Job | |||||||||||||||||||
14 | Referral and Job Listing Services Consumer Protection Act, the | |||||||||||||||||||
15 | Travel Promotion Consumer Protection Act, the Credit Services | |||||||||||||||||||
16 | Organizations Act, the Automatic Telephone Dialers Act, the | |||||||||||||||||||
17 | Pay-Per-Call Services Consumer Protection Act, the Telephone | |||||||||||||||||||
18 | Solicitations Act, the Illinois Funeral or Burial Funds Act, | |||||||||||||||||||
19 | the Cemetery Oversight Act, the Cemetery Care Act, the Safe | |||||||||||||||||||
20 | and Hygienic Bed Act, the Illinois Pre-Need Cemetery Sales | |||||||||||||||||||
21 | Act, the High Risk Home Loan Act, the Payday Loan Reform Act, | |||||||||||||||||||
22 | the Predatory Loan Prevention Act, the Mortgage Rescue Fraud | |||||||||||||||||||
23 | Act, subsection (a) or (b) of Section 3-10 of the Cigarette Tax |
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1 | Act, subsection (a) or (b) of Section 3-10 of the Cigarette Use | ||||||
2 | Tax Act, the Electronic Mail Act, the Internet Caller | ||||||
3 | Identification Act, paragraph (6) of subsection (k) of Section | ||||||
4 | 6-305 of the Illinois Vehicle Code, Section 11-1431, 18d-115, | ||||||
5 | 18d-120, 18d-125, 18d-135, 18d-150, or 18d-153 of the Illinois | ||||||
6 | Vehicle Code, Article 3 of the Residential Real Property | ||||||
7 | Disclosure Act, the Automatic Contract Renewal Act, the | ||||||
8 | Reverse Mortgage Act, Section 25 of the Youth Mental Health | ||||||
9 | Protection Act, the Personal Information Protection Act, or | ||||||
10 | the Student Online Personal Protection Act commits an unlawful | ||||||
11 | practice within the meaning of this Act. | ||||||
12 | (Source: P.A. 100-315, eff. 8-24-17; 100-416, eff. 1-1-18; | ||||||
13 | 100-863, 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 | ||||||
16 | Act. Any person who violates the Credit Repair Organizations | ||||||
17 | Act commits an unlawful practice within the meaning of this | ||||||
18 | Act. | ||||||
19 | Section 10. The Credit Services Organizations Act is | ||||||
20 | amended by changing Sections 1, 2, 3, 5, 6, 7, 8, 9, 11, 12, | ||||||
21 | 14, and 15 and by adding Sections 5.4, 5.5, 7.1, 9.5 17, 17.5, | ||||||
22 | 18, 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 | ||||||
7 | great importance to consumers who have a vital interest in | ||||||
8 | establishing and maintaining their credit worthiness and | ||||||
9 | credit standing. As a result, consumers who have experienced | ||||||
10 | credit problems may seek assistance from credit repair service | ||||||
11 | businesses which offer to improve the credit standing of such | ||||||
12 | consumers. Certain advertising and business practices of some | ||||||
13 | companies engaged in the business of credit repair services | ||||||
14 | have worked a financial hardship upon the people of this | ||||||
15 | State, often on those who are of limited economic means and | ||||||
16 | inexperienced in credit matters. | ||||||
17 | (b) The purpose of this Act is to provide prospective | ||||||
18 | consumers of credit repair organizations services companies | ||||||
19 | with the information necessary to make an informed decision | ||||||
20 | regarding the purchase of those services and to protect the | ||||||
21 | public from unfair or deceptive advertising and business | ||||||
22 | practices. | ||||||
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 | ||||||
3 | solicited to purchase or who purchases the services of a | ||||||
4 | credit repair services organization. "Buyer" or "consumer" | ||||||
5 | includes an individual for whom the services of a credit | ||||||
6 | repair organization are purchased. | ||||||
7 | (b) "Consumer reporting agency" has the meaning assigned | ||||||
8 | by Section 603(f), Fair Credit Reporting Act (15 U.S.C. | ||||||
9 | Section 1681a(f)). | ||||||
10 | (c) "Extension of Credit" means the right to defer payment | ||||||
11 | of a debt or to incur a debt and defer its payment that is | ||||||
12 | offered or granted primarily for personal, family, or | ||||||
13 | household purposes. | ||||||
14 | (d) "Credit Repair Services Organization" means any a | ||||||
15 | person who sells, provides, performs, or represents that such | ||||||
16 | person can or will sell, provide, or perform any service , with | ||||||
17 | respect to the extension of credit by others and in return for | ||||||
18 | the payment of money or other valuable consideration, for | ||||||
19 | provides, or represents that the express or implied purpose of | ||||||
20 | person 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 | ||||||
3 | not 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, | ||||||
10 | corporation, partnership, joint venture , or any business | ||||||
11 | entity. | ||||||
12 | (f) "Consumer report" has the meaning assigned by Section | ||||||
13 | 1681a(d) of the Fair Credit Reporting Act (15 U.S.C. Section | ||||||
14 | 1681a(d)). | ||||||
15 | (g) "Contract start date" means the date the consumer | ||||||
16 | entered into a contract with a credit repair organization. | ||||||
17 | (h) "Creditor" has the meaning assigned by Section 103 of | ||||||
18 | the Truth in Lending Act (15 U.S.C. Section 1602(g)). | ||||||
19 | (i) "Department" means the Department of Financial and | ||||||
20 | Professional Regulation. | ||||||
21 | (j) "Permanent change" means any removal of negative items | ||||||
22 | from a consumer's credit report or any change that turns a | ||||||
23 | negative item on a consumer's credit report into a neutral or | ||||||
24 | positive item that remains in place for at least 6 months. | ||||||
25 | (k) "Secretary" means the Secretary of Financial and | ||||||
26 | Professional 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 | ||||||
4 | salespersons, agents , officers, or representatives, or any | ||||||
5 | independent contractor who sells or attempts to sell the | ||||||
6 | services 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 | ||||||
21 | shall maintain a surety bond or electronic surety bond in the | ||||||
22 | principal sum of $100,000 issued by a bonding company | ||||||
23 | authorized to do business in this State and approved by the | ||||||
24 | Secretary. The bond shall run to the Secretary and shall be for | ||||||
25 | the benefit of any consumer who incurs damages as a result of |
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1 | any violation by a credit repair organization of this Act or | ||||||
2 | rules 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 | ||||||
6 | repair organizations and compliance with this Act. | ||||||
7 | (b) A credit repair organization shall submit annually to | ||||||
8 | the Secretary, in a form and manner as the Secretary may | ||||||
9 | prescribe, 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 | ||||||
6 | the Secretary the statistical proof that confirms any | ||||||
7 | information used to demonstrate successful results, such as | ||||||
8 | permanent changes, in advertisements. This includes, but is | ||||||
9 | not limited to, advertisements sent through the United States | ||||||
10 | Postal Service, posted on the Internet, printed in newspapers | ||||||
11 | or other publications, and sent electronically by text or | ||||||
12 | email. | ||||||
13 | (d) The Secretary may routinely audit the accuracy of | ||||||
14 | advertisements for credit repair organizations. | ||||||
15 | (e) The Secretary may issue reports to the General | ||||||
16 | Assembly and the general public, that includes a compilation | ||||||
17 | of the statistical proof received from credit repair | ||||||
18 | organizations described in paragraph (4) of Section 5 and an | ||||||
19 | assessment of the quality of services provided by credit | ||||||
20 | repair 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 | ||||||
23 | agreement between a buyer and a credit repair services | ||||||
24 | organization or before the credit repair organization receives | ||||||
25 | receipt by any such organization of money or other valuable |
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1 | consideration, whichever occurs first, such organization shall | ||||||
2 | provide the buyer with a statement, in writing, containing the | ||||||
3 | following: | ||||||
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, | ||||||
9 | for a period of 2 years after the date the statement is | ||||||
10 | provided, an exact copy of the statement, signed by the buyer, | ||||||
11 | acknowledging 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 | ||||||
15 | repair services organization for the purchase of the services | ||||||
16 | of the credit repair services organization shall be in | ||||||
17 | writing, dated, signed by the buyer and an authorized employee | ||||||
18 | of the credit repair organization , and shall include: | ||||||
19 | (1) (blank); a conspicuous statement in boldfaced type, in | ||||||
20 | immediate proximity to the space reserved for the signature of | ||||||
21 | the buyer, as follows: | ||||||
22 | "You, the buyer, may cancel this contract at any time | ||||||
23 | before midnight of the third day after the date of the | ||||||
24 | transaction. See the attached notice of cancellation form for | ||||||
25 | an explanation of this right"; |
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1 | (2) a complete and detailed description of the terms and | ||||||
2 | conditions of payment consistent with Section 5 of this Act , | ||||||
3 | including the total of all payments to be made by the buyer, | ||||||
4 | whether to the credit repair services organization or to | ||||||
5 | another person; | ||||||
6 | (2.5) a complete and detailed description of the | ||||||
7 | cancellation policy of the credit repair organization, which | ||||||
8 | shall 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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1 | performed by the credit repair services organization for the | ||||||
2 | buyer, including all guarantees and all promises of full or | ||||||
3 | partial refunds, and the estimated date by which the services | ||||||
4 | are to be performed or the estimated length of time for | ||||||
5 | performing the services; and | ||||||
6 | (4) the address of the credit repair services | ||||||
7 | organization's principal place of business and the name and | ||||||
8 | address of its agent in the State authorized to receive | ||||||
9 | service of process. | ||||||
10 | (b) (Blank). The contract must have two easily detachable | ||||||
11 | copies of a notice of cancellation. The notice must be in | ||||||
12 | boldfaced type and in the following form: | ||||||
13 | "Notice of Cancellation" | ||||||
14 | "You may cancel this contract, without any penalty or | ||||||
15 | obligation, within three days after the date the contract is | ||||||
16 | signed. | ||||||
17 | If you cancel, any payment made by you under this contract | ||||||
18 | will be returned within 10 days after the date of receipt by | ||||||
19 | the seller of your cancellation notice. | ||||||
20 | To cancel this contract, mail or deliver a signed, dated | ||||||
21 | copy of this cancellation notice, or other written notice to: | ||||||
22 | (name of seller) at (address of seller) (place of | ||||||
23 | business) not later than midnight (date) | ||||||
24 | I hereby cancel this transaction." | ||||||
25 | .............................. .............................
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26 | (date) (purchaser's signature) |
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1 | (c) The credit repair services organization shall give to | ||||||
2 | the buyer a copy of the completed contract and all other | ||||||
3 | documents the credit repair services organization requires the | ||||||
4 | buyer to sign at the time they are signed. A credit repair | ||||||
5 | organization shall not unreasonably deny a buyer's request for | ||||||
6 | an additional copy of the contract or any other document the | ||||||
7 | buyer signed. | ||||||
8 | (Source: P.A. 85-1384.) | ||||||
9 | (815 ILCS 605/7.1 new) | ||||||
10 | Sec. 7.1. Recordkeeping. The credit repair organization | ||||||
11 | shall maintain on file, for a period of 2 years after the date | ||||||
12 | the statement required in Section 7 is provided, an exact copy | ||||||
13 | of the statement, signed by the buyer, acknowledging receipt | ||||||
14 | of 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 | ||||||
17 | comply with applicable provisions of this Act article shall be | ||||||
18 | void and unenforceable as contrary to public policy. Any | ||||||
19 | waiver by a buyer of the provisions of this Act shall be deemed | ||||||
20 | void and unenforceable by a credit services organization as | ||||||
21 | contrary to public policy. Any attempt by a credit repair | ||||||
22 | services organization to have a buyer waive rights granted by | ||||||
23 | this Act shall constitute a violation of this Act. | ||||||
24 | (b) The provisions of this Act shall apply to any person |
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| |||||||
1 | who seeks to evade its application by any device, subterfuge, | ||||||
2 | or 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 | ||||||
13 | violation 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 | ||||||
17 | file a registration statement with the Department Secretary of | ||||||
18 | State before conducting business in this State. The | ||||||
19 | registration 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 |
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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 | ||||||
19 | such statement not later than 30 days the 90th day after the | ||||||
20 | date on which a change in the information required in the | ||||||
21 | statement occurs. | ||||||
22 | (d) Each credit repair services organization registering | ||||||
23 | under this Section shall maintain a copy of the registration | ||||||
24 | statement in their files. The credit repair services | ||||||
25 | organization shall allow a buyer to inspect the registration | ||||||
26 | statement on request. |
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1 | (e) The Department Secretary of State may charge each | ||||||
2 | credit services organization that files a registration | ||||||
3 | statement 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 | ||||||
6 | registration on file with the Secretary of State on July 1, | ||||||
7 | 2025, shall be entitled to continue to lawfully act as a credit | ||||||
8 | repair organization under the terms of this Act if it files a | ||||||
9 | registration with the Department within 60 days after the | ||||||
10 | Department 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, | ||||||
14 | correspondence, documents, or other papers and pending | ||||||
15 | business or matters in any way related to the regulation of | ||||||
16 | credit repair organizations in the possession of the Secretary | ||||||
17 | of 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 | ||||||
20 | by the credit repair services organization's breach of a | ||||||
21 | contract entered into pursuant to Section 7 of this Act, may | ||||||
22 | bring any action for recovery of actual damages and statutory | ||||||
23 | damages of $5,000 for the first offense and $10,000 for a | ||||||
24 | second and any subsequent offense . Such person may also be |
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1 | awarded punitive damages, reasonable attorney's fees and court | ||||||
2 | costs. | ||||||
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 | ||||||
6 | restrict the exercise of powers or the performance of the | ||||||
7 | duties of the Attorney General, a State's Attorney, or federal | ||||||
8 | law enforcement. The Attorney General, the State's Attorney of | ||||||
9 | any county, or a buyer may bring an action in a circuit court | ||||||
10 | to enjoin a violation of this Act. In addition to any | ||||||
11 | injunction, the Attorney General or any State's Attorney or | ||||||
12 | any county, in the name of the People of the State of Illinois, | ||||||
13 | may seek to recover damages pursuant to this Act or any other | ||||||
14 | relief permitted by law. The Attorney General may enforce a | ||||||
15 | violation of this Act as an unlawful practice under the | ||||||
16 | Consumer 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 | ||||||
21 | Act: | ||||||
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 | ||||||
8 | to apply to the conduct of attorneys when not engaged in the | ||||||
9 | practice of law. | ||||||
10 | (c) In construing this Act consideration shall be given to | ||||||
11 | the interpretations of the Fair Credit Reporting Act (15 | ||||||
12 | U.S.C. Section 1681 et seq.) In an action under this Act the | ||||||
13 | burden of proving an exemption under paragraph (d) of Section | ||||||
14 | 3 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 | ||||||
18 | to other remedies provided by law. A violation of this Act | ||||||
19 | shall also constitute a violation of the Consumer Fraud and | ||||||
20 | Deceptive Business Practices Act. A violation of the | ||||||
21 | Telemarketing and Consumer Fraud and Abuse Prevention Act (15 | ||||||
22 | U.S.C. Section 6101 et seq.) and its implementing regulations | ||||||
23 | (16 CFR 310.1 et seq.) or of the federal Credit Repair | ||||||
24 | Organizations Act (15 U.S.C. Section 1679 et seq.) shall also | ||||||
25 | be a violation of this Act. |
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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 | ||||||
5 | this Act, the Department may adopt rules consistent with the | ||||||
6 | purposes 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, | ||||||
21 | demands, and findings that the Secretary deems necessary for | ||||||
22 | the 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 | ||||||
2 | the Department its pro rata share of the cost for | ||||||
3 | administration of the Act, as estimated by the Department, for | ||||||
4 | the current year and for any deficit actually incurred in the | ||||||
5 | administration of the Act in prior years. Every credit repair | ||||||
6 | organization's pro rata share shall be the percentage that the | ||||||
7 | number of buyers under contract with the credit repair | ||||||
8 | organization bears to the total buyers under contract with all | ||||||
9 | credit repair organizations in the previous year, or any other | ||||||
10 | method of pro rata fee assessment as established by rule. | ||||||
11 | (b) The Secretary may establish other fees by rule as | ||||||
12 | necessary to administer and enforce this Act. | ||||||
13 | (c) All fees received under this Section shall be | ||||||
14 | nonrefundable. | ||||||
15 | (815 ILCS 605/18 new) | ||||||
16 | Sec. 18. Evasion. Any agreement, contract, or transaction | ||||||
17 | that is structured to evade this Act shall be deemed to covered | ||||||
18 | by 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 | ||||||
22 | credit report organization for compliance with this Act as | ||||||
23 | often as the Secretary deems necessary and proper. The | ||||||
24 | Department may adopt rules with respect to the frequency and |
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1 | manner of examination. The Secretary shall appoint a suitable | ||||||
2 | person to perform an examination. The Secretary and his or her | ||||||
3 | appointees may examine under oath the entire books, records, | ||||||
4 | documents, and operations of each credit repair organization | ||||||
5 | and its subsidiaries, affiliates, and agents, and may examine | ||||||
6 | any of the officers, directors, employees, and agents of the | ||||||
7 | credit repair organization and its subsidiaries, affiliates, | ||||||
8 | and agents. | ||||||
9 | (b) Affiliates of a credit repair organization shall be | ||||||
10 | subject to examination by the Secretary on the same terms as | ||||||
11 | the credit repair organization. | ||||||
12 | (c) The expenses of any examination of the credit repair | ||||||
13 | organization and affiliates shall be borne by the licensee and | ||||||
14 | assessed by the Secretary as established by rule. | ||||||
15 | (d) In addition to any reports required under this Act, | ||||||
16 | every licensee shall file any other report that the Secretary | ||||||
17 | requires. | ||||||
18 | (815 ILCS 605/20 new) | ||||||
19 | Sec. 20. Violations. It is a violation of this Act for a | ||||||
20 | credit repair organization, or other person subject to this | ||||||
21 | Act 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, |
| |||||||
| |||||||
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, | ||||||
20 | the 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 |
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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 |
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| |||||||
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 | ||||||
8 | reports rendered under this Act, and correspondence and | ||||||
9 | memoranda concerning or arising out of an investigation, | ||||||
10 | examination, or report, including any copies thereof, in the | ||||||
11 | possession of the Secretary shall be confidential | ||||||
12 | communications, shall not be subject to disclosure under the | ||||||
13 | Freedom of Information Act, and shall not be made public | ||||||
14 | unless the Secretary finds that the ends of justice and the | ||||||
15 | public advantage will be served by the disclosure. Upon such | ||||||
16 | finding, the Secretary may disclose, in whole or in part, any | ||||||
17 | report or other material referred to in this Section in the | ||||||
18 | manner the Secretary considers proper. | ||||||
19 | (b) The Secretary may release any of the information | ||||||
20 | described in subsection (a) to any agency of this State, | ||||||
21 | another state, or the United States. | ||||||
22 | (c) Any information provided by a credit repair | ||||||
23 | organization under subsections (b) and (c) of Section 5.5, | ||||||
24 | other than personal identifiable information of a buyer, shall | ||||||
25 | be a public record subject to disclosure under the Freedom of |
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1 | Information Act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | (815 ILCS 605/23 new) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Sec. 23. Judicial review. All final administrative | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | decisions of the Department under this Act, all amendments and | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | modifications of final administrative decisions, and any rules | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | adopted by the Department under this Act, shall be subject to | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | judicial review under the provisions of the Administrative | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Review Law. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 | (815 ILCS 605/4 rep.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | (815 ILCS 605/10 rep.) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
11 | Section 15. The Credit Services Organizations Act is | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
12 | amended by repealing Sections 4 and 10. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
13 | Section 99. Effective date. This Act takes effect January | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
14 | 1, 2025. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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