Full Text of SB1085 102nd General Assembly
SB1085sam001 102ND GENERAL ASSEMBLY | Sen. Celina Villanueva Filed: 4/14/2021
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| 1 | | AMENDMENT TO SENATE BILL 1085
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1085 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title; references to Act. | 5 | | (a) Short title. This Act may be cited as the Educational | 6 | | Planning Services Consumer Protection Act. | 7 | | (b) References to Act. This Act may be referred to as the | 8 | | Segura Law. | 9 | | Section 5. Findings. The General Assembly finds and | 10 | | declares all of the following: | 11 | | (1) It is in the interest of this State to protect | 12 | | Illinois residents and their families from the predatory | 13 | | and deceptive practices of certain educational planning | 14 | | service providers. It is in the public interest to protect | 15 | | all Illinois families, but particularly the most | 16 | | vulnerable families, those who are of lower income, and |
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| 1 | | those without prior college-going experience, from costly, | 2 | | deceptive, and predatory practices that have proliferated | 3 | | as the cost of postsecondary education has risen and | 4 | | anxiety about student loan debt has grown. | 5 | | (2) By charging an upfront premium, these entities can | 6 | | leave these most vulnerable families little or no recourse | 7 | | if they receive no services or if the services that they | 8 | | receive are inadequate. Additionally, many of the services | 9 | | offered by for-profit entities at a premium are readily | 10 | | available at no charge to all students through programs | 11 | | offered by public and not-for-profit organizations, such | 12 | | as the Illinois Student Assistance Commission, a local | 13 | | library, or an institution of higher learning. | 14 | | (3) Families with little knowledge of the college | 15 | | planning process, few financial resources, limited English | 16 | | proficiency, or a combination of these factors are | 17 | | particularly vulnerable to high pressure tactics that may | 18 | | be used to induce them to sign lengthy, highly technical, | 19 | | and costly contracts. Currently, there is no adequate | 20 | | recourse available to help families who have been | 21 | | victimized by opportunistic bad actors. | 22 | | (4) Some educational planning service providers have | 23 | | also provided legally questionable guidance to families | 24 | | who would like to reduce their higher education costs but | 25 | | would not typically qualify for grants based on financial | 26 | | need. Families have been counseled by disreputable |
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| 1 | | educational planning service providers to take extreme and | 2 | | deceptive measures, such as relinquishing their parental | 3 | | responsibilities through a court-ordered legal | 4 | | guardianship so that the child qualifies as an independent | 5 | | student, thereby basing a need calculation on only the | 6 | | student's financial information, allowing the student to | 7 | | qualify for need-based aid. | 8 | | (5) Unrestrained, these types of deceptive practices | 9 | | are a barrier to higher education access and to the ideals | 10 | | of diversity, equity, and inclusion in higher education in | 11 | | this State, and it is in the public interest to regulate | 12 | | them. The Segura Law would be the first step in providing | 13 | | recourse and thereby security to aspiring Illinois college | 14 | | students and their families. | 15 | | Section 10. Purpose and construction. The purpose of this | 16 | | Act is to protect consumers who enter into agreements with | 17 | | educational planning service providers and to regulate | 18 | | educational planning service providers. This Act shall be | 19 | | construed as a consumer protection law for all purposes. This | 20 | | Act shall be liberally construed to effectuate its purpose. | 21 | | Section 15. Definitions. As used in this Act: | 22 | | "Consumer" means any person who purchases or contracts for | 23 | | the purchase of educational planning services. | 24 | | "Educational planning services" means college and career |
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| 1 | | preparatory planning services, including, but not limited to, | 2 | | advice regarding and assistance with college and career | 3 | | searches; college application preparation or submission; | 4 | | financial aid application planning, preparation, or | 5 | | submission; and scholarship searches and applications. | 6 | | "Educational planning service provider" means any person | 7 | | or entity engaging in or holding itself out as engaging in the | 8 | | business of providing educational planning services in | 9 | | exchange for any fee or compensation or any person who | 10 | | solicits or acts on behalf of any person or entity engaging in | 11 | | or holding itself out as engaging in the business of providing | 12 | | educational planning services in exchange for any fee or | 13 | | compensation. "Educational planning service provider" does not | 14 | | include any of the following: | 15 | | (1) A not-for-profit or public institution of higher | 16 | | learning, as defined in the Higher Education Student | 17 | | Assistance Act, and the individuals employed by that | 18 | | institution where educational planning services are | 19 | | provided as part of the financial aid or career counseling | 20 | | services offered by the institution. | 21 | | (2) Public entities and their officers while acting in | 22 | | their official capacities. | 23 | | (3) Persons acting on behalf of a consumer under court | 24 | | order or as a legal representative. | 25 | | "Enrollment fee" or "set up fee" means any fee, | 26 | | obligation, or compensation paid or to be paid by the consumer |
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| 1 | | to an educational planning service provider in consideration | 2 | | of or in connection with establishing a contract or other | 3 | | agreement with a consumer related to the provision of | 4 | | educational planning services. | 5 | | "Maintenance fee" means any fee, obligation, or | 6 | | compensation paid or to be paid by the consumer on a periodic | 7 | | basis to an educational planning service provider in | 8 | | consideration for maintaining the relationship and services to | 9 | | be provided by the educational planning service provider in | 10 | | accordance with a contract with a consumer related to the | 11 | | provision of educational planning services. | 12 | | Section 20. Prohibitions and requirements. | 13 | | (a) It shall be unlawful for any person or entity to act as | 14 | | an educational planning service provider except as authorized | 15 | | by this Act. | 16 | | (b) An educational planning service provider may not | 17 | | provide educational planning services to a consumer for a fee | 18 | | without a written contract signed and dated by both the | 19 | | consumer and the educational planning service provider. A | 20 | | contract between an educational planning service provider and | 21 | | a consumer for the provision of educational planning services | 22 | | shall disclose clearly and conspicuously all of the following: | 23 | | (1) The name and address of the consumer. | 24 | | (2) The date of execution of the contract. | 25 | | (3) The legal name of the educational planning service |
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| 1 | | provider, including any other business names used by the | 2 | | educational planning service provider. | 3 | | (4) The corporate address and regular business | 4 | | address, including a street address, of the educational | 5 | | planning service provider. | 6 | | (5) The telephone number at which the consumer may | 7 | | speak with a representative of the educational planning | 8 | | service provider during normal business hours. | 9 | | (6) A description of the services and an itemized list | 10 | | of all fees to be paid by the consumer for each service and | 11 | | the date, approximate date, or circumstances under which | 12 | | each fee will become due. | 13 | | (7) The contents of the Consumer Notice and Rights | 14 | | Form provided in Section 25 of this Act. | 15 | | (8) A written notice to the consumer that the consumer | 16 | | may cancel the contract at any time until after the | 17 | | educational planning service provider has fully performed | 18 | | each service the educational planning service provider | 19 | | contracted to perform or represented he or she would | 20 | | perform and that the consumer may not be required to pay | 21 | | for services the consumer did not receive and shall be | 22 | | entitled to a full refund of any fees paid for educational | 23 | | planning services not provided. | 24 | | (9) A form the consumer may use to cancel the contract | 25 | | pursuant to this Act. The form shall include the name and | 26 | | mailing address of the educational planning service |
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| 1 | | provider and shall disclose clearly and conspicuously how | 2 | | the consumer can cancel the contract, including applicable | 3 | | addresses, telephone numbers, facsimile numbers, and | 4 | | electronic mail addresses the consumer can use to cancel | 5 | | the contract. Notwithstanding any other provision of this | 6 | | paragraph (9) to the contrary, a consumer's lack of strict | 7 | | adherence to an educational planning service provider's | 8 | | cancellation form or processes does not invalidate a | 9 | | consumer's good faith and reasonable method or form of | 10 | | cancellation. | 11 | | (c) If an educational planning service provider | 12 | | communicates with a consumer primarily in a language other | 13 | | than English, then the educational planning service provider | 14 | | shall furnish to the consumer a translation of all the | 15 | | disclosures and documents required by this Act, including, but | 16 | | not limited to, the contract, in that other language. | 17 | | (d) An educational planning service provider may not | 18 | | charge or receive from a consumer any enrollment fee, set up | 19 | | fee, up-front fee of any kind, or maintenance fee, and a | 20 | | consumer shall pay only for the educational planning services | 21 | | provided. | 22 | | (e) An educational planning service provider may not do | 23 | | any of the following: | 24 | | (1) Represent, expressly or by implication, any | 25 | | results or outcomes of its educational planning services | 26 | | in any advertising, marketing, or other communication to |
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| 1 | | consumers unless the educational planning service provider | 2 | | possesses substantiation for such representation at the | 3 | | time such representation is made. | 4 | | (2) Expressly or by implication, make any unfair or | 5 | | deceptive representations or any omissions of material | 6 | | facts in any of its advertising or marketing | 7 | | communications concerning educational planning services. | 8 | | (3) Advertise or market educational planning services, | 9 | | enter into a contract for educational planning services, | 10 | | or provide educational planning services without making | 11 | | the disclosures required in this Act at the times and in | 12 | | the form and manner as described in this Act. | 13 | | (4) Advise about or represent, expressly or by | 14 | | implication, any unlawful services to be provided or fees | 15 | | to be collected by the educational planning service | 16 | | provider. | 17 | | (5) Advise or represent, expressly or by implication, | 18 | | that consumers pay any fees that are unearned by the | 19 | | educational planning service provider. | 20 | | (6) Advise, encourage, or represent, expressly or by | 21 | | implication, that a consumer provide false or misleading | 22 | | information about financial or other circumstances to gain | 23 | | admission into a higher education institution or to be | 24 | | eligible for student financial aid, including, but not | 25 | | limited to, advising a consumer to petition for the | 26 | | appointment of a guardian for a minor for the primary |
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| 1 | | purpose of reducing the financial resources available to | 2 | | the minor in order to cause the minor to qualify for public | 3 | | or private financial aid. | 4 | | Section 25. Required disclosures. | 5 | | (a) In any marketing or advertising communications, an | 6 | | education planning service provider must provide the following | 7 | | disclosure verbatim, both orally and in writing, with the | 8 | | caption: | 9 | | CONSUMER NOTICE OF AVAILABILITY | 10 | | OF THESE SERVICES FOR FREE | 11 | | Educational planning services of this type are | 12 | | provided free of charge at no cost to you by the Illinois | 13 | | Student Assistance Commission and may also be offered by | 14 | | other public or not-for-profit entities, such as a public | 15 | | library or an institution of higher learning. | 16 | | (b) An educational planning service provider must provide | 17 | | the following warning verbatim, both orally and in writing, | 18 | | with the caption "CONSUMER NOTICE AND RIGHTS FORM" in at least | 19 | | 28-point font and the remaining portion in at least 14-point | 20 | | font, to a consumer before the consumer signs a contract for | 21 | | the educational planning service provider's services: | 22 | | CONSUMER NOTICE AND RIGHTS FORM |
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| 1 | | AVAILABILITY OF THESE SERVICES FOR FREE | 2 | | Educational planning services of this type are | 3 | | provided free of charge at no cost to you by the Illinois | 4 | | Student Assistance Commission and may be offered by other | 5 | | public or not-for-profit entities, such as a public | 6 | | library or an institution of higher learning. | 7 | | YOUR RIGHT TO CANCEL | 8 | | If you sign a contract with an educational planning | 9 | | service provider, you have the right to cancel at any time | 10 | | and receive a full refund of all unearned fees you have | 11 | | paid to the provider. You will not be responsible for | 12 | | payment of services that are not fully performed. | 13 | | IF YOU ARE DISSATISFIED OR YOU HAVE QUESTIONS | 14 | | If you are dissatisfied with an educational planning | 15 | | service provider or have any questions, please bring it to | 16 | | the attention of the Illinois Attorney General's Office. | 17 | | (c) The educational planning service provider must | 18 | | maintain proof that it has provided to the consumer the | 19 | | Consumer Notice and Rights Form in accordance with subsection | 20 | | (b) of this Section. | 21 | | (d) The consumer shall sign and date an acknowledgment | 22 | | form titled "Consumer Notice and Rights Form" that states: "I, |
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| 1 | | the consumer, have received from the educational planning | 2 | | service provider a copy of the form titled "Consumer Notice | 3 | | and Rights Form," and I have been provided the Illinois | 4 | | Student Assistance Commission's Internet website address where | 5 | | educational planning services are provided free of charge.". | 6 | | The educational planning service provider or its | 7 | | representative shall also sign and date the acknowledgment | 8 | | form, which shall include the name and address of the | 9 | | educational planning service provider. The acknowledgment form | 10 | | shall be in duplicate and shall be incorporated into the | 11 | | Consumer Notice and Rights Form under subsection (b) of this | 12 | | Section. The original acknowledgment form shall be retained by | 13 | | the educational planning service provider, and the duplicate | 14 | | copy shall be retained by the consumer. | 15 | | (e) If the acknowledgment form under subsection (d) of | 16 | | this Section is in an electronic format, then, in addition to | 17 | | the other requirements of this Act, the acknowledgment form | 18 | | shall: | 19 | | (1) contain a live link to the Illinois Student | 20 | | Assistance Commission's Internet website where educational | 21 | | planning services are offered free of charge; and | 22 | | (2) be digitally signed by the consumer in compliance | 23 | | with the provisions of the federal Electronic Signatures | 24 | | in Global and National Commerce Act concerning consumer | 25 | | disclosures, including subsection (c) of Section 101 of | 26 | | that Act. |
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| 1 | | Section 30. Cancellation of contract; refund. | 2 | | (a) A consumer may cancel a contract with an educational | 3 | | planning service provider at any time before the educational | 4 | | planning service provider has fully performed each service the | 5 | | educational planning service provider contracted to perform or | 6 | | represented it would perform. | 7 | | (b) If a consumer cancels a contract with an educational | 8 | | planning service provider, then the educational planning | 9 | | service provider shall refund all fees and compensation, with | 10 | | the exception of any earned fees for services provided. | 11 | | (c) At any time upon a material violation of this Act on | 12 | | the part of the educational planning service provider, the | 13 | | educational planning service provider shall refund all fees | 14 | | and compensation to the consumer. | 15 | | (d) An educational planning service provider shall make | 16 | | any refund required under this Act within 5 business days | 17 | | after the notice of cancellation or voiding of the contract | 18 | | due to a violation of this Act and shall include with the | 19 | | refund a full statement of account showing fees received and | 20 | | fees refunded. | 21 | | (e) Upon cancellation or voiding of the contract, all | 22 | | direct debit authorizations granted to the educational | 23 | | planning service provider by the consumer shall be considered | 24 | | revoked and voided. | 25 | | (f) Upon the termination of the contract for any reason, |
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| 1 | | the educational planning service provider shall provide timely | 2 | | notice that it no longer represents the consumer to any entity | 3 | | or agency with whom the educational planning service provider | 4 | | has had any prior communication on behalf of the consumer in | 5 | | connection with the provision of any educational planning | 6 | | services. | 7 | | Section 35. Noncompliance. | 8 | | (a) Any waiver by a consumer of any protection provided by | 9 | | or any right of the consumer under this Act: | 10 | | (1) shall be treated as void; and | 11 | | (2) may not be enforced by any federal or State court | 12 | | or any other person. | 13 | | (b) Any attempt by a person to obtain a waiver from a | 14 | | consumer of any protection provided by or any right or | 15 | | protection of the consumer or any obligation or requirement of | 16 | | the educational planning service provider under this Act is a | 17 | | violation of this Act. | 18 | | (c) Any contract for educational planning services that | 19 | | does not comply with the applicable provisions of this Act: | 20 | | (1) shall be treated as void; and | 21 | | (2) may not be enforced by any federal or State court | 22 | | or any other person. | 23 | | Upon notice of a void contract, a refund by the educational | 24 | | planning service provider to the consumer shall be made as | 25 | | provided under subsections (c), (d), (e), and (f) of Section |
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| 1 | | 30 of this Act. | 2 | | Section 40. Civil remedies; injunction. | 3 | | (a) A violation of this Act constitutes an unlawful | 4 | | practice under the Consumer Fraud and Deceptive Business | 5 | | Practices Act. All remedies, penalties, and authority granted | 6 | | to the Attorney General or State's Attorney by the Consumer | 7 | | Fraud and Deceptive Business Practices Act shall be available | 8 | | to him or her for the enforcement of this Act. | 9 | | (b) A consumer who suffers loss by reason of a violation of | 10 | | this Act may bring a civil action in accordance with the | 11 | | Consumer Fraud and Deceptive Business Practices Act to enforce | 12 | | a provision of this Act. All remedies and rights granted to a | 13 | | consumer by the Consumer Fraud and Deceptive Business | 14 | | Practices Act shall be available to the consumer bringing such | 15 | | an action. The remedies and rights provided for in this Act are | 16 | | not exclusive, but cumulative, and all other applicable claims | 17 | | are specifically preserved. | 18 | | (c) Any contract for educational planning services made in | 19 | | violation of this Act shall be null and void and of no legal | 20 | | effect. | 21 | | (d) To engage in educational planning services in | 22 | | violation of this Act is declared to be inimical to the public | 23 | | welfare and to constitute a public nuisance. The Illinois | 24 | | Student Assistance Commission may, in the name of the people | 25 | | of the State of Illinois, through the Attorney General, file a |
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| 1 | | complaint for an injunction in the circuit court to enjoin | 2 | | such person from engaging in that unlawful business. An | 3 | | injunction proceeding shall be in addition to and not in lieu | 4 | | of penalties and remedies otherwise provided in this Act. | 5 | | Section 45. Notice. The Illinois Student Assistance | 6 | | Commission must make available on its Internet website the | 7 | | most current disclosure of free support, and the educational | 8 | | planning service provider is responsible for providing to the | 9 | | consumer the most current disclosure of free support available | 10 | | on the Commission's Internet website. | 11 | | Section 90. Rules. The Illinois Student Assistance | 12 | | Commission shall adopt and enforce all reasonable rules | 13 | | necessary or appropriate for the administration of this Act.
| 14 | | Section 900. The Consumer Fraud and Deceptive Business | 15 | | Practices Act is amended by adding Section 2WWW as follows: | 16 | | (815 ILCS 505/2WWW new) | 17 | | Sec. 2WWW. Violations of the Educational Planning Services | 18 | | Consumer Protection Act. Any person who violates the | 19 | | Educational Planning Services Consumer Protection Act commits | 20 | | an unlawful practice within the meaning of this Act. ".
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