Rep. Debbie Meyers-Martin

Filed: 3/21/2023

 

 


 

 


 
10300HB3461ham001LRB103 25804 SPS 59605 a

1
AMENDMENT TO HOUSE BILL 3461

2    AMENDMENT NO. ______. Amend House Bill 3461 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Consumer Fraud and Deceptive Business
5Practices Act is amended by changing Section 2Z as follows:
 
6    (815 ILCS 505/2Z)  (from Ch. 121 1/2, par. 262Z)
7    Sec. 2Z. Violations of other Acts. Any person who
8knowingly violates the Automotive Repair Act, the Automotive
9Collision Repair Act, the Home Repair and Remodeling Act, the
10Dance Studio Act, the Physical Fitness Services Act, the
11Hearing Instrument Consumer Protection Act, the Illinois Union
12Label Act, the Installment Sales Contract Act, the Job
13Referral and Job Listing Services Consumer Protection Act, the
14Travel Promotion Consumer Protection Act, the Credit Repair
15Services Organizations Act, the Automatic Telephone Dialers
16Act, the Pay-Per-Call Services Consumer Protection Act, the

 

 

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1Telephone Solicitations Act, the Illinois Funeral or Burial
2Funds Act, the Cemetery Oversight Act, the Cemetery Care Act,
3the Safe and Hygienic Bed Act, the Illinois Pre-Need Cemetery
4Sales Act, the High Risk Home Loan Act, the Payday Loan Reform
5Act, the Predatory Loan Prevention Act, the Mortgage Rescue
6Fraud Act, subsection (a) or (b) of Section 3-10 of the
7Cigarette Tax Act, subsection (a) or (b) of Section 3-10 of the
8Cigarette Use Tax Act, the Electronic Mail Act, the Internet
9Caller Identification Act, paragraph (6) of subsection (k) of
10Section 6-305 of the Illinois Vehicle Code, Section 11-1431,
1118d-115, 18d-120, 18d-125, 18d-135, 18d-150, or 18d-153 of the
12Illinois Vehicle Code, Article 3 of the Residential Real
13Property Disclosure Act, the Automatic Contract Renewal Act,
14the Reverse Mortgage Act, Section 25 of the Youth Mental
15Health Protection Act, the Personal Information Protection
16Act, or the Student Online Personal Protection Act commits an
17unlawful practice within the meaning of this Act.
18(Source: P.A. 100-315, eff. 8-24-17; 100-416, eff. 1-1-18;
19100-863, eff. 8-14-18; 101-658, eff. 3-23-21.)
 
20    Section 10. The Credit Services Organizations Act is
21amended by changing Sections 1, 2, 3, 5, 6, 7, 8, 9, 11, 12,
2214, and 15 and by adding Sections 5.4, 5.5, 7.1, 17, 17.5, 18,
2319, 20, 21, 22, 23, and 24 as follows:
 
24    (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    (i) "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 change to the consumer's credit report that
25remains in place for at least 6 months.
26    (k) "Secretary" means the Secretary of Financial and

 

 

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

 

 

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

 

 

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

 

 

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1the benefit of any consumer who incurs damages as a result of
2any violation of this Act or 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
6repair organizations and compliance with this Act.
7    (b) A credit repair organization shall submit a report
8every 6 months to the Secretary, in a form and manner as the
9Secretary may prescribe, containing the following information:
10        (1) the number of buyers under contract with the
11    credit repair organization during the reporting term;
12        (2) the number of credit report items questioned for
13    each buyer under contract through a dispute, a complaint,
14    or some other documented action by the credit repair
15    organization since the contract start date;
16        (3) the number of items successfully removed from each
17    buyer's credit report;
18        (4) the number of items reinserted in a buyer's credit
19    reports within 6 months;
20        (5) the number of items that stayed off a buyers'
21    credit reports for 6 or more months; and
22        (6) any additional information as determined by the
23    Secretary.
24    (c) A credit repair organization shall file with the
25Secretary, every 6 months, statistical proof that confirms the

 

 

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1information used to demonstrate successful results in
2advertisements, including, but not limited to, advertisements
3sent by mail, posted on the Internet, printed in newspapers or
4other publications, and sent electronically by text or e-mail.
5    (d) The Secretary may issue reports to the General
6Assembly and the general public, that includes a compilation
7of the statistical proof received from credit repair
8organizations described in paragraph (4) of Section 5 and an
9assessment of the quality of services provided by credit
10repair organizations to consumers.
 
11    (815 ILCS 605/6)  (from Ch. 121 1/2, par. 2106)
12    Sec. 6. Before the execution of a contract or other form of
13agreement between a buyer and a credit repair services
14organization or before the credit repair organization receives
15receipt by any such organization of money or other valuable
16consideration, whichever occurs first, such organization shall
17provide the buyer with a statement, in writing, containing the
18following:
19        (1) a complete and accurate statement of the buyer's
20    right to review any file on the buyer maintained by a
21    consumer reporting agency, as provided under the Fair
22    Credit Reporting Act (15 U.S.C. Section 1681 et seq.);
23        (2) a statement that the buyer may review his consumer
24    reporting agency file at no charge if a request therefor
25    is made to such agency within 30 days after receipt by the

 

 

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1    buyer of notice that credit has been denied and if such
2    request is not made within the allotted time, the
3    approximate charge to the buyer for such review;
4        (3) a complete and accurate statement of the buyer's
5    right to dispute the completeness or accuracy of any item
6    contained in any file on the buyer maintained by a
7    consumer reporting agency;
8        (4) (blank); a complete and detailed description of
9    the services to be performed by the credit services
10    organization and the total cost to the buyer for such
11    services;
12        (5) a statement notifying the buyer that: (i) credit
13    reporting agencies have no obligation to remove
14    information from credit reports unless the information is
15    erroneous, cannot be verified or is more than 7 years old;
16    and (ii) credit reporting agencies have no obligation to
17    remove information concerning bankruptcies unless such
18    information is more than 10 years old;
19        (6) a statement asserting the buyer's right to proceed
20    against the surety bond required under Section 5.4 10; and
21        (7) the name and business address of any such surety
22    company together with the name and the number of the
23    account.
24    The credit repair services organization shall maintain on
25file, for a period of 2 years after the date the statement is
26provided, an exact copy of the statement, signed by the buyer,

 

 

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1acknowledging receipt of the statement.
2(Source: P.A. 91-357, eff. 7-29-99.)
 
3    (815 ILCS 605/7)  (from Ch. 121 1/2, par. 2107)
4    Sec. 7. (a) Each contract between the buyer and a credit
5repair services organization for the purchase of the services
6of the credit repair services organization shall be in
7writing, dated, signed by the buyer and an authorized employee
8of the credit repair organization, and shall include:
9    (1) (blank); a conspicuous statement in boldfaced type, in
10immediate proximity to the space reserved for the signature of
11the buyer, as follows:
12    "You, the buyer, may cancel this contract at any time
13before midnight of the third day after the date of the
14transaction. See the attached notice of cancellation form for
15an explanation of this right";
16    (2) a complete and detailed description of the terms and
17conditions of payment consistent with Section 5 of this Act,
18including the total of all payments to be made by the buyer,
19whether to the credit repair organization credit services
20organization or to another person;
21        (A) If a buyer seeks to stop using the services of a
22    credit repair organization, the buyer shall submit a
23    request to the credit repair organization to cancel the
24    contract. A credit repair organization shall allow
25    submission of a cancellation request electronically.

 

 

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1        (B) A credit repair organization that has received a
2    request to cancel services for a buyer shall process the
3    cancellation within 15 days after the postmark of any
4    written request or of receipt of an electronic request,
5    and cease to conduct any additional work on behalf of the
6    buyer.
7        (C) Consumers whose cancellation requests are
8    processed and completed, remain obligated to pay for any
9    permanent change resulting from actions taken by the
10    credit repair organization during the contract term from
11    the contract start date through the date the cancellation
12    is processed.
13    (3) a full and detailed description of the services to be
14performed by the credit repair services organization for the
15buyer, including all guarantees and all promises of full or
16partial refunds, and the estimated date by which the services
17are to be performed or the estimated length of time for
18performing the services; and
19    (4) the address of the credit repair services
20organization's principal place of business and the name and
21address of its agent in the State authorized to receive
22service of process.
23    (b) (Blank). The contract must have two easily detachable
24copies of a notice of cancellation. The notice must be in
25boldfaced type and in the following form:
26
"Notice of Cancellation"

 

 

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1    "You may cancel this contract, without any penalty or
2obligation, within three days after the date the contract is
3signed.
4    If you cancel, any payment made by you under this contract
5will be returned within 10 days after the date of receipt by
6the seller of your cancellation notice.
7    To cancel this contract, mail or deliver a signed, dated
8copy of this cancellation notice, or other written notice to:
9    (name of seller) at (address of seller) (place of
10business) not later than midnight (date)
11I hereby cancel this transaction."
12..............................  .............................
13       (date)                      (purchaser's signature)
14    (c) The credit repair services organization shall give to
15the buyer a copy of the completed contract and all other
16documents the credit repair services organization requires the
17buyer to sign at the time they are signed. A credit repair
18organization shall not unreasonably deny a buyer's request for
19an additional copy of the contract or any other document the
20buyer signed.
21(Source: P.A. 85-1384.)
 
22    (815 ILCS 605/7.1 new)
23    Sec. 7.1. Recordkeeping. The credit repair organization
24shall maintain on file, for a period of 2 years after the date
25the statement required in Section 7 is provided, an exact copy

 

 

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1of the statement, signed by the buyer, acknowledging receipt
2of the statement.
 
3    (815 ILCS 605/8)  (from Ch. 121 1/2, par. 2108)
4    Sec. 8. (a) Any contract for services which does not
5comply with applicable provisions of this article shall be
6void and unenforceable as contrary to public policy. Any
7waiver by a buyer of the provisions of this Act shall be deemed
8void and unenforceable by a credit services organization as
9contrary to public policy. Any attempt by a credit repair
10services organization to have a buyer waive rights granted by
11this Act shall constitute a violation of this Act.
12    (b) The provisions of this Act shall apply to any person
13who seeks to evade its application by any device, subterfuge,
14or pretense, including, without limitation:
15        (1) instructing or suggesting that a buyer make
16    payments into an account controlled by a third party;
17        (2) using any agents, affiliates, or subsidiaries in
18    an attempt to avoid the application of the provisions of
19    this Act; or
20        (3) having any affiliation or other business
21    arrangement with an entity that is exempt from the
22    provisions of this Act for the purpose of evading the
23    provisions of this Act.
24    (c) A violation of this Section shall constitute a
25violation of this Act.

 

 

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1(Source: P.A. 85-1384.)
 
2    (815 ILCS 605/9)  (from Ch. 121 1/2, par. 2109)
3    Sec. 9. (a) A credit repair services organization shall
4file a registration statement with the Secretary of State
5before conducting business in this State. The registration
6statement shall contain:
7        (1) the name and address of the credit repair services
8    organization;
9        (2) the name and address of the registered agent
10    authorized to accept service of process on behalf of the
11    credit repair services organization;
12        (3) the name and address of any person who directly or
13    indirectly owns or controls 10 percent or more of the
14    outstanding shares of stock in the credit repair services
15    organization; and
16        (4) the name, numbers, and location of the surety
17    company issuing a surety bond maintained as required by
18    Section 5.4 10 of this Act.
19    (b) The registration statement must also contain either:
20        (1) a full and complete disclosure of any litigation
21    or unresolved complaint filed with a governmental
22    authority of this State, any other state or the United
23    States relating to the operation of the credit repair
24    services organization; or
25        (2) a notarized statement that states that there has

 

 

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1    been no litigation or unresolved complaint filed with a
2    governmental authority of this State, any other state or
3    the United States relating to the operation of the credit
4    repair services organization.
5    (c) The credit repair services organization shall update
6such statement not later than 30 days the 90th day after the
7date on which a change in the information required in the
8statement occurs.
9    (d) Each credit repair services organization registering
10under this Section shall maintain a copy of the registration
11statement in their files. The credit repair services
12organization shall allow a buyer to inspect the registration
13statement on request.
14    (e) The Department Secretary of State may charge each
15credit services organization that files a registration
16statement a reasonable fee not to exceed $100 to cover the cost
17of filing.
18(Source: P.A. 85-1384.)
 
19    (815 ILCS 605/11)  (from Ch. 121 1/2, par. 2111)
20    Sec. 11. Any person injured by a violation of this Act or
21by the credit repair services organization's breach of a
22contract entered into pursuant to Section 7 of this Act, may
23bring any action for recovery of actual damages and statutory
24damages of $5,000 for the first offense and $10,000 for a
25second and any subsequent offense. Such person may also be

 

 

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1awarded punitive damages, reasonable attorney's fees and court
2costs.
3    Where the buyer demonstrates actual or statutory damages,
4proof of reliance shall not be required to pursue a claim based
5on misrepresentation, false statements, or the omission of any
6material fact.
7(Source: P.A. 85-1384.)
 
8    (815 ILCS 605/12)  (from Ch. 121 1/2, par. 2112)
9    Sec. 12. A. Nothing in this Act shall be construed to
10restrict the exercise of powers or the performance of the
11duties of the Attorney General, a State's Attorney, or federal
12law enforcement. The Attorney General, the State's Attorney of
13any county, or a buyer may bring an action in a circuit court
14to enjoin a violation of this Act. In addition to any
15injunction, the Attorney General or any State's Attorney or
16any county, in the name of the People of the State of Illinois,
17may seek to recover damages pursuant to this Act or any other
18relief permitted by law. The Attorney General may enforce a
19violation of this Act as an unlawful practice under the
20Consumer Fraud and Deceptive Business Practices Act.
21(Source: P.A. 85-1384.)
 
22    (815 ILCS 605/14)  (from Ch. 121 1/2, par. 2114)
23    Sec. 14. Construction.
24    (a) For purposes of carrying out the objectives of this

 

 

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

 

 

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1U.S.C. Section 6101 et seq.), and its implementing
2regulations, 16 CFR 310.1 et seq., or of the credit repair
3organizations Act (15 U.S.C. Section 1679 et seq.) shall also
4be a violation of this Act.
5(Source: P.A. 85-1384.)
 
6    (815 ILCS 605/17 new)
7    Sec. 17. Rulemaking.
8    (a) In addition to powers granted to the Department this
9Act, the Department may adopt rules consistent with the
10purposes of this Act, including, but not limited to:
11        (1) rules in connection with the activities of credit
12    repair organizations as may be necessary and appropriate
13    for the protection of consumers in this State;
14        (2) rules as may be necessary and appropriate to
15    define and deter improper or fraudulent business practices
16    in connection with the activities of credit repair
17    organizations;
18        (3) rules that define the terms used in this Act and as
19    may be necessary and appropriate to interpret and
20    implement the provisions of this Act; and
21        (4) rules to prevent evasion of this Act; and
22        (5) rules as may be necessary for the enforcement and
23    administration of this Act.
24    (b) The Secretary is may make specific rulings, demands,
25and findings that the Secretary deems necessary for the proper

 

 

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1conduct of any credit repair organization.
 
2    (815 ILCS 605/17.5 new)
3    Sec. 17.5. Regulatory assessment.
4    (a) Every credit repair organization shall annually pay to
5the Department its pro rata share of the cost for
6administration of the Act, as estimated by the Department, for
7the current year and for any deficit actually incurred in the
8administration of the Act in prior years. Every credit repair
9organization's pro rata share shall be the percentage that the
10number of buyers under contract with the credit repair
11organization bears to the total buyers under contract with all
12credit repair organizations in the previous year, or any other
13method of pro rata fee assessment as established by rule.
14    (b) The Secretary may establish other fees by rule as
15necessary to administer and enforce this Act.
16    (c) All fees received under this Section shall be
17nonrefundable.
 
18    (815 ILCS 605/18 new)
19    Sec. 18. Evasion. Any agreement, contract, or transaction
20that is structured to evade this Act shall be deemed to covered
21by this Act.
 
22    (815 ILCS 605/19 new)
23    Sec. 19. Examination and reports.

 

 

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1    (a) The Secretary may examine the business affairs of a
2credit report organization for compliance with this Act as
3often as the Secretary deems necessary and proper. The
4Department may adopt rules with respect to the frequency and
5manner of examination. The Secretary shall appoint a suitable
6person to perform an examination. The Secretary and his or her
7appointees may examine under oath the entire books, records,
8documents, and operations of each credit repair organization
9and its subsidiary, affiliate, or agent, and may examine any
10of the credit repair organization's or the officers,
11directors, employees, and agents of its subsidiaries,
12affiliates, or agents.
13    (b) Affiliates of a credit repair organization shall be
14subject to examination by the Secretary on the same terms as
15the credit repair organization.
16    (c) The expenses of any examination of the credit repair
17organization and affiliates shall be borne by the licensee and
18assessed by the Secretary as established by rule.
19    (d) In addition to any reports required under this Act,
20every licensee shall file any other report that the Secretary
21requires.
 
22    (815 ILCS 605/20 new)
23    Sec. 20. Violations. It is a violation of this Act for a
24credit repair organization, or other person subject to this
25Act to:

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    (c) Any information provided by a credit repair
2organization under subsections (a) and (b) and Section 5.5,
3other than personal identifiable information of a buyer, shall
4be a public record subject to disclosure under the Freedom of
5Information Act.
 
6    (815 ILCS 605/23 new)
7    Sec. 23. Judicial review. All final administrative
8decisions of the Department under this Act, all amendments and
9modifications of final administrative decisions, and any rules
10adopted by the Department under this Act, shall be subject to
11judicial review under the provisions of the Administrative
12Review Law.
 
13    (815 ILCS 605/24 new)
14    Sec. 24. Superiority of this Act. To the extent this Act
15conflicts with any other State laws, this Act is superior and
16supersedes those laws.
 
17    (815 ILCS 605/4 rep.)
18    (815 ILCS 605/10 rep.)
19    Section 15. The Credit Services Organizations Act is
20amended by repealing Sections 4 and 10.
 
21    Section 99. Effective date. This Act takes effect January
221, 2024.".