Illinois General Assembly - Full Text of SB2135
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Full Text of SB2135  103rd General Assembly




State of Illinois
2023 and 2024


Introduced 2/10/2023, by Sen. Sara Feigenholtz


815 ILCS 505/2Z  from Ch. 121 1/2, par. 262Z
815 ILCS 605/1  from Ch. 121 1/2, par. 2101
815 ILCS 605/3  from Ch. 121 1/2, par. 2103
815 ILCS 605/5  from Ch. 121 1/2, par. 2105
815 ILCS 605/5.5 new
815 ILCS 605/6  from Ch. 121 1/2, par. 2106
815 ILCS 605/7  from Ch. 121 1/2, par. 2107
815 ILCS 605/8  from Ch. 121 1/2, par. 2108
815 ILCS 605/9  from Ch. 121 1/2, par. 2109
815 ILCS 605/11  from Ch. 121 1/2, par. 2111
815 ILCS 605/14  from Ch. 121 1/2, par. 2114
815 ILCS 605/15  from Ch. 121 1/2, par. 2115
815 ILCS 605/17 new
815 ILCS 605/10 rep.

    Amends the Credit Services Organizations Act. Changes the name of the Act to the Credit Repair Organizations Act. Provides that the Director of Financial and Professional Regulation shall oversee the activities of credit repair organizations and compliance with the Act. Provides that a credit repair organization shall submit a report every 6 months to the Director containing specified information. Provides that the Director may adopt rules necessary to administer the Act. Makes changes in provisions concerning contracts between a buyer and a credit repair organization; registration of credit repair organizations; violations of the Act; and remedies. Repeals provisions concerning surety bonds. Defines terms. Repeals provisions concerning surety bonds. Amends the Consumer Fraud and Deceptive Business Practices Act to make conforming changes. Effective January 1, 2024.

LRB103 25803 SPS 52154 b





SB2135LRB103 25803 SPS 52154 b

1    AN ACT concerning business.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Consumer Fraud and Deceptive Business
5Practices Act is amended by changing Section 2Z 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
17Telephone Solicitations Act, the Illinois Funeral or Burial
18Funds Act, the Cemetery Oversight Act, the Cemetery Care Act,
19the Safe and Hygienic Bed Act, the Illinois Pre-Need Cemetery
20Sales Act, the High Risk Home Loan Act, the Payday Loan Reform
21Act, the Predatory Loan Prevention Act, the Mortgage Rescue
22Fraud Act, subsection (a) or (b) of Section 3-10 of the
23Cigarette Tax Act, subsection (a) or (b) of Section 3-10 of the



SB2135- 2 -LRB103 25803 SPS 52154 b

1Cigarette Use Tax Act, the Electronic Mail Act, the Internet
2Caller Identification Act, paragraph (6) of subsection (k) of
3Section 6-305 of the Illinois Vehicle Code, Section 11-1431,
418d-115, 18d-120, 18d-125, 18d-135, 18d-150, or 18d-153 of the
5Illinois Vehicle Code, Article 3 of the Residential Real
6Property Disclosure Act, the Automatic Contract Renewal Act,
7the Reverse Mortgage Act, Section 25 of the Youth Mental
8Health Protection Act, the Personal Information Protection
9Act, or the Student Online Personal Protection Act commits an
10unlawful practice within the meaning of this Act.
11(Source: P.A. 100-315, eff. 8-24-17; 100-416, eff. 1-1-18;
12100-863, eff. 8-14-18; 101-658, eff. 3-23-21.)
13    Section 10. The Credit Services Organizations Act is
14amended by changing Sections 1, 3, 5, 6, 7, 8, 9, 11, 14, and
1515, and by adding Sections 5.5 and 17 as follows:
16    (815 ILCS 605/1)  (from Ch. 121 1/2, par. 2101)
17    Sec. 1. This Act shall be known and may be cited as the
18"Credit Repair Services Organizations Act".
19(Source: P.A. 85-1384.)
20    (815 ILCS 605/3)  (from Ch. 121 1/2, par. 2103)
21    Sec. 3. As used in this Act:
22    (a) "Buyer" means an individual who is solicited to
23purchase or who purchases the services of a credit repair



SB2135- 3 -LRB103 25803 SPS 52154 b

1services organization.
2    (b) "Consumer reporting agency" has the meaning assigned
3by Section 603(f), Fair Credit Reporting Act (15 U.S.C.
4Section 1681a(f)).
5    (c) "Extension of Credit" means the right to defer payment
6of a debt or to incur a debt and defer its payment offered or
7granted primarily for personal, family, or household purposes.
8    (d) "Credit Repair Services Organization" means a person
9who, with respect to the extension of credit by others and in
10return for the payment of money or other valuable
11consideration, provides, or represents that the person can or
12will provide, any of the following services:
13        (i) improving a buyer's credit record, history, or
14    rating;
15        (ii) obtaining an extension of credit for a buyer; or
16        (iii) providing advice or assistance to a buyer with
17    regard to either subsection (i) or (ii).
18    "Credit Repair Services Organization" does not include any
19of the following:
20        (i) a person authorized to make loans or extensions of
21    credit under the laws of this State or the United States
22    who is subject to regulation and supervision by this State
23    or the United States, or a lender approved by the United
24    States Secretary of Housing and Urban Development for
25    participation in a mortgage insurance program under the
26    National Housing Act (12 U.S.C. Section 1701 et seq.);



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1        (ii) a bank or savings and loan association whose
2    deposits or accounts are eligible for insurance by the
3    Federal Deposit Insurance Corporation or the Federal
4    Savings and Loan Insurance Corporation, or a subsidiary of
5    such a bank or savings and loan association;
6        (iii) a credit union doing business in this State;
7        (iv) a nonprofit organization exempt from taxation
8    under Section 501(c)(3) of the Internal Revenue Code of
9    1986, provided that such organization does not charge or
10    receive any money or other valuable consideration prior to
11    or upon the execution of a contract or other agreement
12    between the buyer and the nonprofit organization;
13        (v) a person licensed as a real estate broker by this
14    state if the person is acting within the course and scope
15    of that license;
16        (vi) an attorney licensed or otherwise authorized to
17    practice in this State if: a person licensed to practice
18    law in this State acting within the course and scope of the
19    person's practice as an attorney;
20            (1) the attorney's practice does not principally
21        involve services regulated by this Act, other than
22        litigation;
23            (2) the attorney does not have any relationship
24        with a credit repair organization that provides
25        services regulated by this Act; or
26            (3) any services provided by the attorney that are



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1        regulated by this Act and are incidental to the
2        primary purpose of the representation;
3        (vii) a broker-dealer registered with the Securities
4    and Exchange Commission or the Commodity Futures Trading
5    Commission acting within the course and scope of that
6    regulation;
7        (viii) a consumer reporting agency; and
8        (ix) a residential mortgage loan broker or banker who
9    is duly licensed under the Illinois Residential Mortgage
10    License Act of 1987.
11    (e) "Person" means an individual, corporation,
12partnership, joint venture or any business entity.
13    (f) "Consumer report" has the meaning assigned by Section
141681a(d) of the Fair Credit Reporting Act (15 U.S.C. Section
16    (g) "Contract start date" means the date the consumer
17entered into a contract with a credit repair organization.
18    (h) "Director" means the Director of Financial and
19Professional Regulation.
20    (i) "Permanent change" means any removal of negative items
21from a consumer's credit report or any change that turns a
22negative item on a consumer's credit report into a neutral or
23positive item change to the consumer's credit report that
24remains in place for at least 6 months.
25(Source: P.A. 88-120.)



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



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1        State. If a credit services organization is in
2        compliance with this subsection the salespersons,
3        agents, and representatives who sell the services of
4        such organization shall not be required to obtain the
5        surety bond provided for by this Act.
6    (1.5) Deny a buyer's request for a copy of all
7communications contemporaneously sent to a credit reporting
8agency related to the achievement of a specified permanent
10    (2) Charge or receive any money or other valuable
11consideration solely for the referral of a buyer to a retail
12seller who will or may extend credit to the buyer if such
13extension of credit is in substantially the same terms as
14those available to the general public.
15    (2.5) Pay, offer, or receive any money or other variable
16consideration for the referral of a buyer to or from the credit
17repair organization.
18    (2.6) Represent temporary changes to a buyer's credit
19report, as described in paragraph (4) of subsection (b) of
20Section 5.5 as successful results in advertisements.
21    (3) Make, or advise any buyer to make, any statement that
22is untrue or misleading, or that should be known by the
23exercise of reasonable care to be untrue or misleading, with
24respect to a buyer's credit reporting agency or to any person
25who has extended credit to a buyer or to whom a buyer has made
26application for an extension of credit.



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1    (4) Make or use any untrue or misleading representations
2in the offer or sale of the services of a credit repair
3services organization or engage, directly or indirectly, in
4any act, practice or course of business intended to defraud or
5deceive a buyer in connection with the office or sale of such
6services; including but not limited to: the amount or type of
7credit a consumer can expect to receive as a result of the
8performance of the services offered; the qualifications,
9training or experience of its personnel; or the amount of
10credit improvement the consumer can expect to receive as a
11result of the services.
12(Source: P.A. 85-1384.)
13    (815 ILCS 605/5.5 new)
14    Sec. 5.5. Duties of the Director.
15    (a) The Director shall oversee the activities of credit
16repair organizations and compliance with this Act.
17    (b) A credit repair organization shall submit a report
18every 6 months to the Director, in a form and manner as the
19Director may prescribe, containing the following information:
20        (1) the number of buyers under contract with the
21    credit repair organization during the reporting term;
22        (2) the number of credit report items questioned for
23    each buyer under contract through a dispute, a complaint,
24    or some other documented action by the credit repair
25    organization since the contract start date;



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1        (3) the number of items successfully removed from each
2    buyer's credit report;
3        (4) the number of items reinserted in a buyer's credit
4    reports within 6 months;
5        (5) the number of items that stayed off a buyers'
6    credit reports for 6 or more months; and
7        (6) any additional information as determined by the
8    Director.
9    (c) A credit repair organization shall file with the
10Director, every 6 months, the statistical proof that confirms
11the information used to demonstrate successful results in
12advertisements, including, but not limited to, advertisements
13sent by mail, posted on the Internet, printed in newspapers or
14other publications, and sent electronically by text or e-mail.
15    (d) The Director shall routinely audit the accuracy of the
16advertisements sent by credit services organizations.
17    (e) The Director shall issue an annual report to the
18General Assembly, including a compilation of the statistical
19proof received from credit repair organizations as described
20in subsection (c) and an assessment of the quality of services
21provided by credit repair organizations to consumers.
22    (815 ILCS 605/6)  (from Ch. 121 1/2, par. 2106)
23    Sec. 6. Before the execution of a contract or other form of
24agreement between a buyer and a credit repair services
25organization or before the receipt by any such organization of



SB2135- 10 -LRB103 25803 SPS 52154 b

1money or other valuable consideration, whichever occurs first,
2such organization shall provide the buyer with a statement, in
3writing, containing the 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



SB2135- 11 -LRB103 25803 SPS 52154 b

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



SB2135- 12 -LRB103 25803 SPS 52154 b

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



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



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1       (date)                      (purchaser's signature)
2    (c) The credit repair services organization shall give to
3the buyer a copy of the completed contract and all other
4documents the credit repair services organization requires the
5buyer to sign at the time they are signed.
6(Source: P.A. 85-1384.)
7    (815 ILCS 605/8)  (from Ch. 121 1/2, par. 2108)
8    Sec. 8. (a) Any contract for services which does not
9comply with applicable provisions of this article shall be
10void and unenforceable as contrary to public policy. Any
11waiver by a buyer of the provisions of this Act shall be deemed
12void and unenforceable by a credit services organization as
13contrary to public policy. Any attempt by a credit repair
14services organization to have a buyer waive rights granted by
15this Act shall constitute a violation of this Act.
16    (b) The provisions of this Act shall apply to any person
17who seeks to evade its application by any device, subterfuge,
18or pretense, including, without limitation:
19        (1) instructing or suggesting that a buyer make
20    payments into an account controlled by a third party;
21        (2) using any agents, affiliates, or subsidiaries in
22    an attempt to avoid the application of the provisions of
23    this Act; or
24        (3) having any affiliation or other business
25    arrangement with an entity that is exempt from the



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



SB2135- 16 -LRB103 25803 SPS 52154 b

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



SB2135- 17 -LRB103 25803 SPS 52154 b

1bring any action for recovery of actual damages. Such person
2may also be awarded punitive damages, reasonable attorney's
3fees and court costs.
4    (b) A violation of this Act shall be subject to a civil
5penalty of $5,000 for a first offense and $10,000 for a second
6and any subsequent offense.
7(Source: P.A. 85-1384.)
8    (815 ILCS 605/14)  (from Ch. 121 1/2, par. 2114)
9    Sec. 14. (a) In an action under this Act the burden of
10proving an exemption under paragraph (d) of Section 3 is on the
11person claiming the exemption.
12    (b) Proof of reliance shall not be required to pursue a
13claim based on misrepresentation, false statements, or the
14omission of any material fact.
15(Source: P.A. 85-1384.)
16    (815 ILCS 605/15)  (from Ch. 121 1/2, par. 2115)
17    Sec. 15. The remedies provided by this Act are in addition
18to other remedies provided by law. A violation of this Act
19shall also constitute a violation of the Consumer Fraud and
20Deceptive Business Practices Act. A violation of the
21Telemarketing and Consumer Fraud and Abuse Prevention Act (15
22U.S.C. Section 6101 et seq.), and its implementing
23regulations, 16 CFR 310.1 et
seq., or of the Credit Repair
24Organizations Act (15 U.S.C. Section 1679 et seq.) shall also



SB2135- 18 -LRB103 25803 SPS 52154 b

1be a violation of this Act.
2(Source: P.A. 85-1384.)
3    (815 ILCS 605/17 new)
4    Sec. 17. Rulemaking. The Director may adopt rules
5necessary to administer this Act.
6    (815 ILCS 605/10 rep.)
7    Section 15. The Credit Services Organizations Act is
8amended by repealing Section 10.
9    Section 99. Effective date. This Act takes effect January
101, 2024.