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90_SB1863
New Act
735 ILCS 5/2-209 from Ch. 110, par. 2-209
815 ILCS 413/Act rep.
815 ILCS 505/2Z from Ch. 121 1/2, par. 262Z
Creates the Telemarketing Registration and Fraud
Prevention Act. Requires sellers engaged in telemarketing
to register with the Attorney General, keep certain records,
and make specified disclosures to consumers. Prohibits
various practices related to telemarketing, and establishes
civil and criminal penalties. Repeals the Telephone
Solicitations Act and amends the Consumer Fraud and Deceptive
Business by deleting a reference to the repealed Act. Amends
the Code of Civil Procedure by making persons who engage in
certain telemarketing activities subject to the jurisdiction
of the courts of this State. Effective January 1, 1999.
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1 AN ACT in relation to telemarketing.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short Title. This Act may be cited as the
5 Telemarketing Registration and Fraud Prevention Act.
6 Section 5. Definitions. In this Act:
7 "Consumer" means a person who is or may be required to
8 pay for goods or services offered by a telemarketer through
9 telemarketing.
10 "Goods or services" means any real property or any
11 tangible or intangible personal property or services of any
12 kind provided or offered to a person.
13 "Investment opportunity" means anything tangible or
14 intangible, that is offered for sale, sold, or traded based
15 wholly or in part on representations, either express or
16 implied, about past, present, or future income, profit, or
17 appreciation.
18 "Material element" means any factor likely to affect a
19 person's choice of, or conduct regarding, goods or services,
20 and includes currency values and comparative expressions of
21 value including, but not limited to, percentages or
22 multiples.
23 "Prize" means anything offered or purportedly offered and
24 given or purportedly given to a person by chance.
25 "Prize promotion" means a sweepstakes or other game of
26 chance or an oral or written, express or implied
27 representation that a person has won, has been selected to
28 receive, or is eligible to receive a prize or purported
29 prize.
30 "Seller" means any person who, in connection with a
31 telemarketing transaction, employs or otherwise engages the
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1 services of one or more telemarketers to provide, offer to
2 provide, or arrange for others to provide goods or services
3 to the consumer in exchange for consideration.
4 "Solicitation" means a written or oral notification or
5 advertisement that meets any one of the following terms:
6 (a) The notification or advertisement is
7 transmitted by or on behalf of the seller and by any
8 printed, audio, video, cinematic, telephonic, or
9 electronic means.
10 (b) In the case of a notification or advertisement
11 other than by telephone, either of the following
12 conditions is met:
13 (1) The notification or advertisement is
14 followed by a telephone call from a telemarketer or
15 seller.
16 (2) The notification or advertisement invites
17 a response by telephone, and through that response,
18 a telemarketer attempts to make a sale of goods or
19 services.
20 "Telemarketer" means any person who, in connection with
21 telemarketing, initiates or receives telephone calls to or
22 from a consumer in this State. A telemarketer includes, but
23 is not limited to, any such person who is an owner, operator,
24 officer, director, or partner to the management activities of
25 a business.
26 "Telemarketing" means a plan, program, or campaign which
27 is conducted to induce the purchase of goods or services by
28 use of one or more telephones and which involves more than
29 one telephone call.
30 Section 10. Registration.
31 (a) No person shall act as a seller without first having
32 registered with the Attorney General.
33 (1) The initial application for registration shall
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1 be made at least 60 days prior to offering consumer goods
2 or services, or offering for sale consumer goods or
3 services through any medium, and an application for
4 renewal shall be made on an annual basis thereafter.
5 (2) The application for a certificate of
6 registration or renewal shall include, but not be limited
7 to, the following information:
8 (A) The true name, current address, telephone
9 number, and location of the seller, including each
10 name under which the seller intends to engage in
11 telemarketing.
12 (B) Each occupation or business that the
13 seller's principal owner has engaged in for 2 years
14 immediately preceding the date of the application.
15 (C) Whether any person with an ownership
16 interest in the seller or any person involved in the
17 management of the seller has been convicted or pled
18 guilty to or is being prosecuted by indictment for
19 racketeering, violations of State or federal
20 securities laws, or a theft offense.
21 (D) Whether there has been entered against any
22 person with an ownership interest in the seller or
23 any person involved in the management of the seller
24 an injunction, temporary restraining order or a
25 final judgment in any civil or administrative
26 action, involving fraud, theft, racketeering,
27 embezzlement, fraudulent conversion, or
28 misappropriation of property, including any pending
29 litigation against the applicant.
30 (E) Whether the seller, at any time during the
31 previous 7 years, has filed for bankruptcy, been
32 adjudged bankrupt, or been reorganized because of
33 insolvency.
34 (F) The true name, current home address, date
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1 of birth, social security number, and all other
2 names of the following:
3 (i) Each telemarketer or other person to
4 be employed by the seller;
5 (ii) Each person participating in or
6 responsible for the management of the seller's
7 business;
8 (iii) Each person principally responsible
9 for the management of the seller's business.
10 (G) The name, address, and account number of
11 every institution where banking or any other
12 monetary transactions are done by the seller.
13 (H) A copy of all scripts, outlines, or
14 presentation material the seller will require the
15 telemarketer to use when soliciting as well as all
16 sales information to be provided by the seller to a
17 consumer in connection with any solicitation.
18 (b) The application for registration or renewal
19 shall be accompanied by a surety bond in the amount of
20 $100,000. The bond shall provide for the indemnification
21 of any person suffering a loss as the result of violation
22 of this Act. The surety for any cause may cancel the bond
23 upon giving a 60-day written notice by certified mail to
24 the seller and to the Attorney General. Unless the bond
25 is replaced by that of another surety before the
26 expiration of the 60-day notice of cancellation, the
27 registration of the seller shall be treated as lapsed.
28 (1) The surety bond shall remain in effect for
29 3 years after the date the seller ceases to operate
30 in this State.
31 (2) Any seller required under this Act to file
32 a bond with a registration application may file, in
33 lieu of the bond, a certificate of deposit, cash, or
34 government bond in the amount of $100,000. The
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1 Attorney General shall hold the cash, certificate of
2 deposit, or government bond for 3 years from the
3 period the seller ceases to operate or registration
4 lapses in order to pay claims made against the
5 seller during its period of operation.
6 (3) The registration of the seller shall be
7 treated as lapsed if, at any time, the amount of the
8 bond, cash, certificate of deposit, or government
9 bond falls below the amount required by this
10 Section.
11 (4) The aggregate liability of the surety
12 company to all persons injured by a seller or
13 telemarketer's violations shall not exceed the
14 amount of the bond.
15 (c) Applicants for registration and registered
16 sellers shall pay application, registration, and renewal
17 fees to the Attorney General in amounts that are
18 determined by the Attorney General to be sufficient to
19 cover the processing, administrative, and investigative
20 costs incurred by the Attorney General in relation to
21 applicants for registration and registered sellers. The
22 Attorney General shall adopt rules setting forth the
23 amounts of the fees and setting forth any other
24 conditions or requirements deemed advisable by the
25 Attorney General related to the time for and the manner
26 of payment of fees and appropriate penalties (including
27 but not limited to revocation or suspension of licenses
28 and denial or rejection of applications) for failure to
29 pay fees or comply with other conditions or requirements
30 contained in the rules.
31 (d) The following shall constitute a violation of
32 this Act and shall be a Class 4 felony:
33 (1) Failure to register.
34 (2) Failure to meet the above security
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1 requirements.
2 (3) Failure to maintain a currently valid
3 certificate of registration.
4 (4) Including any false or misleading
5 information on a registration application.
6 (5) Misrepresenting that a seller is
7 registered.
8 Section 15. Recordkeeping Requirements.
9 (a) A seller shall keep, for a period of 24 months from
10 the date the record is produced, records of all financial
11 transactions, written notices, disclosures and
12 acknowledgments, in the form, manner, format, or place as
13 they keep such records in the ordinary course of business,
14 including but not limited to:
15 (1) All substantially different advertising,
16 brochures, telemarketing scripts, and promotional
17 materials.
18 (2) The name and last known address of each prize
19 recipient and the prize awarded.
20 (3) The name and last known address of each
21 consumer who purchased goods or services, the goods or
22 services purchased, the date the goods or services were
23 shipped or provided and the amount provided, and the
24 amount paid by the consumer for the goods or services.
25 (4) The name, any fictitious name used, the last
26 known home address and telephone number, and the job
27 title for all current and former employees directly
28 involved in telephone sales; however, if the seller
29 permits fictitious names to be used by employees, each
30 fictitious name must be traceable to only one specific
31 employee.
32 (5) All written authorizations required to be
33 provided or received under this Act.
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1 (b) In the event of any dissolution or termination of
2 the seller, the seller's principal owner shall maintain all
3 records as required under this Section. In the event of any
4 sale, assignment, or other change in ownership by the seller,
5 the successor shall maintain all records required under this
6 Section.
7 Section 20. Acts and Practices not Covered. The
8 following acts and practices are not covered under this Act:
9 (a) Telephone calls in which the sale of goods or
10 services is not completed, and payment or authorization
11 of payment is not required, until after a face-to-face
12 sales presentation.
13 (b) Telephone calls initiated by a consumer that
14 are not the result of any solicitation by a seller or
15 telemarketer.
16 Section 25. Requirements and Prohibitions.
17 (a) The telemarketer shall provide all of the following
18 when contacting a consumer:
19 (1) Within the first minute of the call and prior
20 to any sales pitch:
21 (A) that the true purpose of the telephone
22 call is to make a sale;
23 (B) the legal names of the seller and any
24 company on whose behalf the solicitation is being
25 made;
26 (C) either the telemarketer's legal name or
27 the fictitious name registered in accordance with
28 Section 15; and
29 (D) the identity of the goods or services
30 being sold.
31 (2) The total cost of the goods or services that
32 are the subject of the telemarketing sales call.
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1 (3) Any restrictions, limitations, or conditions
2 concerning the purchase of goods or services that are the
3 subject of the telemarketing sales call.
4 (4) Any material element of the performance,
5 quality, efficacy, nature, or basic characteristics of
6 goods or services that are the subject of a telemarketing
7 sales call.
8 (5) Any material element of the nature or terms of
9 the refund, cancellation, exchange, or repurchase
10 policies.
11 (6) Any material element of an investment
12 opportunity being offered, including benefits, the price
13 of the land or other investment, the location of the
14 investment, and the reasonable likelihood of success of
15 the investment opportunity.
16 (7) Any material elements of a prize promotion,
17 including:
18 (A) a description of the prize;
19 (B) its market value;
20 (C) all material conditions to receive or
21 redeem the prize;
22 (D) the actual number of each prize to be
23 awarded;
24 (E) the odds of being able to receive the
25 prize and, if the odds are not calculable in
26 advance, the factors and methods used in calculating
27 the odds;
28 (F) that no purchase or payment of any kind is
29 required to win a prize or to participate in a prize
30 promotion; and
31 (G) the no-purchase or no-payment method of
32 participating in the prize promotion, with either
33 instructions on how to participate or an address or
34 a local or toll-free telephone number to which
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1 consumers may write or call for information on how
2 to participate.
3 (b) A sales transaction shall only be considered final
4 after the consumer has received a notice as required by this
5 subsection (b).
6 The seller shall furnish the consumer, in the same
7 language as that principally used in the sales presentation,
8 a written notice, which shall contain in not less than
9 12-point boldface type, a statement in substantially the
10 following form:
11 "You, the consumer, may cancel this transaction without
12 any penalty or obligation at any time prior to midnight of
13 the third business day after receipt of this notice. If you
14 cancel, any payments made by you under the sale will be
15 returned within 10 business days following receipt by the
16 seller of your written notice of cancellation and any
17 security interest arising out of the transaction will be
18 canceled.
19 If you cancel, you must make available to the seller at
20 your residence, in substantially as good condition as when
21 you received them, any goods delivered to you under this
22 contract of sale; or you may, if you wish, comply with the
23 instruction of the seller regarding the return shipment of
24 the goods at the seller's expense and risk.
25 If you do make the goods available to the seller and the
26 seller does not pick them up within 20 days of the date of
27 your notice of cancellation, or agree to pay the expense for
28 their return, you may retain or dispose of the goods without
29 any further obligation. If you fail to make the goods
30 available to the seller, or if you agree to return the goods
31 to the seller and fail to do so, then you remain liable for
32 performance of all obligations under the contract.
33 To cancel this transaction, mail or deliver a written
34 notice of cancellation or send a telegram to (name of seller)
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1 at the following address (address of seller)."
2 (c) Pursuant to subsection (b), the seller is required
3 to furnish the consumer with the seller's name, and the name
4 of the person to whom any notice of cancellation is to be
5 given if different from the seller's name, the legal name of
6 the company for whom the seller is soliciting, the seller's
7 street address, and the seller's phone number. The seller is
8 also required to furnish the consumer with the date of the
9 telephone solicitation and a description of the telephone
10 solicitation.
11 (d) A seller or telemarketer may not misrepresent any of
12 the requirements of subsection (a), (b), or (c).
13 (e) A seller or telemarketer may not engage in any other
14 unfair or deceptive conduct which will create a likelihood of
15 confusion or misunderstanding to any reasonable consumer.
16 (f) A seller or telemarketer may not:
17 (1) advertise or represent that registration as a
18 telemarketer is equal to an endorsement or approval by
19 any governmental unit or governmental agency of this
20 State;
21 (2) assist, support, or provide substantial
22 assistance to any telemarketer when the seller knew or
23 should have known that the telemarketer was engaged in
24 any act or practice in violation of this subsection (f)
25 or subsection (a), (b), (c), (d), or (e);
26 (3) request a fee in advance to remove derogatory
27 information from or improve a person's credit history or
28 credit record;
29 (4) request or receive payment in advance from a
30 person, to recover or otherwise aid in the return of
31 money or any other item lost by the consumer in a prior
32 telemarketing transaction;
33 (5) obtain or submit for payment a check, draft, or
34 other form of negotiable paper drawn on a person's
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1 checking, savings or bond or other account without the
2 consumer's express written authorization; or
3 (6) procure the services of any professional
4 delivery, courier, or other pick-up service to obtain
5 immediate receipt or possession of a consumer's payment,
6 unless the goods are delivered with the opportunity to
7 inspect before any payment is collected.
8 (g) A seller or telemarketer may not:
9 (1) threaten, intimidate, or use profane or obscene
10 language;
11 (2) cause the telephone to ring more than 5 times
12 in an intended telemarketing call;
13 (3) engage any person repeatedly or continuously
14 with behavior a reasonable person would deem to be
15 annoying, abusive, or harassing;
16 (4) initiate a telemarketing call to a person, when
17 that person has stated previously that he or she does not
18 wish to receive solicitation calls from that seller;
19 (5) engage in telemarketing to a person's residence
20 at any time other than between 8:00 a.m. and 9:00 p.m.
21 local time, at the called person's location;
22 (6) engage in any other conduct which would be
23 considered abusive to any reasonable consumer; or
24 (7) withhold or block, in any telemarketing call,
25 the display or disclosure of the caller's telephone
26 number to an individual receiving the call who uses a
27 caller identification device or any other method made
28 available to the individual by a telephone company for
29 obtaining the caller's telephone number.
30 (h) A violation of this Section is a Class A
31 misdemeanor.
32 (i) The sale of any goods or services by an unregistered
33 telemarketer or seller is voidable by the consumer.
34 (j) Any consumer who suffers a loss or harm as a result
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1 of a violation of this Section shall recover actual and
2 punitive damages, attorney's fees, court costs, injunctive or
3 declaratory relief if appropriate, and any other remedies
4 provided by law.
5 (k) The State, on behalf of its residents who have
6 suffered a loss or harm as a result of a violation of this
7 Act, may seek actual and punitive damages, attorney's fees,
8 court costs, and injunctive or declaratory relief if
9 appropriate.
10 Section 900. The Code of Civil Procedure is amended by
11 changing Section 2-209 as follows:
12 (735 ILCS 5/2-209) (from Ch. 110, par. 2-209)
13 Sec. 2-209. Act submitting to jurisdiction - Process.
14 (a) Any person, whether or not a citizen or resident of
15 this State, who in person or through an agent does any of the
16 acts hereinafter enumerated, thereby submits such person,
17 and, if an individual, his or her personal representative, to
18 the jurisdiction of the courts of this State as to any cause
19 of action arising from the doing of any of such acts:
20 (1) The transaction of any business within this
21 State;
22 (2) The commission of a tortious act within this
23 State;
24 (3) The ownership, use, or possession of any real
25 estate situated in this State;
26 (4) Contracting to insure any person, property or
27 risk located within this State at the time of
28 contracting;
29 (5) With respect to actions of dissolution of
30 marriage, declaration of invalidity of marriage and legal
31 separation, the maintenance in this State of a
32 matrimonial domicile at the time this cause of action
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1 arose or the commission in this State of any act giving
2 rise to the cause of action;
3 (6) With respect to actions brought under the
4 Illinois Parentage Act of 1984, as now or hereafter
5 amended, the performance of an act of sexual intercourse
6 within this State during the possible period of
7 conception;
8 (7) The making or performance of any contract or
9 promise substantially connected with this State;
10 (8) The performance of sexual intercourse within
11 this State which is claimed to have resulted in the
12 conception of a child who resides in this State;
13 (9) The failure to support a child, spouse or
14 former spouse who has continued to reside in this State
15 since the person either formerly resided with them in
16 this State or directed them to reside in this State;
17 (10) The acquisition of ownership, possession or
18 control of any asset or thing of value present within
19 this State when ownership, possession or control was
20 acquired;
21 (11) The breach of any fiduciary duty within this
22 State;
23 (12) The performance of duties as a director or
24 officer of a corporation organized under the laws of this
25 State or having its principal place of business within
26 this State;
27 (13) The ownership of an interest in any trust
28 administered within this State; or
29 (14) The exercise of powers granted under the
30 authority of this State as a fiduciary; or.
31 (15) As a seller or telemarketer, making a
32 telephone call to any person in this State or providing
33 or offering to provide goods or services to any person in
34 this State by means of telemarketing. As used in this
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1 subdivision (15), "seller", "telemarketer", "goods or
2 services", and "telemarketing" have the meanings ascribed
3 to those terms in the Telemarketing Registration and
4 Fraud Prevention Act.
5 (b) A court may exercise jurisdiction in any action
6 arising within or without this State against any person who:
7 (1) Is a natural person present within this State
8 when served;
9 (2) Is a natural person domiciled or resident
10 within this State when the cause of action arose, the
11 action was commenced, or process was served;
12 (3) Is a corporation organized under the laws of
13 this State; or
14 (4) Is a natural person or corporation doing
15 business within this State.
16 (c) A court may also exercise jurisdiction on any other
17 basis now or hereafter permitted by the Illinois Constitution
18 and the Constitution of the United States.
19 (d) Service of process upon any person who is subject to
20 the jurisdiction of the courts of this State, as provided in
21 this Section, may be made by personally serving the summons
22 upon the defendant outside this State, as provided in this
23 Act, with the same force and effect as though summons had
24 been personally served within this State.
25 (e) Service of process upon any person who resides or
26 whose business address is outside the United States and who
27 is subject to the jurisdiction of the courts of this State,
28 as provided in this Section, in any action based upon product
29 liability may be made by serving a copy of the summons with a
30 copy of the complaint attached upon the Secretary of State.
31 The summons shall be accompanied by a $5 fee payable to the
32 Secretary of State. The plaintiff shall forthwith mail a
33 copy of the summons, upon which the date of service upon the
34 Secretary is clearly shown, together with a copy of the
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1 complaint to the defendant at his or her last known place of
2 residence or business address. Plaintiff shall file with the
3 circuit clerk an affidavit of the plaintiff or his or her
4 attorney stating the last known place of residence or the
5 last known business address of the defendant and a
6 certificate of mailing a copy of the summons and complaint to
7 the defendant at such address as required by this subsection
8 (e). The certificate of mailing shall be prima facie
9 evidence that the plaintiff or his or her attorney mailed a
10 copy of the summons and complaint to the defendant as
11 required. Service of the summons shall be deemed to have been
12 made upon the defendant on the date it is served upon the
13 Secretary and shall have the same force and effect as though
14 summons had been personally served upon the defendant within
15 this State.
16 (f) Only causes of action arising from acts enumerated
17 herein may be asserted against a defendant in an action in
18 which jurisdiction over him or her is based upon subsection
19 (a).
20 (g) Nothing herein contained limits or affects the right
21 to serve any process in any other manner now or hereafter
22 provided by law.
23 (Source: P.A. 86-840.)
24 (815 ILCS 413/Act rep.)
25 Section 905. The Telephone Solicitations Act is
26 repealed.
27 Section 910. The Consumer Fraud and Deceptive Business
28 Practices Act is amended by changing Section 2Z as follows:
29 (815 ILCS 505/2Z) (from Ch. 121 1/2, par. 262Z)
30 Sec. 2Z. Violations of other Acts. Any person who
31 knowingly violates the Automotive Repair Act, the Dance
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1 Studio Act, the Physical Fitness Services Act, the Hearing
2 Instrument Consumer Protection Act, the Illinois Union Label
3 Act, the Job Referral and Job Listing Services Consumer
4 Protection Act, the Travel Promotion Consumer Protection Act,
5 the Credit Services Organizations Act, the Automatic
6 Telephone Dialers Act, the Pay-Per-Call Services Consumer
7 Protection Act, the Telephone Solicitations Act, the Illinois
8 Funeral or Burial Funds Act, the Cemetery Care Act, or the
9 Pre-Need Cemetery Sales Act commits an unlawful practice
10 within the meaning of this Act.
11 (Source: P.A. 89-72, eff. 12-31-95; 89-615, eff. 8-9-96;
12 90-426, eff. 1-1-98.)
13 Section 999. Effective Date. This Act takes effect
14 January 1, 1999.