| 1 | A bill to be entitled |
| 2 | An act relating to debt settlement services; amending s. |
| 3 | 817.801, F.S.; revising terms to exempt debt settlement |
| 4 | services from provisions regulating debt management |
| 5 | services and credit counseling services; creating part V |
| 6 | of ch. 817, F.S.; proving a short title; defining terms; |
| 7 | providing exceptions from provisions regulating debt |
| 8 | settlement services; requiring that debt settlement |
| 9 | providers be licensed by the Office of Financial |
| 10 | Regulation; providing application procedures and |
| 11 | requirements; providing for issuance, expiration, and |
| 12 | renewal of licenses; requiring license fees; authorizing |
| 13 | the office to deny licenses under certain circumstances; |
| 14 | authorizing debt settlement providers to continue |
| 15 | providing services pending an administrative hearing after |
| 16 | denial of a license application; requiring debt settlement |
| 17 | agreements; requiring specified provisions of such |
| 18 | agreements; authorizing a consumer to terminate or void an |
| 19 | agreement under certain circumstances; limiting a |
| 20 | consumer's grant of a power of attorney to a debt |
| 21 | settlement provider; requiring debt settlement providers |
| 22 | to maintain certain records; requiring debt settlement |
| 23 | providers to act in good faith and maintain certain |
| 24 | insurance coverage or surety bond; requiring debt |
| 25 | settlement providers to provide certain information, |
| 26 | disclosures, and assistance to consumers; limiting the |
| 27 | fees that debt settlement providers may charge to |
| 28 | consumers; prohibiting certain acts by debt settlement |
| 29 | providers; requiring debt settlement providers to |
| 30 | establish an internal complaint process and provide |
| 31 | certain information to the office; authorizing consumers |
| 32 | to bring civil actions against debt settlement providers |
| 33 | for certain violations of the act; providing penalties; |
| 34 | limiting a debt settlement provider's liability under |
| 35 | certain circumstances; authorizing the office to enforce |
| 36 | the act and impose certain penalties; limiting time for |
| 37 | bringing civil actions authorized by the act; authorizing |
| 38 | the office to suspend, revoke, or deny the license of a |
| 39 | debt settlement provider under certain circumstances; |
| 40 | providing penalties; authorizing the office to conduct |
| 41 | investigations, administer oaths, and impose charges on |
| 42 | persons subject to investigation; authoring interagency |
| 43 | agreements; requiring the office to adopt rules; providing |
| 44 | for legislative review of the act by a specified date; |
| 45 | providing an effective date. |
| 46 |
|
| 47 | Be It Enacted by the Legislature of the State of Florida: |
| 48 |
|
| 49 | Section 1. Subsections (1), (2), and (4) of section |
| 50 | 817.801, Florida Statutes, are amended to read: |
| 51 | 817.801 Definitions.--As used in this part: |
| 52 | (1) "Credit counseling agency" means any organization |
| 53 | providing debt management services or credit counseling |
| 54 | services. The term does not include a debt settlement provider |
| 55 | as defined in s. 817.903. |
| 56 | (2) "Credit counseling services" means confidential money |
| 57 | management, debt reduction, and financial educational services. |
| 58 | The term does not include a debt settlement provider as defined |
| 59 | in s. 817.903. |
| 60 | (4) "Debt management services" means services provided to |
| 61 | a debtor by a credit counseling organization for a fee to: |
| 62 | (a) Effect the adjustment, compromise, or discharge of any |
| 63 | unsecured account, note, or other indebtedness of the debtor; |
| 64 | and or |
| 65 | (b) Receive from the debtor and disburse to a creditor any |
| 66 | money or other thing of value. |
| 67 |
|
| 68 | The term does not include a debt settlement provider as defined |
| 69 | in s. 817.903. |
| 70 | Section 2. Part V of chapter 817, Florida Statutes, |
| 71 | consisting of sections 817.901, 817.903, 817.905, 817.907, |
| 72 | 817.909, 817.911, 817.913, 817.915, 817.917, 817.919, 817.921, |
| 73 | 817.923, 817.925, and 817.927, is created to read: |
| 74 | PART V |
| 75 | DEBT SETTLEMENT SERVICES |
| 76 | 817.901 Short title.--This part may be cited as the "Debt |
| 77 | Settlement Services Act." |
| 78 | 817.903 Definitions.--As used in this part, the term: |
| 79 | (1) "Concession" means a creditor's consent to accept |
| 80 | repayment of a debt from a consumer on terms more favorable to |
| 81 | the consumer than the original contractual terms between the |
| 82 | creditor and the consumer. |
| 83 | (2) "Debt settlement provider" means a person required to |
| 84 | be licensed under this part who provides, offers to provide, or |
| 85 | agrees to provide debt settlement services. The term does not |
| 86 | include a credit counseling agency as defined in s. 817.801. |
| 87 | (3) "Debt settlement services" means services provided for |
| 88 | a consumer by a debt settlement provider for a fee to obtain a |
| 89 | concession from the consumer's creditor or otherwise effect the |
| 90 | adjustment, compromise, or discharge of any unsecured account, |
| 91 | note, or other indebtedness of the consumer without receiving |
| 92 | from the consumer and disbursing to the creditor any money or |
| 93 | other thing of value. The term does not include debt management |
| 94 | services or credit counseling services as defined in s. 817.801. |
| 95 | (4) "Financial institution" has the same meaning as in s. |
| 96 | 655.005. |
| 97 | (5) "Office" means the Office of Financial Regulation of |
| 98 | the Financial Services Commission. |
| 99 | (6) "Person in control" of a debt settlement provider |
| 100 | means a person who has authority, directly or indirectly, to |
| 101 | affect the management or policies of the provider. The term |
| 102 | includes, but is not limited to, an owner, whether a partnership |
| 103 | or sole proprietorship, a corporate officer, a director, a |
| 104 | resident agent, or a trustee. |
| 105 | (7) "Presettlement debt" means the amount of money or |
| 106 | other thing of value owed by a consumer to a creditor at the |
| 107 | time that the consumer executes a service agreement with a debt |
| 108 | settlement provider. |
| 109 | 817.905 Application of part; exceptions.--This part does |
| 110 | not apply to the following persons or their employees when |
| 111 | engaged in the person's regular course of business: |
| 112 | (1) A person who provides debt settlement services for a |
| 113 | consumer and who does not receive compensation for such services |
| 114 | from the consumer or any of the consumer's creditors. |
| 115 | (2) An attorney licensed or otherwise authorized to |
| 116 | practice law in this state while providing legal services within |
| 117 | the attorney-client relationship described in s. 90.502. |
| 118 | (3) A certified public account licensed under chapter 473 |
| 119 | while providing accounting services within the accountant-client |
| 120 | relationship described in s. 90.5055. |
| 121 | (4) A judicial officer, a person acting under a court |
| 122 | order or order of an administrative agency, or the assignee of a |
| 123 | creditor. |
| 124 | (5) A financial institution or financial institution |
| 125 | holding company, or a subsidiary, agent, or affiliate of a |
| 126 | financial institution or financial institution holding company. |
| 127 | (6) A title insurance agent licensed under s. 626.8417, a |
| 128 | title insurance agency licensed under s. 626.8418, a title |
| 129 | insurer authorized to transact business in this state under s. |
| 130 | 624.401, an escrow agent, or another person who provides bill |
| 131 | paying services if the debt settlement services are incidental |
| 132 | to the bill paying services. |
| 133 | 817.907 Licensure of debt settlement providers; fees; |
| 134 | grounds for denial of license.-- |
| 135 | (1) A person may not provide debt settlement services in |
| 136 | this state unless the person is licensed under this part as a |
| 137 | debt settlement provider. However, an employee or agent of a |
| 138 | licensed debt settlement provider is not required to obtain a |
| 139 | separate license. The office shall maintain and publicize a list |
| 140 | of the licensed debt settlement providers in the state. |
| 141 | (2) A person seeking licensure as a debt settlement |
| 142 | provider must apply to the office in the format prescribed by |
| 143 | the office. An application must include: |
| 144 | (a) The corporate or fictitious name and any other name |
| 145 | under which the debt settlement provider conducts business in |
| 146 | the state. |
| 147 | (b) The street address and telephone number of the debt |
| 148 | settlement provider's principal place of business in the state |
| 149 | and, if applicable, the provider's email address and Internet |
| 150 | website. |
| 151 | (c) The street address of each location at which the debt |
| 152 | settlement provider engages in debt settlement services in the |
| 153 | state. A license is valid only for a location listed in the |
| 154 | license. A debt settlement provider must notify the office in |
| 155 | writing in the format prescribed the office before any change of |
| 156 | a licensed location. |
| 157 | (d) The full name, street address, telephone number, and |
| 158 | social security number or federal employer identification number |
| 159 | of each person who has at least a 10-percent ownership interest |
| 160 | in the debt settlement provider. |
| 161 | (e) A statement as to whether the debt settlement |
| 162 | provider, if incorporated, is a domestic or foreign corporation, |
| 163 | the state and date of incorporation, the charter number of the |
| 164 | corporation, and, if a foreign corporation, the date that the |
| 165 | corporation first registered with the Department of State to |
| 166 | transact business in this state. |
| 167 | (f) The name and address of the debt settlement provider's |
| 168 | registered agent for service of process in the state. |
| 169 | (g) A statement identifying and explaining any material |
| 170 | civil or criminal judgment relating to financial fraud or misuse |
| 171 | and any material administrative or enforcement action relating |
| 172 | to financial fraud or misuse by a governmental agency in any |
| 173 | jurisdiction against the applicant or any of its officers, |
| 174 | directors, owners, or agents. |
| 175 | (h) A copy of each form of service agreement that the |
| 176 | applicant uses for consumers in the state as provided in s. |
| 177 | 817.909. |
| 178 | (i) Evidence that the debt settlement provider has the |
| 179 | insurance coverage or surety bond required under s. 817.911(2) |
| 180 | and that the premiums for the insurance or bond are paid in |
| 181 | full. |
| 182 | (j) The schedule of fees that the applicant charges to |
| 183 | consumers in the state as provided in s. 817.909(2). |
| 184 | (k) A copy or description of the financial analysis that |
| 185 | the debt settlement provider uses to estimate a consumer's |
| 186 | monthly income available for repayment or settlement of the debt |
| 187 | as provided in s. 817.911(4)(a). |
| 188 | (3)(a) The office shall approve or deny a license within |
| 189 | 60 days after an application is submitted. The office shall |
| 190 | issue the license upon determining that the application is |
| 191 | complete and accompanied by the license fee. |
| 192 | (b) A license is valid for 1 year after the date of |
| 193 | issuance and is not assignable or transferable. A debt |
| 194 | settlement provider changing its name, address, registered |
| 195 | agent, insurance coverage, or surety bond at any time other than |
| 196 | renewal of the license must notify the office in writing within |
| 197 | 60 days after the change. |
| 198 | (4) A debt settlement provider may renew a license by |
| 199 | submitting a renewal application to the office on forms |
| 200 | prescribed by the office at least 30 days, but not more than 60 |
| 201 | days, before the license expires. The application must disclose |
| 202 | any changes to the information submitted to the office for the |
| 203 | initial license or most recent renewal of the license. The |
| 204 | office shall renew a license upon determining that the |
| 205 | application is complete and accompanied by the license fee. |
| 206 | (5) An application for an initial license or renewal of a |
| 207 | license must be accompanied by a license fee set by the office |
| 208 | by rule. The fee may not exceed $350 per year and may not exceed |
| 209 | the actual cost of administering this part. If a credit |
| 210 | counseling agency is required to pay a license or registration |
| 211 | fee under part IV of this chapter, the license fee for a debt |
| 212 | settlement provider may not exceed the fee paid by the credit |
| 213 | counseling agency. The office shall deposit funds collected |
| 214 | under this section in the General Inspection Trust Fund to be |
| 215 | used for administration of this part. |
| 216 | (6) The office may deny an application or refuse to renew |
| 217 | the license of a debt settlement provider if the application |
| 218 | contains information that is materially erroneous or incomplete |
| 219 | or if the office determines that the provider or any person in |
| 220 | control of the provider: |
| 221 | (a) Has failed to meet the requirements for initial |
| 222 | licensure as provided in this section. |
| 223 | (b) Has been found guilty or convicted of, or pled guilty |
| 224 | or nolo contendere to, a crime involving fraud, moral turpitude, |
| 225 | dishonest dealing, or any violation of this part. |
| 226 | (c) Has not satisfied any fine or penalty arising out of |
| 227 | an administrative or civil enforcement action brought by any |
| 228 | governmental agency or private person that is based upon conduct |
| 229 | involving fraud, moral turpitude, dishonest dealing, or any |
| 230 | violation of this part. |
| 231 | (d) Has had a judgment entered against the debt settlement |
| 232 | provider, or any person in control of the provider, in any |
| 233 | action brought under the Florida Deceptive and Unfair Trade |
| 234 | Practices Act as provided in part II of chapter 501 or any |
| 235 | action brought under this part. |
| 236 |
|
| 237 | Within 7 days after denying an application or refusing to renew |
| 238 | a license under this subsection, the office shall notify the |
| 239 | debt settlement provider in writing of the reasons for the |
| 240 | denial. Upon submission of an application, a debt settlement |
| 241 | provider may continue to provide debt settlement services while |
| 242 | the application is pending, but must cease to provide such |
| 243 | services if the office denies the application or refuses to |
| 244 | renew the license. |
| 245 | (7) If the debt settlement provider files a timely |
| 246 | petition or request for an administrative hearing under ss. |
| 247 | 120.569 and 120.57 after the office denies an application or |
| 248 | refuses to renew a license, until the office's decision becomes |
| 249 | final agency action, the provider may continue to provide debt |
| 250 | settlement services for a consumer with whom the provider has a |
| 251 | service agreement executed before the office denied the |
| 252 | application or refused to renew the license. |
| 253 | 817.909 Debt settlement agreement.-- |
| 254 | (1) A debt settlement provider may engage in debt |
| 255 | settlement services only pursuant to a service agreement that is |
| 256 | signed and dated by the consumer before the provision of |
| 257 | services. A service agreement must include: |
| 258 | (a) A full and detailed description of the debt settlement |
| 259 | services to be provided and an itemized schedule of the fees to |
| 260 | be paid by the consumer for each service. |
| 261 | (b) The street address of the debt settlement provider's |
| 262 | principal place of business in the state and the name and |
| 263 | address of the provider's registered agent for service of |
| 264 | process in the state. |
| 265 | (c)1. A provision allowing the consumer to cancel the |
| 266 | agreement without penalty or obligation within 3 business days |
| 267 | after the agreement is executed and a statement printed in all |
| 268 | boldface type in immediate proximity to the space provided for |
| 269 | the consumer's signature, in substantially the following form: |
| 270 | |
| 271 | You may cancel this agreement before midnight of the 3rd |
| 272 | business day after the date you sign the agreement. See |
| 273 | the attached Notice of Right to Cancel for details. |
| 274 |
|
| 275 | 2. The agreement must be accompanied by a notice of the |
| 276 | consumer's right to cancel the agreement, printed in at least |
| 277 | 12-point type in substantially the following form: |
| 278 |
|
| 279 | NOTICE OF RIGHT TO CANCEL |
| 280 | |
| 281 | You may cancel this agreement for debt settlement services |
| 282 | without penalty or obligation within 3 business days after |
| 283 | the date you sign the agreement. Your payment must be |
| 284 | returned to you within 10 business days after receipt of |
| 285 | your written notice of cancellation. To cancel, you must |
| 286 | sign, date, and mail or deliver this or any other written |
| 287 | notice to: ...(name of debt settlement provider)... at |
| 288 | ...(address)... by midnight of ...(date).... If you cancel |
| 289 | this agreement within the 3-day period, ...(name of debt |
| 290 | settlement provider)... will refund all money you have |
| 291 | already paid. |
| 292 | I cancel this agreement: |
| 293 |
|
| 294 | Name: ...(printed name of consumer).... |
| 295 | Signature: ...(signature of consumer).... |
| 296 | Date: ...(date).... |
| 297 |
|
| 298 | (d) A provision allowing the consumer to terminate the |
| 299 | agreement at any time by giving the debt settlement provider |
| 300 | written notice, upon which any power of attorney granted by the |
| 301 | consumer to the provider is void. |
| 302 | (2) A debt settlement agreement may include a consumer's |
| 303 | power of attorney to negotiate with the consumer's creditors on |
| 304 | behalf of the consumer and settle the consumer's presettlement |
| 305 | debt for no more than 50 percent of the debt. If a debt |
| 306 | settlement agreement includes this power of attorney, the |
| 307 | agreement must expressly limit the provider's authority to |
| 308 | settle the debt for more than 50 percent of the presettlement |
| 309 | debt unless the consumer agrees in writing to the settlement. |
| 310 | (3) A debt settlement agreement may not provide for |
| 311 | application of the law of any jurisdiction other than this |
| 312 | state, contain a provision that limits or releases a person from |
| 313 | liability for not performing the terms of the service agreement |
| 314 | or committing a violation of this part, restrict a consumer's |
| 315 | remedies under this part, or, notwithstanding s. 682.02, require |
| 316 | the consumer to submit to arbitration. |
| 317 | (4) A debt settlement provider must provide the consumer |
| 318 | with a copy of the service agreement and each other document |
| 319 | signed by the consumer at the time the documents are signed. |
| 320 | (5) A consumer may void a debt settlement agreement if the |
| 321 | debt settlement provider is not licensed as required in s. |
| 322 | 817.907 or charges the consumer a fee for debt settlement |
| 323 | services that is prohibited under s. 817.913. |
| 324 | (6) A debt settlement provider shall maintain records of |
| 325 | the debt settlement services that it provide for a consumer for |
| 326 | at least 4 years after the consumer's final payment. The debt |
| 327 | settlement provider shall give the consumer a copy of the |
| 328 | records within a reasonable time upon the consumer's request. |
| 329 | 817.911 Debt settlement services; requirements; insurance |
| 330 | coverage; surety bond.-- |
| 331 | (1) A debt settlement provider must act in good faith in |
| 332 | all matters under this part. |
| 333 | (2)(a) A debt settlement provider must obtain and maintain |
| 334 | insurance coverage in an amount determined necessary by the |
| 335 | office to protect consumers, which may not exceed the amount of |
| 336 | insurance coverage required for a credit counseling agency under |
| 337 | s. 817.804. |
| 338 | (b) A debt settlement provider, in lieu of maintaining the |
| 339 | insurance coverage required under paragraph (a), may obtain and |
| 340 | maintain a surety bond in an amount of at least $10,000, but not |
| 341 | more than $50,000, as determined necessary by the office based |
| 342 | on the financial condition and business experience of the debt |
| 343 | settlement provider, the provider's history of performing debt |
| 344 | settlement services, and the risk to consumers. The bond must be |
| 345 | filed with the office and be issued in favor of the office for |
| 346 | the use and benefit of any consumer who is injured by a |
| 347 | violation of this part. The aggregate liability of the surety to |
| 348 | all claimants may not exceed the amount of the bond, regardless |
| 349 | of the number or amount of claims. If multiple claims exceed the |
| 350 | amount of the bond and the surety pays the bond's full amount to |
| 351 | the office, the surety has no further liability. The office |
| 352 | shall hold any funds collected from the surety for 6 months |
| 353 | after the date of the first claim and immediately thereafter |
| 354 | shall pay each claimant the pro rata share of the funds based on |
| 355 | the claim's proportion of the aggregate amount of claims. |
| 356 | (3) A debt settlement provider shall maintain a toll-free |
| 357 | telephone number that allows a consumer to speak with a customer |
| 358 | service representative during regular business hours. |
| 359 | (4) Before a consumer executes a debt settlement |
| 360 | agreement, the debt settlement provider must: |
| 361 | (a) Prepare a financial analysis of the consumer's income, |
| 362 | expenses, presettlement debt, and credit history which estimates |
| 363 | the amount of the consumer's monthly income available for |
| 364 | repayment or settlement of the debt. The debt settlement |
| 365 | provider must provide the consumer with a copy of the financial |
| 366 | analysis free of charge, whether or not the consumer executes a |
| 367 | service agreement for debt settlement services. |
| 368 | (b) Inform the consumer of the availability of assistance |
| 369 | through a toll-free telephone number or in person to discuss the |
| 370 | financial analysis required under paragraph (a). |
| 371 | (c) Inform the consumer that not all debt settlement |
| 372 | services are suitable for all consumers; that debt settlement |
| 373 | may adversely affect the consumer's credit rating or credit |
| 374 | scores; that nonpayment of debt may lead creditors to increase |
| 375 | finance or other charges or undertake collection activities, |
| 376 | including litigation; and that debt settlement may result in the |
| 377 | consumer's increased tax liability, whether or not the consumer |
| 378 | receives any money. |
| 379 | (d) Inform the consumer that the debt settlement provider |
| 380 | cannot guarantee specific results or compel a creditor to |
| 381 | negotiate or settle a debt. |
| 382 | (e) Inform the consumer that debt settlement services may |
| 383 | require the consumer to meet certain savings goals in order to |
| 384 | maximize settlement results. |
| 385 | (f) Disclose that the debt settlement provider does not |
| 386 | provide accounting or legal advice to consumers unless the |
| 387 | provider is professionally licensed to provide such advice; that |
| 388 | the provider is the consumer's advocate and does not receive |
| 389 | compensation from creditors, financial institutions, or third- |
| 390 | party collection agencies; and that the provider does not make |
| 391 | payments to the consumer's creditors. |
| 392 | (5) A debt settlement provider that maintains an Internet |
| 393 | website must disclose on the website's main page, or on a page |
| 394 | clearly linked to the main page, the provider's corporate or |
| 395 | fictitious name, any other name under which the provider |
| 396 | conducts business in the state, the street address and telephone |
| 397 | number of the provider's principal place of business in the |
| 398 | state, and the provider's email address. |
| 399 | 817.913 Prohibited fees.-- |
| 400 | (1) A debt settlement provider may not impose, directly or |
| 401 | indirectly, a fee or other charge on a consumer or receive money |
| 402 | from or on behalf of a consumer for debt settlement services, |
| 403 | except as authorized by this section. |
| 404 | (2) A debt settlement provider may not charge or collect |
| 405 | fees from a consumer for debt settlement services until the |
| 406 | consumer executes a service agreement as provided in s. 817.909. |
| 407 | The fees may not exceed 20 percent of the consumer's |
| 408 | presettlement debt. |
| 409 | (3) A debt settlement provider may charge a service fee to |
| 410 | a consumer that does not exceed the service fees authorized |
| 411 | under s. 832.08(5) or 5 percent of the face amount of the check, |
| 412 | draft, or order, whichever is greater, for the collection of a |
| 413 | dishonored check, draft, or other order for the payment of money |
| 414 | to the provider. |
| 415 | 817.915 Prohibited acts.--A debt settlement provider may |
| 416 | not: |
| 417 | (1) Engage in debt settlement services at any location |
| 418 | other than a location licensed under s. 817.907. |
| 419 | (2) Charge or accept from a consumer, directly or |
| 420 | indirectly, any fee or charge prohibited under s. 817.913 or |
| 421 | solicit a voluntary contribution from a consumer for any service |
| 422 | provided for the consumer. |
| 423 | (3) Engage in debt settlement services, or charge or |
| 424 | accept from a consumer, directly or indirectly, any fee or |
| 425 | contribution before the consumer signs a service agreement under |
| 426 | s. 817.909. |
| 427 | (4) Fail to maintain at all times the insurance coverage |
| 428 | or surety bond required under s. 817.911(2). |
| 429 | (5) Settle a debt on behalf of a consumer for more than 50 |
| 430 | percent of the amount of the presettlement debt unless the |
| 431 | consumer agrees in writing to the settlement. |
| 432 | (6) Accept a power of attorney from a consumer that |
| 433 | authorizes the debt settlement provider to settle a debt on |
| 434 | behalf of the consumer unless the power of attorney expressly |
| 435 | limits the provider's authority to settle the debt for no more |
| 436 | than 50 percent of the amount of the presettlement debt unless |
| 437 | the consumer agrees in writing to the settlement. |
| 438 | (7) Use or attempt to use a consumer's power of attorney |
| 439 | after the consumer terminates the service agreement with the |
| 440 | debt settlement provider. |
| 441 | (8) Structure a settlement that results in a negative |
| 442 | amortization schedule for repayment of any of a consumer's |
| 443 | debts. |
| 444 | (9) Settle a debt, or cause a consumer to believe that |
| 445 | payment to a creditor settles a debt, unless the consumer |
| 446 | receives before the settlement or payment a certification or |
| 447 | confirmation from the creditor that the payment fully settles |
| 448 | the debt or is part of a payment plan that, upon completion, |
| 449 | fully settles the debt. |
| 450 | (10) Initiate a transfer from a consumer's account unless |
| 451 | the transfer is for return of money to the consumer, for payment |
| 452 | of a fee authorized by a current debt settlement service |
| 453 | agreement, for payment of a creditor to fund a negotiated |
| 454 | settlement of no more than 50 percent of the presettlement debt, |
| 455 | or for payment of a creditor to fund a negotiated settlement of |
| 456 | more than 50 percent of the presettlement debt if the consumer |
| 457 | agrees to the settlement and the transfer. |
| 458 | (11) Purchase any debt or obligation of a consumer; lend |
| 459 | money or provide credit to a consumer, except as a deferral of a |
| 460 | fee payment at no additional expense to the consumer; obtain a |
| 461 | mortgage or other security interest from any person in |
| 462 | connection with the debt settlement services provided to the |
| 463 | consumer; accept from, or on behalf of, a consumer a promissory |
| 464 | note or other negotiable instrument, other than a check or |
| 465 | demand draft; or accept a postdated check or demand draft. |
| 466 | (12) Provide the consumer with less than the full benefit |
| 467 | of any settlement of a debt negotiated by the debt settlement |
| 468 | provider. |
| 469 | (13) Advise a consumer to stop payment on any debts. |
| 470 | (14) Represent to a consumer that the debt settlement |
| 471 | provider is authorized or competent to provide legal or |
| 472 | accounting advice, or perform legal or accounting services for a |
| 473 | consumer, unless the provider is licensed to provide such advice |
| 474 | or services. |
| 475 | (15) Represent to a consumer that the debt settlement |
| 476 | provider will furnish money to pay a bill or prevent the |
| 477 | attachment of an asset; that partial payment of a certain amount |
| 478 | will guarantee satisfaction of the full amount of a debt; or |
| 479 | that participation in debt settlement services will prevent |
| 480 | litigation, garnishment, attachment, repossession, foreclosure, |
| 481 | eviction, or loss of employment. |
| 482 | (16) Represent that the debt settlement provider is a |
| 483 | corporation not for profit unless it is organized under chapter |
| 484 | 617 or is exempt from federal income taxation and has a |
| 485 | certificate issued by the Internal Revenue Service recognizing |
| 486 | the provider's exemption. |
| 487 | (17) Make or use any false or misleading representation, |
| 488 | omit any material fact in the offer or sale of services, or |
| 489 | engage directly or indirectly in any fraudulent, false, |
| 490 | misleading, unconscionable, unfair, or deceptive act or practice |
| 491 | in connection with the offer or sale of any services of a debt |
| 492 | settlement provider. |
| 493 | (18) Violate any other provision of this part. |
| 494 | 817.917 Complaints; civil remedies.-- |
| 495 | (1) A debt settlement provider shall establish an internal |
| 496 | complaint process that allows the provider to receive, review, |
| 497 | and address or resolve a consumer's complaint internally. The |
| 498 | debt settlement provider shall notify each consumer in writing |
| 499 | of the complaint process. A complaint process must specify a |
| 500 | reasonable period after a consumer submits a complaint for the |
| 501 | debt settlement provider to respond to the complaint. A debt |
| 502 | settlement provider shall maintain records of each consumer |
| 503 | complaint, its processing, and its resolution and shall disclose |
| 504 | the records to the office upon request. |
| 505 | (2)(a) A consumer who is injured by a debt settlement |
| 506 | provider's violation of this part may bring an action in circuit |
| 507 | court against the provider and any person who caused the |
| 508 | violation for compensatory damages for the economic injury |
| 509 | caused by the violation, or $1,000, whichever is greater, and |
| 510 | reasonable attorney's fees and costs. The $1,000 minimum amount |
| 511 | of compensatory damages per consumer does not apply to a class |
| 512 | action. |
| 513 | (b) In addition to the compensatory damages authorized |
| 514 | under paragraph (a), if a debt settlement provider violates a |
| 515 | consumer's rights under s. 817.909, the consumer may recover in |
| 516 | a civil action all money paid by or on behalf of the consumer |
| 517 | under the service agreement, except for amounts paid to |
| 518 | creditors. |
| 519 | (c) In addition to the compensatory damages authorized in |
| 520 | paragraph (a), a consumer who voids a service agreement under s. |
| 521 | 817.909(5) may recover in a civil action all money paid by or on |
| 522 | behalf of the consumer under the agreement. |
| 523 | (d) A debt settlement provider is not liable under this |
| 524 | section for a violation of this part if the provider proves that |
| 525 | the violation is not intentional and resulted from a good faith |
| 526 | error to comply with this part, despite the provider's use of |
| 527 | procedures reasonably adapted to avoid the error. If, in |
| 528 | connection with a violation, the debt settlement provider |
| 529 | receives more money than authorized by the service agreement or |
| 530 | this part, the defense provided in this paragraph is not |
| 531 | available unless the provider refunds the excess moneys within 3 |
| 532 | business days after learning of the violation. |
| 533 | 817.919 Administrative remedies; penalties.-- |
| 534 | (1) The office may enforce this part and rules adopted |
| 535 | under this part by taking one or more of the following actions: |
| 536 | (a) Ordering a debt settlement provider, a person in |
| 537 | control of the provider, or the provider's employee or agent to |
| 538 | cease and desist from any violations. |
| 539 | (b) Ordering a debt settlement provider or a person |
| 540 | causing a violation to correct the violation, including making |
| 541 | restitution of money or property to the person aggrieved by the |
| 542 | violation. |
| 543 | (c) Imposing on a debt settlement provider, or a person |
| 544 | causing a violation, a civil penalty not to exceed $1,000 for |
| 545 | each violation. |
| 546 | (d) Prosecuting a civil action to enforce an order; to |
| 547 | obtain restitution, an injunction or other equitable relief, or |
| 548 | both; or to intervene in an action brought by a consumer under |
| 549 | s. 817.917(2). |
| 550 | (2) If a person violates or knowingly authorizes, directs, |
| 551 | or aids another person to violate a final order issued under |
| 552 | subsection (1), the office may impose an additional civil |
| 553 | penalty not to exceed $1,000 for each violation. |
| 554 | (3) In determining the amount of a civil penalty to impose |
| 555 | under subsection (1) or subsection (2), the office shall |
| 556 | consider the seriousness of the violation, the good faith of the |
| 557 | violator, any previous violations by the violator, the harm or |
| 558 | potential harm of the violation to the public, and the net worth |
| 559 | of the violator. |
| 560 | (4)(a) The office may bring an action to enforce this part |
| 561 | in any county. |
| 562 | (b) The office may recover the reasonable costs of |
| 563 | enforcing this part under this section, including attorney's |
| 564 | fees based on the hours reasonably expended and the hourly rates |
| 565 | for attorneys of comparable experience in the community. |
| 566 | 817.921 Limitations of actions.-- |
| 567 | (1) An action brought under s. 817.917(2) must be |
| 568 | commenced within 2 years after the latest of: |
| 569 | (a) The consumer's final payment of money to the debt |
| 570 | settlement provider. |
| 571 | (b) The date on which the consumer discovered or |
| 572 | reasonably should have discovered the facts giving rise to the |
| 573 | consumer's claim. |
| 574 | (c) Termination of an action or proceeding by the office |
| 575 | for a violation of this part. |
| 576 | (2) An action or proceeding brought under s. 817.919 must |
| 577 | be commenced within 4 years after the conduct that is the basis |
| 578 | of the office's complaint. |
| 579 | 817.923 Disciplinary proceedings; penalties.--The office |
| 580 | may suspend, revoke, or deny the renewal of a debt settlement |
| 581 | provider's license, if: |
| 582 | (1) A fact or condition exists that, if it existed when |
| 583 | the debt settlement provider applied for a license, would be a |
| 584 | reason for denying the license. |
| 585 | (2) The debt settlement provider materially violates this |
| 586 | part or a rule adopted under this part. |
| 587 | (3) The debt settlement provider becomes insolvent. As |
| 588 | used in this subsection, the term "insolvent" means: |
| 589 | (a) Generally ceasing to pay debts in the ordinary course |
| 590 | of business other than due to a good faith dispute. |
| 591 | (b) Being unable to pay debts as they become due. |
| 592 | (c) Being insolvent as defined in the federal Bankruptcy |
| 593 | Code, 11 U.S.C. s. 101, as amended. |
| 594 | (4) The debt settlement provider, or the provider's |
| 595 | employee or agent, refuses to disclose records to the office as |
| 596 | required in s. 817.917(1), fails to comply with s. 817.925(2) |
| 597 | within 30 days after the request, or makes a material |
| 598 | misrepresentation or omission in complying with s. 817.925(2). |
| 599 | (5) The debt settlement provider does not respond within a |
| 600 | reasonable time and in an appropriate manner to communications |
| 601 | from the office. |
| 602 | 817.925 Powers of Office of Financial Regulation; |
| 603 | rulemaking.-- |
| 604 | (1) The Office of Financial Regulation may act on its own |
| 605 | initiative, may act on a consumer complaint received by the |
| 606 | office, may take action to obtain voluntary compliance with this |
| 607 | part, and may seek or impose the administrative and disciplinary |
| 608 | remedies authorized in this part. |
| 609 | (2) The office may investigate and examine, in this state |
| 610 | or any other jurisdiction, the activities, books, accounts, and |
| 611 | records of a person who provides or offers to provide debt |
| 612 | settlement services in the state. In connection with an |
| 613 | investigation, the office may: |
| 614 | (a) Charge the person the reasonable expenses necessarily |
| 615 | incurred to conduct the examination. |
| 616 | (b) Require or permit a person to file a statement under |
| 617 | oath as to all the facts and circumstances of the matter under |
| 618 | investigation. |
| 619 | (3) The office may enter into cooperative arrangements |
| 620 | with any other federal or state agency having authority over |
| 621 | debt settlement providers and may exchange with any such agency |
| 622 | information about a debt settlement provider, including |
| 623 | information obtained during an examination of the provider. |
| 624 | (4) The office shall adopt rules under ss. 120.536(1) and |
| 625 | 120.54 to administer this part. |
| 626 | 817.927 Sunset review.--This part shall be reviewed by the |
| 627 | Legislature before June 30, 2015, but does not expire and is not |
| 628 | repealed if the Legislature does not take action before that |
| 629 | date. |
| 630 | Section 3. This act shall take effect July 1, 2009. |