| 1 | A bill to be entitled |
| 2 | An act relating to debt settlement; creating the "Debt |
| 3 | Settlement Services Act"; defining terms; providing |
| 4 | exceptions to the application of the act; requiring that a |
| 5 | person be licensed if he or she intends to provide or |
| 6 | offers to provide debt settlement services to a client who |
| 7 | resides in this state; requiring that the Office of |
| 8 | Financial Regulation maintain and publicize on its website |
| 9 | certain information; providing for an application form and |
| 10 | requiring a fee and proof of an insurance policy or a |
| 11 | surety bond; detailing the information that must be in a |
| 12 | completed application; requiring that an applicant sign |
| 13 | the completed application form acknowledging the accuracy |
| 14 | and truth of each answer and statement made in the |
| 15 | application; requiring an applicant for licensure or a |
| 16 | licensed debt settlement advisor to notify the office of |
| 17 | any change within a prescribed time; requiring that the |
| 18 | office make available to the public the information |
| 19 | contained in an initial application and a renewal |
| 20 | application for a debt settlement advisor license; |
| 21 | providing procedures for the acceptance and rejection of |
| 22 | an initial application for a debt settlement advisor |
| 23 | license; setting forth the grounds by which the office may |
| 24 | reject an application; authorizing an appeal under ch. |
| 25 | 120, F.S., if the applicant is denied a license or if the |
| 26 | office does not act on the initial application within a |
| 27 | prescribed time; detailing the procedures to follow to |
| 28 | renew a license for a debt settlement advisor; authorizing |
| 29 | a debt settlement advisor who is renewing his or her |
| 30 | license, or who is appealing a denial of a license |
| 31 | renewal, to provide debt settlement services under certain |
| 32 | circumstances; requiring the office to consider documents |
| 33 | from other states as an application to become a debt |
| 34 | settlement advisor in this state; requiring each debt |
| 35 | settlement advisor to act in good faith; requiring each |
| 36 | licensed debt settlement advisor to maintain a toll-free |
| 37 | telephone service, staffed at a level that reasonably |
| 38 | permits a client to speak to a customer service |
| 39 | representative; requiring the debt settlement advisor to |
| 40 | provide certain documents to a prospective client before |
| 41 | signing a debt settlement services agreement; providing |
| 42 | that a debt settlement advisor may communicate by |
| 43 | electronic means in compliance with federal law; setting |
| 44 | forth the elements of a debt settlement services |
| 45 | agreement; authorizing a client to cancel the debt |
| 46 | settlement services agreement within a specified time; |
| 47 | providing the cancellation form; requiring the disclosures |
| 48 | and documents in a debt settlement services agreement to |
| 49 | be in English unless the office provides otherwise; |
| 50 | requiring a debt settlement advisor to furnish a |
| 51 | translation of the documents in the primary language of |
| 52 | the client under specified circumstances; detailing the |
| 53 | fees and other charges the debt settlement advisor may |
| 54 | impose; prohibiting a debt settlement advisor from |
| 55 | soliciting contributions from or on behalf of a client; |
| 56 | specifying agreements that are voidable; authorizing a |
| 57 | debt settlement advisor to terminate the debt settlement |
| 58 | services agreement if the client does not pay for debt |
| 59 | settlement services within a specified time; requiring the |
| 60 | debt settlement advisor to prepare periodic reports; |
| 61 | prohibiting a debt settlement advisor from engaging in |
| 62 | certain acts and practices; requiring that advertisements |
| 63 | for debt settlement services be honest and free of certain |
| 64 | conflicts; requiring each debt settlement advisor to |
| 65 | establish an internal formal complaint process for the |
| 66 | advisor to receive, review, and address or resolve formal |
| 67 | complaints; requiring a debt settlement advisor to keep a |
| 68 | file of all formal complaints and to disclose it to the |
| 69 | office upon request; describing the powers of the Office |
| 70 | of Financial Regulation; authorizing the office to adopt |
| 71 | rules; providing for administrative remedies for |
| 72 | violations of the act; authorizing the office to levy a |
| 73 | civil penalty; authorizing the office to suspend, revoke, |
| 74 | or deny renewal of a license to a debt settlement advisor |
| 75 | under certain circumstances; authorizing an advisor to |
| 76 | appeal a suspension or revocation of a license under ch. |
| 77 | 120, F.S.; providing for private enforcement of the act; |
| 78 | providing for an award of attorney's fees; providing that |
| 79 | a violation of the act is a deceptive and unfair trade |
| 80 | practice; providing that this act is supplemental to and |
| 81 | does not preempt other consumer protection laws; providing |
| 82 | time limitations for commencing a civil proceeding; |
| 83 | providing for the act's relation to the Electronic |
| 84 | Signatures in Global and National Commerce Act; providing |
| 85 | for severability; providing an effective date. |
| 86 |
|
| 87 | Be It Enacted by the Legislature of the State of Florida: |
| 88 |
|
| 89 | Section 1. Short title.--This act may be cited as the |
| 90 | "Debt Settlement Services Act." |
| 91 | Section 2. Definitions.--As used in this act, the term: |
| 92 | (1) "Affiliate" means: |
| 93 | (a) A person who directly controls, is controlled by, or |
| 94 | is under common control with the licensee; |
| 95 | (b) An officer of, or a client performing similar |
| 96 | functions with respect to, the licensee; |
| 97 | (c) A director of, or a client performing similar |
| 98 | functions with respect to, the licensee; or |
| 99 | (d) An officer or director of, or a client performing |
| 100 | similar functions with respect to, a person described in |
| 101 | paragraph (a). |
| 102 | (2) "Agreement" means the agreement between a debt |
| 103 | settlement advisor and a client for the performance of debt |
| 104 | settlement services. |
| 105 | (3) "Bank" means a financial institution, including a |
| 106 | commercial bank, savings bank, savings and loan association, |
| 107 | credit union, mortgage bank, and trust company, which is engaged |
| 108 | in the business of banking, chartered under federal or state |
| 109 | law, and regulated by a federal or state banking regulatory |
| 110 | authority. |
| 111 | (4) "Client" means a person who has entered into an |
| 112 | agreement with a debt settlement advisor for debt settlement |
| 113 | services. |
| 114 | (5) "Concession" means consent to repay a debt on terms |
| 115 | more favorable to a client than the terms of the original |
| 116 | contract between a client and a creditor. |
| 117 | (6) "Debt settlement advisor" means a person licensed |
| 118 | under this act to provide debt settlement services to a client. |
| 119 | The term includes an employee or agent of the debt settlement |
| 120 | advisor. |
| 121 | (7) "Debt settlement services" means services provided by |
| 122 | a debt settlement advisor who acts as an intermediary between a |
| 123 | client and one or more unsecured creditors of the client for the |
| 124 | purpose of obtaining favorable concessions for the client. A |
| 125 | debt settlement advisor does not receive money from the client |
| 126 | with the intent to distribute money to the client's creditors. |
| 127 | The term does not include: |
| 128 | (a) Legal services provided by an attorney licensed to |
| 129 | practice law in this state; |
| 130 | (b) Accounting services provided by a certified public |
| 131 | accountant licensed to provide accounting services in this |
| 132 | state; or |
| 133 | (c) Financial planning services provided by a member of a |
| 134 | financial planning profession. |
| 135 | (8) "Federal act" means the federal Electronic Signatures |
| 136 | in Global and National Commerce Act, 15 U.S.C. ss. 7001 et seq., |
| 137 | as amended. |
| 138 | (9) "Good faith" means honesty in fact and the observance |
| 139 | of reasonable standards of fair dealing. |
| 140 | (10) "Insolvent" means: |
| 141 | (a) Having generally ceased to pay debts in the ordinary |
| 142 | course of business other than as a result of a good faith |
| 143 | dispute; |
| 144 | (b) Being unable to pay debts as they become due; or |
| 145 | (c) Being insolvent within the meaning of the federal |
| 146 | bankruptcy law, 11 U.S.C. ss. 101 et seq., as amended. |
| 147 | (11) "Office" means the Office of Financial Regulation of |
| 148 | the Financial Services Commission. |
| 149 | (12) "Principal amount of the debt" means the amount of |
| 150 | debt possessed by the client at the time he or she executes a |
| 151 | debt settlement services agreement with a debt settlement |
| 152 | advisor and before concessions are made by the client's |
| 153 | creditors. |
| 154 | (13) "Program" or "debt settlement program" means a |
| 155 | process whereby a debt settlement advisor furnishes a crafted |
| 156 | debt settlement plan to a client and negotiates on behalf of the |
| 157 | client, and after an agreement, the client makes payments |
| 158 | directly to his or her creditors. |
| 159 | (14) "Record" means information that is inscribed on a |
| 160 | tangible medium such as paper or that is stored in an electronic |
| 161 | format or other medium and is retrievable in perceivable form. |
| 162 | Section 3. Exemptions.--This act does not apply to: |
| 163 | (1) A debt settlement advisor who receives no compensation |
| 164 | for providing debt settlement services to a client. |
| 165 | (2) A judicial officer, a person acting under an order of |
| 166 | a court or an administrative agency, or an assignee for the |
| 167 | benefit of creditors. |
| 168 | (3) A bank. |
| 169 | (4) A title insurer, escrow company, or other entity that |
| 170 | provides bill-paying services if the debt settlement services |
| 171 | are incidental to the bill-paying services. |
| 172 | Section 4. Licensure required; publication of licenses.-- |
| 173 | (1) A person must be licensed under this act if he or she |
| 174 | intends to provide or offers to provide debt settlement services |
| 175 | to a client who resides in this state. |
| 176 | (2) The office shall maintain and publicize on its website |
| 177 | the names and addresses of all persons licensed to provide debt |
| 178 | settlement services in this state. |
| 179 | Section 5. License application form, fee, and accompanying |
| 180 | documents.-- |
| 181 | (1) The application for a license to provide debt |
| 182 | settlement services must be on a form prepared and distributed |
| 183 | by the office. |
| 184 | (2) An applicant for a debt settlement advisor license |
| 185 | must file with the office the application form, a fee |
| 186 | established by the office, which may not exceed $350, and proof |
| 187 | that: |
| 188 | (a) The applicant is covered by a minimum insurance policy |
| 189 | in an amount specified by the office; or |
| 190 | (b) In lieu of an aggregate umbrella insurance policy, the |
| 191 | applicant has filed a surety bond with the office, in a form |
| 192 | approved by the office, for a term not less than the expiration |
| 193 | date of the license. The bond must be in an amount of at least |
| 194 | $10,000. However, the office may demand that an applicant file a |
| 195 | bond of a larger amount if the office determines that the |
| 196 | financial condition and business experience of the debt |
| 197 | settlement advisor, the history of the debt settlement advisor |
| 198 | in performing debt settlement services, and the risk to clients |
| 199 | justify a larger surety bond. The office may not require a |
| 200 | surety bond greater than $50,000. The surety bond must be to the |
| 201 | office and in favor of any clients in this state who suffer loss |
| 202 | arising out of debt settlement services from a debt settlement |
| 203 | advisor. |
| 204 | Section 6. Application for licensure; required |
| 205 | information.-- |
| 206 | (1) A completed application form must include: |
| 207 | (a) The applicant's name, principal business address and |
| 208 | telephone number, and every e-mail address and Internet website |
| 209 | address used by the applicant. |
| 210 | (b) The name under which the applicant will conduct |
| 211 | business. |
| 212 | (c) The address of each location in this state, other than |
| 213 | the applicant's principal business address, at which the |
| 214 | applicant will provide debt settlement services, or a statement |
| 215 | that the applicant will provide debt settlement services only at |
| 216 | the principal business address. |
| 217 | (d) If the applicant is a business entity, the name and |
| 218 | home address of each officer and director of the applicant and |
| 219 | of each person who owns a 10 percent or greater interest in the |
| 220 | applicant. |
| 221 | (e) A statement describing, to the extent it is known or |
| 222 | should be known by the applicant, any civil or criminal |
| 223 | judgments related to financial fraud or misuse, and any |
| 224 | administrative or enforcement actions relating to financial |
| 225 | fraud or misuse, by a governmental agency in any jurisdiction |
| 226 | against the applicant or an officer, director, owner, employee, |
| 227 | or agent of the applicant's business. |
| 228 | (f) A copy of each debt settlement services agreement form |
| 229 | that the applicant will use in providing services to clients. |
| 230 | (g) The schedule of fees and charges that the applicant |
| 231 | intends to use in charging a client for debt settlement services |
| 232 | rendered. |
| 233 | (h) A copy of the financial analysis or budget form that |
| 234 | the applicant intends to use when reviewing a client's financial |
| 235 | condition. |
| 236 | (i) A description of any ownership interest of 10 percent |
| 237 | or greater by a director, owner, or employee of the applicant |
| 238 | in: |
| 239 | 1. Any affiliate of the applicant; or |
| 240 | 2. Any entity that provides products or services to the |
| 241 | applicant or any client related to the applicant's debt |
| 242 | settlement services. |
| 243 | (j) The identity of each director who is an affiliate of |
| 244 | the applicant. |
| 245 | (k) Evidence that the applicant has a registered agent in |
| 246 | this state of record with the Department of State. |
| 247 | (l) Any other information that the office reasonably |
| 248 | requires to perform the duties of the office under section 9. |
| 249 | (2) The application form must contain a statement |
| 250 | informing the applicant that a false or dishonest answer to any |
| 251 | question in the application may be grounds for denial or |
| 252 | subsequent suspension or revocation of the applicant's license. |
| 253 | A completed application form must be signed by the applicant |
| 254 | acknowledging the accuracy and truth of each answer and |
| 255 | statement made in the application. |
| 256 | Section 7. Application for licensure; obligation to update |
| 257 | information.--An applicant or licensed debt settlement advisor |
| 258 | shall notify the office whenever there is a change of the |
| 259 | information specified in section 5 or section 6 no later than 30 |
| 260 | days after the change. |
| 261 | Section 8. Application for licensure; public |
| 262 | information.--The office shall make the information contained in |
| 263 | an initial application for a debt settlement advisor license and |
| 264 | in a renewal application for a debt settlement advisor license |
| 265 | available to the public. |
| 266 | Section 9. Licensure; issuance or denial.-- |
| 267 | (1) The office shall approve or deny an initial |
| 268 | application for a debt settlement advisor license within 60 days |
| 269 | after the applicant files the completed application with the |
| 270 | office. If the office requests additional information from the |
| 271 | applicant, it may extend the 60-day period for no more than 45 |
| 272 | additional days. If the office denies the application, it must |
| 273 | inform the applicant in writing of the reasons for the denial. |
| 274 | (2) The office shall issue an initial license to a debt |
| 275 | settlement advisor who complies with sections 5 and 6. A license |
| 276 | is valid for 1 year after the date the license is granted. |
| 277 | (3) The office may deny an application for an initial debt |
| 278 | settlement advisor license if: |
| 279 | (a) The application contains information that is |
| 280 | materially erroneous or incomplete; |
| 281 | (b) An officer, director, or owner of the applicant's |
| 282 | business has been convicted of a crime or has had a civil |
| 283 | judgment entered against him or her involving dishonesty or the |
| 284 | violation of state or federal securities laws; |
| 285 | (c) The application is not accompanied by the fee |
| 286 | established by the office; or |
| 287 | (d) There is reasonable evidence that the applicant will |
| 288 | not operate as a debt settlement advisor in a lawful, honest, |
| 289 | and fair manner. |
| 290 | (4) If the office denies the application or does not act |
| 291 | on the application within the prescribed time, the applicant may |
| 292 | appeal and request a hearing pursuant to chapter 120, Florida |
| 293 | Statutes. |
| 294 | Section 10. License renewal.-- |
| 295 | (1) A debt settlement advisor must annually renew his or |
| 296 | her license to provide debt settlement services. |
| 297 | (2) An application to renew a license as a debt settlement |
| 298 | advisor must be in a form prepared and distributed by the office |
| 299 | and: |
| 300 | (a) Be filed at least 30 days, but no more than 60 days, |
| 301 | before the current license expires; |
| 302 | (b) Be accompanied by the fee established by the office, |
| 303 | which may not exceed the cost of processing the renewal; |
| 304 | (c) Disclose any changes in the information contained in |
| 305 | the applicant's initial application for a license or in its |
| 306 | immediately previous application for a renewal of the license, |
| 307 | as appropriate; and |
| 308 | (d) Provide any other information that the office |
| 309 | reasonably requires to perform its duties under this section. |
| 310 | (3) If a debt settlement advisor files a timely and |
| 311 | complete application for renewal of a license, the debt |
| 312 | settlement services license remains in effect until the office |
| 313 | notifies the applicant, in writing, whether the application was |
| 314 | approved or denied. If the office denies the renewal |
| 315 | application, the written notice to the debt settlement advisor |
| 316 | must describe the reasons for the denial. |
| 317 | (4) If the office denies an application to renew a debt |
| 318 | settlement license, the debt settlement advisor may appeal the |
| 319 | denial and request a hearing pursuant to chapter 120, Florida |
| 320 | Statutes, within 30 days after receiving the notice of the |
| 321 | denial. |
| 322 | (5) If an appeal proceeding is commenced, the debt |
| 323 | settlement advisor may continue to provide debt settlement |
| 324 | services to a client with whom the advisor has an agreement. If |
| 325 | the denial of the renewal license is affirmed, the debt |
| 326 | settlement advisor shall discontinue providing debt settlement |
| 327 | services to clients and transfer the clients' agreements to |
| 328 | other licensed debt settlement advisors. |
| 329 | Section 11. Licensure in another state.--If a debt |
| 330 | settlement advisor holds a license or certificate of licensure |
| 331 | in another state authorizing him or her to provide debt |
| 332 | settlement services in that state, the debt settlement advisor |
| 333 | may submit a copy of that license or certificate and the |
| 334 | application used to file for a license in another state to the |
| 335 | office. The office shall accept the application and the license |
| 336 | or certificate from the other state as an application for a debt |
| 337 | settlement advisor license or for a renewal of a debt settlement |
| 338 | license, as appropriate, in this state if: |
| 339 | (1) The application from the other state requests |
| 340 | information from the advisor which is substantially similar to |
| 341 | or more comprehensive than that requested in the application |
| 342 | submitted in this state; |
| 343 | (2) The applicant provides the information required by |
| 344 | sections 5 and 6; and |
| 345 | (3) The applicant, under penalty of false statement, |
| 346 | certifies that the information contained in the application is |
| 347 | current or, to the extent it is not current, supplements the |
| 348 | application to make the information current. |
| 349 | Section 12. Requirement of good faith.--A debt settlement |
| 350 | advisor shall act in good faith in all matters under this act. |
| 351 | Section 13. Customer service.--Each licensed debt |
| 352 | settlement advisor shall maintain a toll-free telephone service, |
| 353 | staffed at a level that reasonably permits a client to speak to |
| 354 | a customer service representative during ordinary business |
| 355 | hours. |
| 356 | Section 14. Prerequisites for providing debt settlement |
| 357 | services.-- |
| 358 | (1) Before a licensed debt settlement advisor provides |
| 359 | debt settlement services to a client, he or she must give a |
| 360 | potential client an itemized list of goods and services |
| 361 | available from the debt settlement advisor and the charges for |
| 362 | each service rendered. The list and charges must be clear and |
| 363 | conspicuous. |
| 364 | (2) A debt settlement advisor may not furnish debt |
| 365 | settlement services unless the debt settlement advisor has |
| 366 | prepared a financial analysis for the potential client. |
| 367 | (3) A debt settlement advisor, before signing an agreement |
| 368 | with an individual to become a potential client of the debt |
| 369 | settlement advisor, shall: |
| 370 | (a) Provide the individual with a copy of the financial |
| 371 | analysis and, in writing, a notice that identifies the debt |
| 372 | settlement advisor and acknowledges that the client may keep the |
| 373 | financial analysis even if the individual chooses not to become |
| 374 | a client of the debt settlement advisor; |
| 375 | (b) Inform the individual of the availability, at the |
| 376 | individual's option, of assistance by a toll-free telephone |
| 377 | service or in person to discuss the financial analysis required |
| 378 | in subsection (2); and |
| 379 | (c) Inform the individual that: |
| 380 | 1. Not all debt settlement programs are suitable for all |
| 381 | clients; |
| 382 | 2. Participation in a debt settlement program may |
| 383 | adversely affect a client's credit rating or credit scores; |
| 384 | 3. Nonpayment of debt may lead creditors to increase |
| 385 | finance and other charges or undertake collection activity, |
| 386 | including litigation; |
| 387 | 4. Unless the client is insolvent and a creditor settles |
| 388 | for less than the full amount of the debt, participation in the |
| 389 | program may result in the creation of taxable income to the |
| 390 | client, even though the client does not receive any money; |
| 391 | 5. Specific results cannot be predicted or guaranteed and |
| 392 | the debt settlement advisor cannot force negotiations or |
| 393 | settlements with creditors who do not wish to participate in |
| 394 | negotiations, but will nevertheless advocate on behalf of the |
| 395 | client; |
| 396 | 6. The debt settlement program requires that the client |
| 397 | meet a certain savings goal in order to maximize settlement |
| 398 | results; |
| 399 | 7. The debt settlement advisor does not provide accounting |
| 400 | or legal advice to the client, unless the debt settlement |
| 401 | advisor is licensed to practice law in this state; |
| 402 | 8. The debt settlement advisor is the client's advocate |
| 403 | and does not receive compensation from creditors, banks, or |
| 404 | third-party collection agencies; and |
| 405 | 9. The debt settlement advisor does not make monthly |
| 406 | payments to the client's creditors. |
| 407 | Section 15. Communication by electronic or other means.-- |
| 408 | (1) A debt settlement advisor may satisfy the requirements |
| 409 | of sections 14, 17, and 23 by means of the Internet or other |
| 410 | electronic means if the debt settlement advisor obtains a |
| 411 | consumer's consent in the manner provided by s. 101(c)(1) of the |
| 412 | federal act. |
| 413 | (2) The disclosures and materials required by sections 14, |
| 414 | 17, and 23 shall be presented in a form that can be accurately |
| 415 | reproduced for later reference. |
| 416 | (3) With respect to disclosure by means of an Internet |
| 417 | website, the disclosure of the information required by section |
| 418 | 14 must appear on one or more screens that contain only the |
| 419 | information required, and the client must be able to see the |
| 420 | information on the screens before agreeing to participate in the |
| 421 | program. |
| 422 | (4) At the time of providing the materials and agreement |
| 423 | required in sections 14, 17, and 23, a debt settlement advisor |
| 424 | shall inform the client that upon electronic, telephonic, or |
| 425 | written request, the advisor shall send the client a written |
| 426 | copy of the materials and shall comply with a request as |
| 427 | provided in subsection (7). |
| 428 | (5) If a debt settlement advisor is requested, before the |
| 429 | expiration of 90 days after a program is completed or |
| 430 | terminated, to send a written copy of the materials required by |
| 431 | sections 14, 17, and 23, the debt settlement advisor shall send |
| 432 | them at no charge within 3 business days after receipt of the |
| 433 | request. However, the debt settlement advisor need not comply |
| 434 | with a request more than once per calendar month or if the |
| 435 | advisor reasonably believes that the request is made for |
| 436 | purposes of harassment. If a request is made more than 90 days |
| 437 | after a program is completed or terminated, the debt settlement |
| 438 | advisor shall send within a reasonable time a written copy of |
| 439 | the materials requested. |
| 440 | (6) If a debt settlement advisor maintains an Internet |
| 441 | website, the debt settlement advisor shall disclose on the home |
| 442 | page of the website or on a page that is clearly and |
| 443 | conspicuously connected to the home page by a link that clearly |
| 444 | reveals its contents: |
| 445 | (a) The name or names under which the debt settlement |
| 446 | advisor does business; and |
| 447 | (b) The principal business address, telephone number, and |
| 448 | e-mail address, if any. |
| 449 | (7) If a client who has previously consented to electronic |
| 450 | communication in the manner provided by s. 101(c)(1) of the |
| 451 | federal act withdraws consent as provided in the federal act, a |
| 452 | debt settlement advisor may terminate the agreement with the |
| 453 | client. If the debt settlement advisor wishes to terminate the |
| 454 | agreement, he or she shall notify the client and, unless the |
| 455 | client consents to electronic communication in the manner |
| 456 | provided in s. 101(c)(1) of the federal act within 30 days after |
| 457 | receiving the notification, the agreement is terminated. |
| 458 | Section 16. Form and contents of a debt settlement |
| 459 | agreement.-- |
| 460 | (1) A debt settlement services agreement must be in |
| 461 | writing, dated and signed by the client and the debt settlement |
| 462 | advisor, and delivered to the client immediately upon the |
| 463 | signing of the agreement. The agreement must include: |
| 464 | (a) The name and home address of the client. |
| 465 | (b) The name, business address, and telephone number of |
| 466 | the debt settlement advisor. |
| 467 | (c) The debt settlement services to be provided. |
| 468 | (d) The amount, or method of determining the amount, of |
| 469 | all fees, individually itemized, to be paid by the client. |
| 470 | (e) The process whereby the debt settlement advisor will |
| 471 | comply with his or her obligations under section 23. |
| 472 | (f) The statement that the client may cancel the agreement |
| 473 | as provided in section 17. |
| 474 | (g) The disclosure that the client may contact the office |
| 475 | with any questions or complaints regarding the debt settlement |
| 476 | advisor. |
| 477 | (h) The address, telephone number, and Internet address or |
| 478 | website of the office. |
| 479 | (2) For the purposes of subsection (1), delivery of an |
| 480 | electronic record occurs when it is made available in a format |
| 481 | that the client may retrieve, save, and print, and when the |
| 482 | client is notified that the record is available. |
| 483 | (3) If the office supplies the debt settlement advisor |
| 484 | with any information required under paragraph (1)(h), the debt |
| 485 | settlement advisor may comply with that requirement by |
| 486 | disclosing only the information supplied by the office. |
| 487 | (4) An agreement must state that the client has a right to |
| 488 | terminate the agreement at any time by giving the debt |
| 489 | settlement advisor written or electronic notice, in which event |
| 490 | all powers of attorney granted by the client to the debt |
| 491 | settlement advisor are revoked and void. |
| 492 | (5) An agreement may confer on a debt settlement advisor a |
| 493 | power of attorney to settle a client's debt for no more than 50 |
| 494 | percent of the principal amount of the debt and may confer a |
| 495 | power of attorney to negotiate with creditors of the client on |
| 496 | behalf of the client. The debt settlement advisor must obtain |
| 497 | the consent of the client before accepting a concession |
| 498 | settlement of more than 50 percent of the principal amount of |
| 499 | the debt. |
| 500 | (6) A debt settlement services agreement may not: |
| 501 | (a) Apply to the agreement any law of any jurisdiction |
| 502 | other than the United States and this state; |
| 503 | (b) Except as permitted by the Federal Arbitration Act, 9 |
| 504 | U.S.C. s. 2, as amended, or the Uniform Arbitration Act, contain |
| 505 | any modifications or limitations to otherwise available forums |
| 506 | or procedural rights, including the right to trial by jury, |
| 507 | which are generally available to the client under law and under |
| 508 | this act; |
| 509 | (c) Contain restrictions on a client's remedies under this |
| 510 | act or any other law; or |
| 511 | (d) Contain a provision that: |
| 512 | 1. Limits or releases the liability of any person for not |
| 513 | performing the agreement or for violating this act; or |
| 514 | 2. Indemnifies any person for liability arising under the |
| 515 | agreement or this act. |
| 516 | Section 17. Cancellation of an agreement; waiver.-- |
| 517 | (1) A client may cancel an agreement before midnight of |
| 518 | the 3rd business day after the client executes the agreement. |
| 519 | However, if a debt settlement services agreement does not comply |
| 520 | with subsection (2), section 17, or section 23, the client may |
| 521 | cancel the agreement within 30 days after the client executes |
| 522 | the agreement. To exercise the right of cancellation, the client |
| 523 | must give notice in a record to the debt settlement advisor. |
| 524 | Notice by mail is given when mailed. |
| 525 | (2) An agreement must be accompanied by a form that |
| 526 | contains a notice of right of cancellation heading in bold-faced |
| 527 | type underlined by bold black lines. The notice must be in |
| 528 | substantially the following form: |
| 529 |
|
| 530 | NOTICE OF RIGHT OF CANCELLATION |
| 531 |
|
| 532 | You may cancel this agreement, without any penalty or |
| 533 | obligation, at any time before midnight of the 3rd |
| 534 | business day that begins the day after you agree to it by |
| 535 | electronic communication or by signing it. |
| 536 |
|
| 537 | To cancel this agreement during this period, send an e- |
| 538 | mail to ...(e-mail address of debt settlement advisor)... |
| 539 | or mail or deliver a signed, dated copy of this notice, or |
| 540 | any other written notice to ...(name of debt settlement |
| 541 | advisor)... at ...(address of debt settlement advisor)... |
| 542 | before midnight on ...(date).... |
| 543 |
|
| 544 | If you cancel this agreement within the 3-day period, we |
| 545 | will refund all money you have already paid us. |
| 546 |
|
| 547 | I cancel this agreement. |
| 548 |
|
| 549 | ................ |
| 550 | Print your name |
| 551 | ................ |
| 552 | Signature |
| 553 | ................ |
| 554 | Date |
| 555 |
|
| 556 | Section 18. Required language; rules.--Unless the office |
| 557 | provides otherwise, the disclosures and documents required by |
| 558 | this act must be in English. If a debt settlement advisor |
| 559 | communicates with a client primarily in a language other than |
| 560 | English, the debt settlement advisor must furnish a translation |
| 561 | into the other language of the disclosures and documents |
| 562 | required by this act. |
| 563 | Section 19. Fees and other charges.-- |
| 564 | (1) A debt settlement advisor may not impose, directly or |
| 565 | indirectly, a fee or other charge on a client or receive money |
| 566 | from or on behalf of a client for debt settlement services |
| 567 | except as permitted by this section. |
| 568 | (2) The total aggregate fees charged by a debt settlement |
| 569 | advisor may not exceed 20 percent of the principal amount of the |
| 570 | debt. |
| 571 | (3) A debt settlement advisor may not impose charges or |
| 572 | receive payment for debt settlement services until the debt |
| 573 | settlement advisor and the client have signed a debt settlement |
| 574 | services agreement. |
| 575 | (4) If a client's payment to a debt settlement advisor is |
| 576 | dishonored, a debt settlement advisor may impose a reasonable |
| 577 | charge to the client, not to exceed the amount permitted by law. |
| 578 | Section 20. Voluntary contributions.--A debt settlement |
| 579 | advisor may not solicit a voluntary contribution from a client |
| 580 | or an affiliate of the client for any debt settlement services |
| 581 | provided to the client. |
| 582 | Section 21. Voidable agreements.-- |
| 583 | (1) If a debt settlement advisor imposes a fee or other |
| 584 | charge or receives money or other payments not authorized by |
| 585 | section 19, the client may void the agreement and recover the |
| 586 | fees or charges as provided in section 30. |
| 587 | (2) If a debt settlement advisor is not licensed under |
| 588 | this act at the time a client approves the debt settlement |
| 589 | services agreement, the agreement is voidable by the client. |
| 590 | (3) If a client voids an agreement pursuant to this |
| 591 | section, the debt settlement advisor does not have a claim |
| 592 | against the client for breach of contract or for restitution. |
| 593 | Section 22. Termination of agreements.--If a client fails |
| 594 | to make payments required by the agreement for 60 days, a debt |
| 595 | settlement advisor may terminate the agreement. |
| 596 | Section 23. Periodic reports; retention of records.-- |
| 597 | (1) A debt settlement advisor shall provide the accounting |
| 598 | required by subsection (2), in the following cases: |
| 599 | (a) After each settlement of a debt with a creditor on |
| 600 | behalf of a client. |
| 601 | (b) Within 5 business days after receiving a request by a |
| 602 | client. However, the debt settlement advisor need not comply |
| 603 | with more than one request in any calendar month. |
| 604 | (c) Upon cancellation or termination of an agreement. |
| 605 | (2) If a creditor has agreed to accept as payment in full |
| 606 | an amount less than the principal amount of the debt owed by a |
| 607 | client, a debt settlement advisor shall document, in a record, |
| 608 | an accounting of all of the following: |
| 609 | (a) The amount of the client's debt when the creditor |
| 610 | agrees to a settlement. |
| 611 | (b) The amount of the debt the creditor accepts as |
| 612 | settlement in full of the debt. |
| 613 | (c) Any other terms of the settlement. |
| 614 | (d) For debt settlement advisors using fee agreements that |
| 615 | calculate any portion of the fee based on a percentage of |
| 616 | savings the client realizes from a settled debt, the calculation |
| 617 | of that fee. |
| 618 | (3) A debt settlement advisor shall maintain records for |
| 619 | each client for whom the advisor provides debt settlement |
| 620 | services for 4 years after the date the final payment is made by |
| 621 | the client. The advisor shall produce a copy of the records for |
| 622 | the client within a reasonable time after a request is received. |
| 623 | The debt settlement advisor may use electronic or other means |
| 624 | for storing records. |
| 625 | Section 24. Prohibited acts and practices of debt |
| 626 | settlement advisors.-- |
| 627 | (1) A debt settlement advisor may not engage in any of the |
| 628 | following practices: |
| 629 | (a) Settle a debt on behalf of a client for more than 50 |
| 630 | percent of the amount of the debt owed a creditor, unless the |
| 631 | client explicitly consents to the settlement after the creditor |
| 632 | has agreed to the settlement. |
| 633 | (b) Hold a power of attorney that authorizes a debt |
| 634 | settlement advisor to settle a debt, unless the power of |
| 635 | attorney expressly limits the debt settlement advisor's |
| 636 | authority to settle debts for not more than 50 percent of the |
| 637 | amount of the debt owed a creditor. |
| 638 | (c) Exercise or attempt to exercise a power of attorney |
| 639 | after a client has terminated an agreement. |
| 640 | (d) Initiate a transfer from a client's bank account to |
| 641 | another person unless the transfer is: |
| 642 | 1. A return of money to the client; |
| 643 | 2. Before termination of an agreement, payment of a fee |
| 644 | properly authorized by the agreement and this act; |
| 645 | 3. A payment to a creditor to fund a negotiated settlement |
| 646 | authorized by this act; or |
| 647 | 4. A payment to a creditor to fund a negotiated settlement |
| 648 | of which both the settlement and transfer of money have been |
| 649 | authorized by the client. |
| 650 | (e) Structure a settlement in a manner that would result |
| 651 | in a negative amortization of any of the client's debts. |
| 652 | (f) Settle a debt or lead a client to believe that a |
| 653 | payment to a creditor is in settlement of a debt to the creditor |
| 654 | unless, at the time of settlement, the client receives a |
| 655 | certification or confirmation by the creditor that the payment |
| 656 | is in full settlement of the debt, or is part of a payment plan |
| 657 | that is in full settlement of the debt. |
| 658 | (g) Make a representation that: |
| 659 | 1. The debt settlement advisor will furnish money to pay |
| 660 | bills or prevent attachments; |
| 661 | 2. Payment of a certain amount of money will guarantee |
| 662 | satisfaction of a certain amount or range of indebtedness; |
| 663 | 3. Participation in a program will or may prevent |
| 664 | litigation, garnishment, attachment, repossession, foreclosure, |
| 665 | eviction, or loss of employment; |
| 666 | 4. The debt settlement advisor is authorized or competent |
| 667 | to furnish legal advice or perform legal services, unless such |
| 668 | advice or services are provided by a licensed attorney working |
| 669 | with the debt settlement advisor; or |
| 670 | 5. The debt settlement advisor is a not-for-profit entity, |
| 671 | unless the debt settlement advisor is organized and properly |
| 672 | operating as a not-for-profit entity under the laws of this |
| 673 | state. |
| 674 | (h) Take a confession of judgment or power of attorney to |
| 675 | confess judgment against a client. |
| 676 | (i) Employ deceptive and unfair trade practices, including |
| 677 | the knowing omission of any material information. |
| 678 | (2) If a debt settlement advisor furnishes debt settlement |
| 679 | services to a client, the debt settlement advisor may not, |
| 680 | directly or indirectly, engage in any of the following |
| 681 | practices: |
| 682 | (a) Purchase a debt or obligation of the client. |
| 683 | (b) Receive from or on behalf of the client: |
| 684 | 1. A promissory note or other negotiable instrument other |
| 685 | than a check or a demand draft; or |
| 686 | 2. A postdated check or demand draft. |
| 687 | (c) Lend money or provide credit to the client, except as |
| 688 | a deferral of a fee payment at no additional expense to the |
| 689 | client. |
| 690 | (d) Obtain a mortgage or other security interest from any |
| 691 | person in connection with the services provided to the client. |
| 692 | (e) Except as permitted by federal law, disclose the |
| 693 | identity or identifying information of the client or the |
| 694 | identity of the client's creditors, except to: |
| 695 | 1. The office, upon proper demand; |
| 696 | 2. A creditor of the client, to the extent necessary to |
| 697 | secure the cooperation of the creditor in a debt settlement |
| 698 | program; or |
| 699 | 3. The extent necessary to administer the debt settlement |
| 700 | program. |
| 701 | (f) Except as otherwise provided in section 19, provide |
| 702 | the client less than the full benefit of a compromise of a debt |
| 703 | arranged by the debt settlement advisor. |
| 704 | (g) Furnish legal advice or perform legal services, unless |
| 705 | the person furnishing that advice to or performing those |
| 706 | services for the client is licensed to practice law. |
| 707 | (h) Advise clients to stop payment on any of the accounts |
| 708 | being handled by the debt settlement advisor. |
| 709 | Section 25. Advertising.--A debt settlement advisor that |
| 710 | advertises debt settlement services may not make statements that |
| 711 | are misleading or deceptive, and the advertisements may not |
| 712 | conflict with the information specified in section 14. |
| 713 | Section 26. Internal complaint policy.--Each debt |
| 714 | settlement advisor shall establish a formal internal complaint |
| 715 | policy that creates a process for the debt settlement advisor to |
| 716 | receive, review, and address or resolve formal complaints |
| 717 | internally. The availability of this process shall be |
| 718 | communicated in writing to clients enrolled in the debt |
| 719 | settlement advisor's debt settlement program. This policy must |
| 720 | include a provision that all clients who file a formal complaint |
| 721 | will receive a response from the debt settlement advisor within |
| 722 | a reasonable time following the debt settlement advisor's |
| 723 | receipt of such complaint. The debt settlement advisor shall |
| 724 | maintain a file that documents each formal complaint, the |
| 725 | handling and resolution of each complaint, and the debt |
| 726 | settlement advisor shall disclose the file to the office upon |
| 727 | request. |
| 728 | Section 27. Powers of administration; rules.-- |
| 729 | (1) The office may act on its own initiative or in |
| 730 | response to a complaint. The office may seek voluntary |
| 731 | compliance with this act or initiate enforcement actions as |
| 732 | provided in this act. |
| 733 | (2) The office may investigate and examine, by subpoena or |
| 734 | otherwise, the activities, books, accounts, and records of a |
| 735 | debt settlement advisor or any person to whom a debt settlement |
| 736 | advisor has delegated his or her obligations under an agreement |
| 737 | or this act, in order to determine compliance with this act. |
| 738 | (3) In support of its enforcement powers, the office may: |
| 739 | (a) Charge the debt settlement advisor the reasonable |
| 740 | expenses necessarily incurred to conduct the examination; |
| 741 | (b) Require or permit the debt settlement advisor to file |
| 742 | a statement under oath as to all the facts and circumstances of |
| 743 | the matter to be investigated; |
| 744 | (c) Enter into a cooperative arrangement with any federal |
| 745 | or state agency having authority over debt settlement advisors |
| 746 | and exchange with any of those agencies information about a debt |
| 747 | settlement advisor, including information obtained during an |
| 748 | examination of the debt settlement advisor; or |
| 749 | (d) Establish reasonable fees to be paid by a debt |
| 750 | settlement advisor for the expense of administering this |
| 751 | section. |
| 752 | (4) The office may adopt rules to administer this act. |
| 753 | Section 28. Administrative remedies.-- |
| 754 | (1) The office may enforce this act by: |
| 755 | (a) Ordering a debt settlement advisor, director, officer, |
| 756 | or agent of a debt settlement advisor to cease and desist from |
| 757 | any violations of this act; |
| 758 | (b) Ordering a debt settlement advisor who has violated |
| 759 | this act to correct the violation, including making restitution |
| 760 | to the person aggrieved by the violation; |
| 761 | (c) Imposing on a debt settlement advisor a civil penalty |
| 762 | not to exceed $1,000 for each violation; |
| 763 | (d) Intervening in an action brought under section 30; and |
| 764 | (e) Initiating an enforcement action in the circuit court |
| 765 | to enforce an order or to obtain a restitution, an injunction, |
| 766 | or another equitable relief. |
| 767 | (2) If a person knowingly and willfully violates, or |
| 768 | authorizes, directs, or aids another to violate, a final order |
| 769 | issued under subsection (1), the office may impose an additional |
| 770 | civil penalty not exceeding $1,000 for each violation. |
| 771 | (3) The office may recover reasonable costs of enforcing |
| 772 | this act, including reasonable attorney's fees. |
| 773 | (4) In determining the amount of a civil penalty to be |
| 774 | imposed under subsection (1) or subsection (2), the office shall |
| 775 | consider the seriousness of the violation, the good faith of the |
| 776 | violator, any previous violations by the violator, the |
| 777 | deleterious effect of the violation on the public, the net worth |
| 778 | of the violator, and any other fact relevant to the |
| 779 | determination of the civil penalty. |
| 780 | Section 29. Suspension, revocation, or nonrenewal of |
| 781 | license.-- |
| 782 | (1) The office may suspend, revoke, or deny the renewal of |
| 783 | a debt settlement advisor license if: |
| 784 | (a) A fact or condition exists that, if it had existed |
| 785 | when the debt settlement advisor applied for the debt settlement |
| 786 | advisor license, the fact or condition would have been a reason |
| 787 | for denying the license; |
| 788 | (b) The debt settlement advisor has committed a material |
| 789 | violation of this act or a rule or order of the office under |
| 790 | this act; |
| 791 | (c) The debt settlement advisor is insolvent; |
| 792 | (d) The debt settlement advisor or an affiliate of the |
| 793 | debt settlement advisor has refused to permit the office to make |
| 794 | an examination authorized by this act, failed to comply with |
| 795 | section 28 within 30 days after request, or made a material |
| 796 | misrepresentation or omission in complying with section 28; or |
| 797 | (e) The debt settlement advisor has not responded within a |
| 798 | reasonable time and in an appropriate manner to communications |
| 799 | from the office. |
| 800 | (2) If the office suspends or revokes a debt settlement |
| 801 | advisor's license, the debt settlement advisor may appeal and |
| 802 | request a hearing pursuant to chapter 120, Florida Statutes. |
| 803 | Section 30. Private enforcement.-- |
| 804 | (1) If a client voids an agreement pursuant to section 21, |
| 805 | the client may recover in a civil action all money paid by or on |
| 806 | behalf of the client pursuant to the agreement, in addition to |
| 807 | the recovery of reasonable attorney's fees and costs. |
| 808 | (2) A client with respect to whom a debt settlement |
| 809 | advisor violates this act may recover in a civil action from the |
| 810 | debt settlement advisor and any person that caused the |
| 811 | violation: |
| 812 | (a) Compensatory damages for economic injury caused by the |
| 813 | violation; |
| 814 | (b) Except as otherwise provided in subsection (3), the |
| 815 | greater of the amount recoverable under subsection (1) or |
| 816 | $1,000; and |
| 817 | (c) Reasonable attorney's fees and costs. |
| 818 | (3) In addition to the remedy available under subsection |
| 819 | (2), if a debt settlement advisor violates a client's rights |
| 820 | under section 19, the client may recover in a civil action all |
| 821 | money paid by or on behalf of the client pursuant to the |
| 822 | agreement, except for the amounts paid to the creditors. |
| 823 | (4) A debt settlement advisor is not liable for violating |
| 824 | this act if the debt settlement advisor proves that the |
| 825 | violation was not intentional and resulted from a good faith |
| 826 | error notwithstanding the maintenance of procedures reasonably |
| 827 | adapted to avoid the error. If, in connection with a violation, |
| 828 | the debt settlement advisor has received more money than |
| 829 | authorized by an agreement or this act, the defense provided by |
| 830 | this subsection is not available unless the debt settlement |
| 831 | advisor refunds the excess money within 3 business days after |
| 832 | learning of the violation. |
| 833 | Section 31. Deceptive or unfair trade practices; effect on |
| 834 | other remedies.-- |
| 835 | (1) A violation of this act is a deceptive and unfair |
| 836 | trade practice. |
| 837 | (2) The remedies of this act are in addition to remedies |
| 838 | otherwise available for the same conduct under state law. |
| 839 | (3) This act is supplemental to, and makes no attempt to |
| 840 | preempt, other consumer protection laws that are not |
| 841 | inconsistent with this act. |
| 842 | Section 32. Statute of limitations.-- |
| 843 | (1) Any enforcement action must be commenced within 4 |
| 844 | years after the conduct of the violation occurs. |
| 845 | (2) Any private enforcement action must be commenced |
| 846 | within 2 years after the latest of: |
| 847 | (a) The client's last transmission of money to a debt |
| 848 | settlement advisor; |
| 849 | (b) The date on which the client discovered or reasonably |
| 850 | should have discovered the facts giving rise to the client's |
| 851 | claim; or |
| 852 | (c) Termination of actions or proceedings by the office |
| 853 | with respect to a violation of this act. |
| 854 | (3) Any limitation period prescribed in this section is |
| 855 | tolled during any period in which the debt settlement advisor |
| 856 | has materially and willfully misrepresented information required |
| 857 | to be disclosed to the client or the office by this act. |
| 858 | Section 33. Relation to the Electronic Signatures in |
| 859 | Global and National Commerce Act.--This act modifies, limits, |
| 860 | and supersedes the federal Electronic Signatures in Global and |
| 861 | National Commerce Act, 15 U.S.C. ss. 7001 et seq., but does not |
| 862 | modify, limit, or supersede s. 101(c) of that act , 15 U.S.C. s. |
| 863 | 7001(c), or authorize electronic delivery of any of the notices |
| 864 | described in s. 103(b) of that act, 15 U.S.C. s. 7003(b). |
| 865 | Section 34. If any provision of this act or the |
| 866 | application thereof to any person or circumstance is held |
| 867 | invalid, the invalidity does not affect other provisions or |
| 868 | applications of the act which can be given effect without the |
| 869 | invalid provision or application, and to this end the provisions |
| 870 | of this act are declared severable. |
| 871 | Section 35. This act shall take effect July 1, 2009. |