Florida Senate - 2009 SB 2412
By Senator Bennett
21-01899A-09 20092412__
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
5 that a person be licensed if he or she intends to
6 provide or offers to provide debt settlement services
7 to a client who resides in this state; requiring that
8 the Office of Financial Regulation maintain and
9 publicize on its website certain information;
10 providing for an application form and requiring a fee
11 and proof of an insurance policy or a surety bond;
12 detailing the information that must be in a completed
13 application; requiring that an applicant sign the
14 completed application form acknowledging the accuracy
15 and truth of each answer and statement made in the
16 application; requiring an applicant for licensure or a
17 licensed debt settlement advisor to notify the office
18 of any change within a prescribed time; requiring that
19 the office make available to the public the
20 information contained in an initial application and a
21 renewal application for a debt settlement advisor
22 license; providing procedures for the acceptance and
23 rejection of an initial application for a debt
24 settlement advisor license; setting forth the grounds
25 by which the office may reject an application;
26 authorizing an appeal under ch. 120, F.S., if the
27 applicant is denied a license or if the office does
28 not act on the initial application within a prescribed
29 time; detailing the procedures to follow to renew a
30 license for a debt settlement advisor; authorizing a
31 debt settlement advisor who is renewing his or her
32 license, or who is appealing a denial of a license
33 renewal, to provide debt settlement services under
34 certain circumstances; requiring the office to
35 consider documents from other states as an application
36 to become a debt settlement advisor in this state;
37 requiring each debt settlement advisor to act in good
38 faith; requiring each licensed debt settlement advisor
39 to maintain a toll-free telephone service, staffed at
40 a level that reasonably permits a client to speak to a
41 customer-service representative; requiring the debt
42 settlement advisor to provide certain documents to a
43 prospective client before signing a debt settlement
44 services agreement; providing that a debt settlement
45 advisor may communicate by electronic means in
46 compliance with federal law; setting forth the
47 elements of a debt settlement services agreement;
48 authorizing a client to cancel the debt settlement
49 services agreement within a specified time; providing
50 the cancellation form; requiring the disclosures and
51 documents in a debt settlement services agreement to
52 be in English unless the office provides otherwise;
53 requiring a debt settlement advisor to furnish a
54 translation of the documents in the primary language
55 of the client under specified circumstances; detailing
56 the fees and other charges the debt settlement advisor
57 may impose; prohibiting a debt settlement advisor from
58 soliciting contributions from or on behalf of a
59 client; specifying agreements that are voidable;
60 authorizing a debt settlement advisor to terminate the
61 debt settlement services agreement if the client does
62 not pay for debt settlement services within a
63 specified time; requiring the debt settlement advisor
64 to prepare periodic reports; prohibiting a debt
65 settlement advisor from engaging in certain acts and
66 practices; requiring that advertisements for debt
67 settlement services be honest and free of certain
68 conflicts; requiring each debt settlement advisor to
69 establish an internal formal complaint process for the
70 advisor to receive, review, and address or resolve
71 formal complaints; requiring a debt settlement advisor
72 to keep a file of all formal complaints and to
73 disclose it to the office upon request; describing the
74 powers of the Office of Financial Regulation;
75 authorizing the office to adopt rules; providing for
76 administrative remedies for violations of the act;
77 authorizing the office to levy a civil penalty;
78 authorizing the office to suspend, revoke, or deny
79 renewal of a license to a debt settlement advisor
80 under certain circumstances; authorizing an advisor to
81 appeal a suspension or revocation of a license under
82 ch. 120, F.S.; providing for private enforcement of
83 the act; providing for an award of attorney's fees;
84 providing that a violation of the act is a deceptive
85 and unfair trade practice; providing that this act is
86 supplemental to and does not preempt other consumer
87 protection laws; providing time limitations for
88 commencing a civil proceeding; providing for the act's
89 relation to the Electronic Signatures in Global and
90 National Commerce Act; providing for severability;
91 providing an effective date.
92
93 Be It Enacted by the Legislature of the State of Florida:
94
95 Section 1. Short title.—This act may be cited as the “Debt
96 Settlement Services Act.”
97 Section 2. Definitions.—As used in this act, the term:
98 (1) “Affiliate” means:
99 (a) A person who directly controls, is controlled by, or is
100 under common control with the licensee;
101 (b) An officer of, or a client performing similar functions
102 with respect to, the licensee;
103 (c) A director of, or a client performing similar functions
104 with respect to, the licensee; or
105 (d) An officer or director of, or a client performing
106 similar functions with respect to, a person described in
107 paragraph (a).
108 (2) “Agreement” means the agreement between a debt
109 settlement advisor and a client for the performance of debt
110 settlement services.
111 (3) “Bank” means a financial institution, including a
112 commercial bank, savings bank, savings and loan association,
113 credit union, mortgage bank, and trust company, engaged in the
114 business of banking, chartered under federal or state law, and
115 regulated by a federal or state banking regulatory authority.
116 (4) “Client” means a person who has entered into an
117 agreement with a debt settlement advisor for debt settlement
118 services.
119 (5) “Concession” means consent to repay a debt on terms
120 more favorable to a client than the terms of the original
121 contract between a client and a creditor.
122 (6) “Debt settlement advisor” means a person licensed under
123 this act to provide debt settlement services to a client. The
124 term includes an employee or agent of the debt settlement
125 advisor.
126 (7) “Debt settlement services” means services provided by a
127 debt settlement advisor who acts as an intermediary between a
128 client and one or more unsecured creditors of the client for the
129 purpose of obtaining favorable concessions for the client. A
130 debt settlement advisor does not receive money from the client
131 with the intent to distribute money to the client's creditors.
132 The term does not include:
133 (a) Legal services provided by an attorney licensed to
134 practice law in this state;
135 (b) Accounting services provided by a certified public
136 accountant licensed to provide accounting services in this
137 state; or
138 (c) Financial-planning services provided by a member of a
139 financial-planning profession.
140 (8) “Federal act” means the federal Electronic Signatures
141 in Global and National Commerce Act, 15 U.S.C. s. 7001 et seq.,
142 as amended.
143 (9) “Good faith” means honesty in fact and the observance
144 of reasonable standards of fair dealing.
145 (10) “Insolvent” means:
146 (a) Having generally ceased to pay debts in the ordinary
147 course of business other than as a result of a good-faith
148 dispute;
149 (b) Being unable to pay debts as they become due; or
150 (c) Being insolvent within the meaning of the federal
151 bankruptcy law, 11 U.S.C. s. 101 et seq., as amended.
152 (11) “Office” means the Office of Financial Regulation of
153 the Financial Services Commission.
154 (12) “Principal amount of the debt” means the amount of
155 debt possessed by the client at the time he or she executes a
156 debt settlement services agreement with a debt settlement
157 advisor and before concessions are made by the client’s
158 creditors.
159 (13) “Program” or “debt settlement program” means a process
160 whereby a debt settlement advisor furnishes a crafted debt
161 settlement plan to a client and negotiates on behalf of the
162 client, and after an agreement, the client makes payments
163 directly to his or her creditors.
164 (14) “Record” means information that is inscribed on a
165 tangible medium such as paper or that is stored in an electronic
166 format or other medium and is retrievable in perceivable form.
167 Section 3. Exemptions.—This act does not apply to:
168 (1) A debt settlement advisor who receives no compensation
169 for providing debt settlement services to a client.
170 (2) A judicial officer, a person acting under an order of a
171 court or an administrative agency, or an assignee for the
172 benefit of creditors.
173 (3) A bank.
174 (4) A title insurer, escrow company, or other entity that
175 provides bill-paying services if the debt settlement services
176 are incidental to the bill-paying services.
177 Section 4. Licensure required; publication of licenses.—
178 (1) A person must be licensed under this act if he or she
179 intends to provide or offers to provide debt settlement services
180 to a client who resides in this state.
181 (2) The office shall maintain and publicize on its website
182 the names and addresses of all persons licensed to provide debt
183 settlement services in this state.
184 Section 5. License application form, fee, and accompanying
185 documents.—
186 (1) The application for a license to provide debt
187 settlement services must be on a form prepared and distributed
188 by the office.
189 (2) An applicant for a debt settlement advisor license must
190 file with the office the application form, a fee established by
191 the office, which may not exceed $150, and proof that:
192 (a) The applicant is covered by a minimum insurance policy
193 in an amount specified by the office; or
194 (b) In lieu of an aggregate umbrella insurance policy, the
195 applicant has filed a surety bond with the office, in a form
196 approved by the office, for a term not less than the expiration
197 date of the license. The bond must be in an amount of at least
198 $10,000. However, the office may demand that an applicant file a
199 bond of a larger amount if the office determines that the
200 financial condition and business experience of the debt
201 settlement advisor, the history of the debt settlement advisor
202 in performing debt settlement services, and the risk to clients
203 justify a larger surety bond. The office may not require a
204 surety bond greater than $50,000. The surety bond must be to the
205 office and in favor of any clients in this state who suffer loss
206 arising out of debt settlement services from a debt settlement
207 advisor.
208 Section 6. Application for licensure; required
209 information.—
210 (1) A completed application form must include:
211 (a) The applicant's name, principal business address and
212 telephone number, and every e-mail address and Internet website
213 address used by the applicant.
214 (b) The name under which the applicant will conduct
215 business.
216 (c) The address of each location in this state, other than
217 the applicant’s principal business address, at which the
218 applicant will provide debt settlement services, or a statement
219 that the applicant will provide debt settlement service at no
220 location other than the principal business address.
221 (d) If the applicant is a business entity, the name and
222 home address of each officer and director of the applicant and
223 of each person who owns a 10 percent or greater interest in the
224 applicant.
225 (e) A statement describing, to the extent it is known or
226 should be known by the applicant, any civil or criminal
227 judgments related to financial fraud or misuse, and any
228 administrative or enforcement actions relating to financial
229 fraud or misuse, by a governmental agency in any jurisdiction
230 against the applicant or an officer, director, owner, employee,
231 or agent of the applicant's business.
232 (f) A copy of each debt-settlement-services agreement form
233 that the applicant will use in providing services to clients.
234 (g) The schedule of fees and charges that the applicant
235 intends to use in charging a client for debt settlement services
236 rendered.
237 (h) A copy of the financial analysis or budget form that
238 the applicant intends to use when reviewing a client’s financial
239 condition.
240 (i) A description of any ownership interest of 10 percent
241 or greater by a director, owner, or employee of the applicant
242 in:
243 1. Any affiliate of the applicant; or
244 2. Any entity that provides products or services to the
245 applicant or any client related to the applicant's debt
246 settlement services.
247 (j) The identity of each director who is an affiliate of
248 the applicant.
249 (k) Evidence that the applicant has a resident agent in
250 this state of record with the Department of State.
251 (l) Any other information that the office reasonably
252 requires to perform the duties of the office under section 9 of
253 this act.
254 (2) The application form must contain a statement informing
255 the applicant that a false or dishonest answer to any question
256 in the application may be grounds for denial or subsequent
257 suspension or revocation of the applicant’s license. A completed
258 application form must be signed by the applicant acknowledging
259 the accuracy and truth of each answer and statement made in the
260 application.
261 Section 7. Application for licensure; obligation to update
262 information.—An applicant or licensed debt settlement advisor
263 shall notify the office whenever there is a change of the
264 information specified in section 5 or section 6 of this act no
265 later than 30 days after the change.
266 Section 8. Application for licensure; public information.
267 The office shall make the information contained in an initial
268 application for a debt settlement advisor license and in a
269 renewal application for a debt settlement advisor license
270 available to the public.
271 Section 9. Licensure; issuance or denial.—
272 (1) The office shall approve or deny an initial application
273 for a debt settlement advisor license within 60 days after the
274 applicant files the completed application with the office. If
275 the office requests additional information from the applicant,
276 it may extend the 60-day period for not more than 45 additional
277 days. If the office denies the application, it must inform the
278 applicant in writing of the reasons for the denial.
279 (2) The office shall issue an initial license to a debt
280 settlement advisor who complies with sections 5 and 6 of this
281 act. A license is valid for 1 year after the date the license is
282 granted.
283 (3) The office may deny an application for an initial debt
284 settlement advisor license if:
285 (a) The application contains information that is materially
286 erroneous or incomplete;
287 (b) An officer, director, or owner of the applicant's
288 business has been convicted of a crime, or has had a civil
289 judgment entered against him or her involving dishonesty or the
290 violation of state or federal securities laws;
291 (c) The application is not accompanied by the fee
292 established by the office; or
293 (d) There is reasonable evidence that the applicant will
294 not operate as a debt settlement advisor in a lawful, honest,
295 and fair manner.
296 (4) If the office denies the application or does not act on
297 the application within the prescribed time, the applicant may
298 appeal and request a hearing pursuant to chapter 120, Florida
299 Statutes.
300 Section 10. License renewal.—
301 (1) A debt settlement advisor must annually renew his or
302 her license to provide debt settlement services.
303 (2) An application to renew a license as a debt settlement
304 advisor must be in a form prepared and distributed by the
305 office, and:
306 (a) Be filed at least 30 days, but no more than 60 days,
307 before the current license expires;
308 (b) Be accompanied by the fee established by the office,
309 which may not exceed the cost of processing the renewal;
310 (c) Disclose any changes in the information contained in
311 the applicant's initial application for a license or in its
312 immediately previous application for a renewal of the license,
313 as appropriate; and
314 (d) Provide any other information that the office
315 reasonably requires to perform its duties under this section.
316 (3) If a debt settlement advisor files a timely and
317 complete application for renewal of a license, the debt
318 settlement services license remains in effect until the office
319 notifies the applicant, in writing, whether the application was
320 approved or denied. If the office denies the renewal
321 application, the written notice to the debt settlement advisor
322 must include the reasons for the denial.
323 (4) If the office denies an application to renew a debt
324 settlement license, the debt settlement advisor may appeal the
325 denial and request a hearing pursuant to chapter 120, Florida
326 Statutes, within 30 days after receiving the notice of the
327 denial.
328 (5) If an appeal proceeding is commenced, the debt
329 settlement advisor may continue to provide debt settlement
330 services to a client with whom the advisor has an agreement. If
331 the denial of the renewal license is affirmed, the debt
332 settlement advisor shall discontinue providing debt settlement
333 services to clients and transfer the clients' agreements to
334 other licensed debt settlement advisors.
335 Section 11. Licensure in another state.—If a debt
336 settlement advisor holds a license or certificate of licensure
337 in another state authorizing him or her to provide debt
338 settlement services in that state, the debt settlement advisor
339 may submit a copy of that license or certificate and the
340 application used to file for a license in another state to the
341 office. The office shall accept the application and the license
342 or certificate from the other state as an application for a debt
343 settlement advisor license or for a renewal of a debt settlement
344 license, as appropriate, in this state if:
345 (1) The application from the other state requests
346 information from the advisor which is substantially similar to
347 or more comprehensive than that requested in the application
348 submitted in this state;
349 (2) The applicant provides the information required by
350 sections 5 and 6 of this act; and
351 (3) The applicant, under penalty of false statement,
352 certifies that the information contained in the application is
353 current or, to the extent it is not current, supplements the
354 application to make the information current.
355 Section 12. Requirement of good faith.—A debt settlement
356 advisor shall act in good faith in all matters under this act.
357 Section 13. Customer service.—Each licensed debt settlement
358 advisor shall maintain a toll-free telephone service, staffed at
359 a level that reasonably permits a client to speak to a customer
360 service representative, as appropriate, during ordinary business
361 hours.
362 Section 14. Prerequisites for providing debt settlement
363 services.—
364 (1) Before a licensed debt settlement advisor provides debt
365 settlement services to a client, he or she must give a potential
366 client an itemized list of goods and services available from the
367 debt settlement advisor and the charges for each service
368 rendered. The list and charges must be clear and conspicuous.
369 (2) A debt settlement advisor may not furnish debt
370 settlement services unless the debt settlement advisor has
371 prepared a financial analysis for the potential client.
372 (3) A debt settlement advisor, before signing an agreement
373 with an individual to become a potential client of the debt
374 settlement advisor, shall:
375 (a) Provide the individual with a copy of the financial
376 analysis and, in writing, a notice that identifies the debt
377 settlement advisor and acknowledges that the client may keep the
378 financial analysis even if the individual chooses not to become
379 a client of the debt settlement advisor;
380 (b) Inform the individual of the availability, at the
381 individual's option, of assistance by a toll-free telephone
382 service or in person to discuss the financial analysis required
383 in subsection (2); and
384 (c) Inform the individual that:
385 1. Not all debt settlement programs are suitable for all
386 clients;
387 2. Participation in a debt settlement program may adversely
388 affect a client's credit rating or credit scores;
389 3. Nonpayment of debt may lead creditors to increase
390 finance and other charges or undertake collection activity,
391 including litigation;
392 4. Unless the client is insolvent and a creditor settles
393 for less than the full amount of the debt, participation in the
394 program may result in the creation of taxable income to the
395 client, even though the client does not receive any money;
396 5. Specific results cannot be predicted or guaranteed and
397 the debt settlement advisor cannot force negotiations or
398 settlements with creditors who do not wish to participate in
399 negotiations, but will nevertheless advocate on behalf of the
400 client;
401 6. The debt settlement program requires that the client
402 meet a certain savings goal in order to maximize settlement
403 results;
404 7. The debt settlement advisor does not provide accounting
405 or legal advice to the client, unless the debt settlement
406 advisor is licensed to practice law in this state;
407 8. The debt settlement advisor is the client's advocate and
408 does not receive compensation from creditors, banks, or third
409 party collection agencies; and
410 9. The debt settlement advisor does not make monthly
411 payments to the client's creditors.
412 Section 15. Communication by electronic or other means.—
413 (1) A debt settlement advisor may satisfy the requirements
414 of sections 14, 17, and 23 of this act by means of the Internet
415 or other electronic means if the debt settlement advisor obtains
416 a consumer's consent in the manner provided by s. 101(c)(1) of
417 the federal act.
418 (2) The disclosures and materials required by sections 14,
419 17, and 23 shall be presented in a form that can be accurately
420 reproduced for later reference.
421 (3) With respect to disclosure by means of an Internet
422 website, the disclosure of the information required by section
423 14 must appear on one or more screens that contain no
424 information other than the information required, and the client
425 must be able to see the information on the screens before
426 agreeing to participate in the program.
427 (4) At the time of providing the materials and agreement
428 required in sections 14, 17, and 23 of this act, a debt
429 settlement advisor shall inform the client that upon electronic,
430 telephonic, or written request, the advisor shall send the
431 client a written copy of the materials and shall comply with a
432 request as provided in subsection (7).
433 (5) If a debt settlement advisor is requested, before the
434 expiration of 90 days after a program is completed or
435 terminated, to send a written copy of the materials required by
436 sections 14, 17,and 23 of this act, the debt settlement advisor
437 shall send them at no charge within 3 business days after
438 receipt of the request. However, the debt settlement advisor
439 need not comply with a request more than once per calendar month
440 or if the advisor reasonably believes that the request is made
441 for purposes of harassment. If a request is made more than 90
442 days after a program is completed or terminated, the debt
443 settlement advisor shall send within a reasonable time a written
444 copy of the materials requested.
445 (6) If a debt settlement advisor maintains an Internet
446 website, the debt settlement advisor shall disclose on the home
447 page of the website or on a page that is clearly and
448 conspicuously connected to the home page by a link that clearly
449 reveals its contents:
450 (a) The name or names under which the debt settlement
451 advisor does business; and
452 (b) The principal business address, telephone number, and
453 e-mail address, if any.
454 (7) If a client who has previously consented to electronic
455 communication in the manner provided by s. 101(c)(1) of the
456 federal act withdraws consent as provided in the federal act, a
457 debt settlement advisor may terminate the agreement with the
458 client. If the debt settlement advisor wishes to terminate the
459 agreement, he or she shall notify the client and, unless the
460 client consents to electronic communication in the manner
461 provided in s. 101(c)(1) of the federal act within 30 days after
462 receiving the notification, the agreement is terminated.
463 Section 16. Form and contents of a debt settlement
464 agreement.—
465 (1) A debt settlement services agreement must be in
466 writing, dated and signed by the client and the debt settlement
467 advisor, and delivered to the client immediately upon the
468 signing of the agreement. The agreement must include:
469 (a) The name and home address of the client.
470 (b) The name, business address, and telephone number of the
471 debt settlement advisor.
472 (c) The debt settlement services to be provided.
473 (d) The amount, or method of determining the amount, of all
474 fees, individually itemized, to be paid by the client.
475 (e) The process whereby the debt settlement advisor will
476 comply with his or her obligations under section 23 of this act.
477 (f) The statement that the client may cancel the agreement
478 as provided in section 17 of this act.
479 (g) The disclosure that the client may contact the office
480 with any questions or complaints regarding the debt settlement
481 advisor.
482 (h) The address, telephone number, and Internet address or
483 website of the office.
484 (2) For the purposes of subsection (1), delivery of an
485 electronic record occurs when it is made available in a format
486 that the client may retrieve, save, and print, and when the
487 client is notified that it is available.
488 (3) If the office supplies the debt settlement advisor with
489 any information required under paragraph (1)(h), the debt
490 settlement advisor may comply with that requirement by
491 disclosing only the information supplied by the office.
492 (4) An agreement must state that the client has a right to
493 terminate the agreement at any time by giving the debt
494 settlement advisor written or electronic notice, in which event
495 all powers of attorney granted by the client to the debt
496 settlement advisor are revoked and ineffective.
497 (5) An agreement may confer on a debt settlement advisor
498 the power of attorney to settle a client's debt for no more than
499 50 percent of the principal amount of the debt. An agreement may
500 not confer a power of attorney to settle a debt for more than 50
501 percent of the principal amount of the debt, but may confer a
502 power of attorney to negotiate with creditors of the client on
503 behalf of the client. The debt settlement advisor shall obtain
504 the consent of the client before accepting a concession
505 settlement of more than 50 percent of the principal amount of
506 the debt.
507 (6) A debt settlement services agreement may not:
508 (a) Apply to the agreement any law of any jurisdiction
509 other than the United States and this state;
510 (b) Except as permitted by the Federal Arbitration Act, 9
511 U.S.C. s. 2, as amended, or the Uniform Arbitration Act, contain
512 any modifications or limitations to otherwise available forums
513 or procedural rights, including the right to trial by jury,
514 which are generally available to the client under law and under
515 this act;
516 (c) Contain restrictions on a client's remedies under this
517 act or a law other than this act; or
518 (d) Contain a provision that:
519 1. Limits or releases the liability of any person for not
520 performing the agreement or for violating this act; or
521 2. Indemnifies any person for liability arising under the
522 agreement or this act.
523 Section 17. Cancellation of an agreement; waiver.—
524 (1) A client may cancel an agreement before midnight of the
525 3rd business day after the client executes the agreement.
526 However, if a debt settlement services agreement does not comply
527 with subsection (2), section 17, or section 23 of this act, the
528 client may cancel the agreement within 30 days after the client
529 executes the agreement. To exercise the right of cancellation,
530 the client must give notice in a record to the debt settlement
531 advisor. Notice by mail is given when mailed.
532 (2) An agreement must be accompanied by a form that
533 contains a “Notice of Right of Cancellation” heading in bold
534 faced type, underlined by bold black lines. The notice must be
535 in substantially the following form:
536
537 NOTICE OF RIGHT OF CANCELLATION
538
539 You may cancel this agreement, without any penalty or
540 obligation, at any time before midnight of the 3rd
541 business day that begins the day after you agree to it
542 by electronic communication or by signing it.
543
544 To cancel this agreement during this period, send an
545 e-mail to...(e-mail address of debt settlement
546 advisor)...or mail or deliver a signed, dated copy of
547 this notice, or any other written notice to...(name of
548 debt settlement advisor)...at...(address of debt
549 settlement advisor)...before midnight on...(date)....
550
551 If you cancel this agreement within the 3-day period,
552 we will refund all money you have already paid us.
553
554 I cancel this agreement.
555
556 ................
557 Print your name
558 ................
559 Signature
560 ................
561 Date
562
563 Section 18. Required language; rules.—Unless the office
564 provides otherwise, the disclosures and documents required by
565 this act must be in English. If a debt settlement advisor
566 communicates with a client primarily in a language other than
567 English, the debt settlement advisor must furnish a translation
568 into the other language of the disclosures and documents
569 required by this act.
570 Section 19. Fees and other charges.—
571 (1) A debt settlement advisor may not impose, directly or
572 indirectly, a fee or other charge on a client or receive money
573 from or on behalf of a client for debt settlement services
574 except as permitted by this section.
575 (2) The total aggregate fees charged by a debt settlement
576 advisor may not exceed 20 percent of the principal amount of the
577 debt.
578 (3) A debt settlement advisor may not impose charges or
579 receive payment for debt settlement services until the debt
580 settlement advisor and the client have signed a debt settlement
581 services agreement.
582 (4) If a client’s payment to a debt settlement advisor is
583 dishonored, a debt settlement advisor may impose a reasonable
584 charge to the client, not to exceed the amount permitted by law.
585 Section 20. Voluntary contributions.—A debt settlement
586 advisor may not solicit a voluntary contribution from a client
587 or an affiliate of the client for any debt settlement services
588 provided to the client.
589 Section 21. Voidable agreements.—
590 (1) If a debt settlement advisor imposes a fee or other
591 charge or receives money or other payments not authorized by
592 section 19 of this act, the client may void the agreement and
593 recover the fees or charges as provided in section 30 of this
594 act.
595 (2) If a debt settlement advisor is not licensed under this
596 act at the time a client approves the debt settlement services
597 agreement, the agreement is voidable by the client.
598 (3) If a client voids an agreement pursuant to this
599 section, the debt settlement advisor does not have a claim
600 against the client for breach of contract or for restitution.
601 Section 22. Termination of agreements.—If a client fails to
602 make payments required by the agreement for 60 days, a debt
603 settlement advisor may terminate the agreement.
604 Section 23. Periodic reports; retention of records.—
605 (1) A debt settlement advisor shall provide the accounting
606 required by subsection (2), in the following cases:
607 (a) After each settlement of a debt with a creditor on
608 behalf of a client.
609 (b) Within 5 business days after receiving a request by a
610 client. However, the debt settlement advisor need not comply
611 with more than one request in any calendar month.
612 (c) Upon cancellation or termination of an agreement.
613 (2) If a creditor has agreed to accept as payment in full
614 an amount less than the principal amount of the debt owed by a
615 client, a debt settlement advisor shall document, in a record,
616 an accounting of all of the following:
617 (a) The amount of the client’s debt when the creditor
618 agrees to a settlement.
619 (b) The amount of the debt the creditor accepts as
620 settlement in full of the debt.
621 (c) Any other terms of the settlement.
622 (d) For debt settlement advisors using fee agreements that
623 calculate any portion of the fee based on a percentage of
624 savings the client realizes from a settled debt, the calculation
625 of that fee.
626 (3) A debt settlement advisor shall maintain records for
627 each client for whom the advisor provides debt settlement
628 services for 4 years after the date the final payment is made by
629 the client. The advisor shall produce a copy of the records for
630 the client within a reasonable time after a request is received.
631 The debt settlement advisor may use electronic or other means
632 for storing records.
633 Section 24. Prohibited acts and practices of debt
634 settlement advisors.—
635 (1) A debt settlement advisor may not engage in any of the
636 following practices:
637 (a) Settle a debt on behalf of a client for more than 50
638 percent of the amount of the debt owed a creditor, unless the
639 client explicitly consents to the settlement after the creditor
640 has agreed to the settlement.
641 (b) Hold a power of attorney that authorizes a debt
642 settlement advisor to settle a debt, unless the power of
643 attorney expressly limits the debt settlement advisor's
644 authority to settle debts for not more than 50 percent of the
645 amount of the debt owed a creditor.
646 (c) Exercise or attempt to exercise a power of attorney
647 after a client has terminated an agreement.
648 (d) Initiate a transfer from a client's bank account to
649 another person unless the transfer is:
650 1. A return of money to the client;
651 2. Before termination of an agreement, payment of a fee
652 properly authorized by the agreement and this act;
653 3. A payment to a creditor to fund a negotiated settlement
654 authorized by this act; or
655 4. A payment to a creditor to fund a negotiated settlement
656 of which both the settlement and transfer of money have been
657 authorized by the client.
658 (e) Structure a settlement in a manner that would result in
659 a negative amortization of any of the client's debts.
660 (f) Settle a debt or lead a client to believe that a
661 payment to a creditor is in settlement of a debt to the creditor
662 unless, at the time of settlement, the client receives a
663 certification or confirmation by the creditor that the payment
664 is in full settlement of the debt, or is part of a payment plan
665 that is in full settlement of the debt.
666 (g) Make a representation that:
667 1. The debt settlement advisor will furnish money to pay
668 bills or prevent attachments;
669 2. Payment of a certain amount of money will guarantee
670 satisfaction of a certain amount or range of indebtedness;
671 3. Participation in a program will or may prevent
672 litigation, garnishment, attachment, repossession, foreclosure,
673 eviction, or loss of employment;
674 4. The debt settlement advisor is authorized or competent
675 to furnish legal advice or perform legal services, unless such
676 advice or services are provided by a licensed attorney working
677 with the debt settlement advisor; or
678 5. The debt settlement advisor is a not-for-profit entity,
679 unless the debt settlement advisor is organized and properly
680 operating as a not-for-profit entity under the laws of this
681 state.
682 (h) Take a confession of judgment or power of attorney to
683 confess judgment against a client.
684 (i) Employ deceptive and unfair trade practices, including
685 the knowing omission of any material information.
686 (2) If a debt settlement advisor furnishes debt settlement
687 services to a client, the debt settlement advisor may not,
688 directly or indirectly, engage in any of the following
689 practices:
690 (a) Purchase a debt or obligation of the client.
691 (b) Receive from or on behalf of the client:
692 1. A promissory note or other negotiable instrument other
693 than a check or a demand draft; or
694 2. A postdated check or demand draft.
695 (c) Lend money or provide credit to the client, except as a
696 deferral of a fee payment at no additional expense to the
697 client.
698 (d) Obtain a mortgage or other security interest from any
699 person in connection with the services provided to the client.
700 (e) Except as permitted by federal law, disclose the
701 identity or identifying information of the client or the
702 identity of the client's creditors, except to:
703 1. The office, upon proper demand;
704 2. A creditor of the client, to the extent necessary to
705 secure the cooperation of the creditor in a debt settlement
706 program; or
707 3. The extent necessary to administer the debt settlement
708 program.
709 (f) Except as otherwise provided in section 19 of this act,
710 provide the client less than the full benefit of a compromise of
711 a debt arranged by the debt settlement advisor.
712 (g) Furnish legal advice or perform legal services, unless
713 the person furnishing that advice to or performing those
714 services for the client is licensed to practice law.
715 (h) Advise clients to stop payment on any of the accounts
716 being handled by the debt settlement advisor.
717 Section 25. Advertising.—A debt settlement advisor that
718 advertises debt settlement services may not make statements that
719 are misleading or deceptive, and the advertisements may not
720 conflict with the information specified in section 14 of this
721 act.
722 Section 26. Internal complaint policy.—Each debt settlement
723 advisor shall establish a formal internal complaint policy that
724 creates a process for the debt settlement advisor to receive,
725 review, and address or resolve formal complaints internally. The
726 availability of this process shall be communicated in writing to
727 clients enrolled in the debt settlement advisor’s debt
728 settlement program. This policy must include a provision that
729 all clients who file a formal complaint will receive a response
730 from the debt settlement advisor within a reasonable time
731 following the debt settlement advisor’s receipt of such
732 complaint. The debt settlement advisor shall maintain a file
733 that documents each formal complaint, the handling and
734 resolution of each complaint, and the debt settlement advisor
735 shall disclose the file to the office upon request.
736 Section 27. Powers of administration; rules.—
737 (1) The office may act on its own initiative or in response
738 to a complaint. The office may seek voluntary compliance with
739 this act or initiate enforcement actions as provided in this
740 act.
741 (2) The office may investigate and examine, by subpoena or
742 otherwise, the activities, books, accounts, and records of a
743 debt settlement advisor or any person to whom a debt settlement
744 advisor has delegated his or her obligations under an agreement
745 or this act, in order to determine compliance with this act.
746 (3) In support of its enforcement powers, the office may:
747 (a) Charge the debt settlement advisor the reasonable
748 expenses necessarily incurred to conduct the examination;
749 (b) Require or permit the debt settlement advisor to file a
750 statement under oath as to all the facts and circumstances of
751 the matter to be investigated;
752 (c) Enter into a cooperative arrangement with any federal
753 or state agency having authority over debt settlement advisors
754 and exchange with any of those agencies information about a debt
755 settlement advisor, including information obtained during an
756 examination of the debt settlement advisor; or
757 (d) Establish reasonable fees to be paid by a debt
758 settlement advisor for the expense of administering this
759 section.
760 (4) The office may adopt rules to administer this act.
761 Section 28. Administrative remedies.—
762 (1) The office may enforce this act by:
763 (a) Ordering a debt settlement advisor, director, officer,
764 or agent of a debt settlement advisor to cease and desist from
765 any violations of this act;
766 (b) Ordering a debt settlement advisor who has violated
767 this act to correct the violation, including making restitution
768 to the person aggrieved by the violation;
769 (c) Imposing on a debt settlement advisor a civil penalty
770 not to exceed $1,000 for each violation;
771 (d) Intervening in an action brought under section 30 of
772 this act; and
773 (e) Initiating an enforcement action in the circuit court
774 to enforce an order or to obtain a restitution, an injunction,
775 or another equitable relief.
776 (2) If a person knowingly and willfully violates, or
777 authorizes, directs, or aids another to violate, a final order
778 issued under subsection (1), the office may impose an additional
779 civil penalty not exceeding $1,000 for each violation.
780 (3) The office may recover reasonable costs of enforcing
781 this act, including reasonable attorney's fees.
782 (4) In determining the amount of a civil penalty to be
783 imposed under subsection (1) or subsection (2), the office shall
784 consider the seriousness of the violation, the good faith of the
785 violator, any previous violations by the violator, the
786 deleterious effect of the violation on the public, the net worth
787 of the violator, and any other fact relevant to the
788 determination of the civil penalty.
789 Section 29. Suspension, revocation, or nonrenewal of
790 license.—
791 (1) The office may suspend, revoke, or deny the renewal of
792 a debt settlement advisor license if:
793 (a) A fact or condition exists that, if it had existed when
794 the debt settlement advisor applied for the debt settlement
795 advisor license, the fact or condition would have been a reason
796 for denying the license;
797 (b) The debt settlement advisor has committed a material
798 violation of this act or a rule or order of the office under
799 this act;
800 (c) The debt settlement advisor is insolvent;
801 (d) The debt settlement advisor or an affiliate of the debt
802 settlement advisor has refused to permit the office to make an
803 examination authorized by this act, failed to comply with
804 section 28 of this act within 30 days after request, or made a
805 material misrepresentation or omission in complying with section
806 28; or
807 (e) The debt settlement advisor has not responded within a
808 reasonable time and in an appropriate manner to communications
809 from the office.
810 (2) If the office suspends or revokes a debt settlement
811 advisor's license, the debt settlement advisor may appeal and
812 request a hearing pursuant to chapter 120, Florida Statutes.
813 Section 30. Private enforcement.—
814 (1) If a client voids an agreement pursuant to section 21
815 of this act, the client may recover in a civil action all money
816 paid by or on behalf of the client pursuant to the agreement, in
817 addition to the recovery of reasonable attorney’s fees and
818 costs.
819 (2) A client with respect to whom a debt settlement advisor
820 violates this act may recover in a civil action from the debt
821 settlement advisor and any person that caused the violation:
822 (a) Compensatory damages for economic injury caused by the
823 violation;
824 (b) Except as otherwise provided in subsection (3), the
825 greater of the amount recoverable under subsection (1) or
826 $1,000; and
827 (c) Reasonable attorney's fees and costs.
828 (3) In addition to the remedy available under subsection
829 (2), if a debt settlement advisor violates a client's rights
830 under section 19 of this act, the client may recover in a civil
831 action all money paid by or on behalf of the client pursuant to
832 the agreement, except for the amounts paid to the creditors.
833 (4) A debt settlement advisor is not liable for violating
834 this act if the debt settlement advisor proves that the
835 violation was not intentional and resulted from a good faith
836 error notwithstanding the maintenance of procedures reasonably
837 adapted to avoid the error. If, in connection with a violation,
838 the debt settlement advisor has received more money than
839 authorized by an agreement or this act, the defense provided by
840 this subsection is not available unless the debt settlement
841 advisor refunds the excess money within 3 business days after
842 learning of the violation.
843 Section 31. Deceptive or unfair trade practices; effect on
844 other remedies.—
845 (1) A violation of this act is a deceptive and unfair trade
846 practice.
847 (2) The remedies of this act are in addition to remedies
848 otherwise available for the same conduct under state law.
849 (3) This act is supplemental to, and makes no attempt to
850 preempt, other consumer protection laws that are not
851 inconsistent with this act.
852 Section 32. Statute of limitations.—
853 (1) Any enforcement action must be commenced within 4 years
854 after the conduct of the violation occurs.
855 (2) Any private enforcement action must be commenced within
856 2 years after the latest of:
857 (a) The client's last transmission of money to a debt
858 settlement advisor;
859 (b) The date on which the client discovered or reasonably
860 should have discovered the facts giving rise to the client's
861 claim; or
862 (c) Termination of actions or proceedings by the office
863 with respect to a violation of this act.
864 (3) Any limitation period prescribed in this section is
865 tolled during any period in which the debt settlement advisor
866 has materially and willfully misrepresented information required
867 to be disclosed to the client or the office by this act.
868 Section 33. Relation to the Electronic Signatures in Global
869 and National Commerce Act.—This act modifies, limits, and
870 supersedes the federal Electronic Signatures in Global and
871 National Commerce Act, 15 U.S.C. s. 7001 et seq., but does not
872 modify, limit, or supersede s. 101(c) of that act , 15 U.S.C. s.
873 7001(c), or authorize electronic delivery of any of the notices
874 described in s. 103(b) of that act, 15 U.S.C. s. 7003(b).
875 Section 34. If any provision of this act or the application
876 thereof to any person or circumstance is held invalid, the
877 invalidity does not affect other provisions or applications of
878 the act which can be given effect without the invalid provision
879 or application, and to this end the provisions of this act are
880 declared severable.
881 Section 35. This act shall take effect July 1, 2009.