1 | A bill to be entitled |
2 | An act relating to debt relief services; providing a |
3 | directive to the Division of Statutory Revision; creating |
4 | s. 559.101, F.S.; providing a short title; transferring, |
5 | renumbering, and amending s. 817.801, F.S.; revising |
6 | definitions relating to debt relief services; creating s. |
7 | 559.103, F.S.; providing the powers of the Office of |
8 | Financial Regulation; creating s. 559.104, F.S.; |
9 | authorizing the Financial Services Commission to adopt |
10 | rules; transferring, renumbering, and amending s. 817.803, |
11 | F.S.; revising provisions relating to who is not subject |
12 | to the Debt Relief Services Act; providing an exception |
13 | for attorneys representing clients; creating s. 559.106, |
14 | F.S.; requiring debt relief organizations to be registered |
15 | with the office; providing a registration fee; requiring |
16 | background screening of applicants and control persons; |
17 | providing grounds for registration issuance or denial; |
18 | requiring annual renewal; creating s. 559.107, F.S.; |
19 | requiring registration renewal; transferring, renumbering, |
20 | and amending s. 817.804, F.S.; requiring a debt relief |
21 | organization to obtain a surety bond and to provide proof |
22 | of such bond to the office; creating s. 559.109, F.S.; |
23 | requiring a debt relief organization to maintain records; |
24 | creating s. 559.111, F.S.; requiring a debt relief |
25 | organization to prepare a financial analysis for the |
26 | debtor; providing for service contracts; requiring certain |
27 | provisions to be included in such contracts; requiring the |
28 | debt relief organization to provide the debtor with copies |
29 | of all signed documents; transferring, renumbering, and |
30 | amending s. 817.805, F.S.; conforming terms to changes |
31 | made by the act; transferring, renumbering, and amending |
32 | s. 817.802, F.S.; prohibiting a debt relief organization |
33 | from engaging in certain additional specified acts; |
34 | deleting a provision that allows the organization to |
35 | collect a fee for insufficient fund transactions; creating |
36 | s. 559.114, F.S.; providing for debtor complaints to the |
37 | office; providing procedures and office duties, including |
38 | administrative penalties; creating s. 559.115, F.S.; |
39 | providing for the issuance of subpoenas by the office; |
40 | creating s. 559.116, F.S.; authorizing the office to issue |
41 | cease and desist orders; transferring, renumbering, and |
42 | amending s. 817.806, F.S.; conforming terms to changes |
43 | made by the act; providing administrative penalties; |
44 | specifying violations that result in criminal penalties; |
45 | repealing ss. 559.10, 559.11, 559.12, and 559.13, F.S., |
46 | relating to obsolete provisions concerning budget |
47 | planning; amending s. 516.07, F.S.; conforming a cross- |
48 | reference; providing effective dates. |
49 |
|
50 | Be It Enacted by the Legislature of the State of Florida: |
51 |
|
52 | Section 1. The Division of Statutory Revision is directed |
53 | to redesignate the title of part II of chapter 559, Florida |
54 | Statutes, consisting of ss. 559.101-559.117, as "Debt Relief |
55 | Services." |
56 | Section 2. Section 559.101, Florida Statutes, is created |
57 | to read: |
58 | 559.101 Short title.-This part may be cited as the "Debt |
59 | Relief Services Act." |
60 | Section 3. Section 817.801, Florida Statutes, is |
61 | transferred, renumbered as 559.102, Florida Statutes, and |
62 | amended to read: |
63 | 559.102 817.801 Definitions.-As used in this part: |
64 | (1) "Commission" means the Financial Services Commission. |
65 | (2) "Control person" means an individual, partnership, |
66 | corporation, trust, or other organization that possesses the |
67 | power, directly or indirectly, to direct the management or |
68 | policies of a company, whether through ownership of securities, |
69 | by contract, or otherwise. The term includes, but is not limited |
70 | to: |
71 | (a) A company's executive officers, including the |
72 | president, chief executive officer, chief financial officer, |
73 | chief operations officer, chief legal officer, chief compliance |
74 | officer, director, or other individuals having similar status or |
75 | functions. |
76 | (b) For a corporation, each shareholder who, directly or |
77 | indirectly, owns 10 percent or more, or who has the power to |
78 | vote 10 percent or more, of a class of voting securities, unless |
79 | the applicant is a publicly traded company. |
80 | (c) For a partnership, all general partners and limited or |
81 | special partners who have contributed 10 percent or more, or who |
82 | have the right to receive upon dissolution 10 percent or more, |
83 | of the partnership's capital. |
84 | (d) For a trust, each trustee. |
85 | (e) For a limited liability company, all managing members |
86 | and those members who have contributed 10 percent or more, or |
87 | who have the right to receive upon dissolution 10 percent or |
88 | more, of the partnership's capital. |
89 | (3)(2) "Credit counseling services" means confidential |
90 | money management, debt reduction, financial analysis, and |
91 | financial educational services provided to a debtor. The term |
92 | does not include foreclosure-related rescue services. |
93 | (4)(3) "Creditor contribution" means any sum that a |
94 | creditor agrees to contribute to a debt relief organization |
95 | credit counseling agency, whether directly or by setoff against |
96 | amounts otherwise payable to the creditor on behalf of debtors. |
97 | (5)(4) "Debt management services" means services, other |
98 | than foreclosure-related rescue services, provided to a debtor |
99 | by a debt relief credit counseling organization for a fee to: |
100 | (a) Effect the adjustment, compromise, interest rate |
101 | reduction, modification of terms, negotiation, or discharge of |
102 | any unsecured account, note, or other indebtedness of the |
103 | debtor; or |
104 | (b) Receive funds periodically from the debtor and |
105 | disburse to a creditor any money or other thing of value with |
106 | the expectation that the debtor will repay the creditor the |
107 | entire principal owed. |
108 | (6)(1) "Debt relief organization Credit counseling agency" |
109 | means a person offering to provide or any organization providing |
110 | debt management services, debt settlement services, or credit |
111 | counseling services for compensation. |
112 | (7) "Debt settlement services" means services, other than |
113 | foreclosure-related rescue services, provided to a debtor with |
114 | the expectation of obtaining the creditor's agreement to accept |
115 | less than the principal amount of a debt in full satisfaction of |
116 | the debt. |
117 | (8) "Debtor" means an individual who obtains credit, seeks |
118 | a credit agreement with a creditor, or owes money to a creditor. |
119 | (9) "Enrolled debt" means the amount of debt at the time |
120 | the contract for debt management services is entered but does |
121 | not include any increases in the amount of debt or additional |
122 | fees or penalties applied to the debt after services included in |
123 | the contract are initiated. |
124 | (10) "Financial analysis" means the review of an |
125 | individual's budget, income, expenses, and debt by the debt |
126 | relief organization in order to determine the individual's |
127 | suitability for additional credit counseling, debt management, |
128 | or debt settlement services provided by the organization. |
129 | (11) "Financial audit report" means a report prepared in |
130 | connection with a financial audit that is conducted in |
131 | accordance with generally accepted auditing standards prescribed |
132 | by the American Institute of Certified Public Accountants by a |
133 | certified public accountant licensed to do business in the |
134 | United States, which includes: |
135 | (a) Financial statements, including notes related to the |
136 | financial statements and required supplementary information, |
137 | prepared in conformity with United States generally accepted |
138 | accounting principles. |
139 | (b) An expression of opinion whether the financial |
140 | statements are presented in conformity with United States |
141 | generally accepted accounting principles, or an assertion that |
142 | such an opinion cannot be expressed and the reasons for such |
143 | assertion. |
144 | (12) "Office" means the Office of Financial Regulation of |
145 | the Financial Services Commission. |
146 | (13)(5) "Person" has the same meaning as in s. 1.01 means |
147 | any individual, corporation, partnership, trust, association, or |
148 | other legal entity. |
149 | (14) "Service contract" means the agreement for services |
150 | between a debt relief organization and a debtor. |
151 | Section 4. Section 559.103, Florida Statutes, is created |
152 | to read: |
153 | 559.103 Powers and duties of the Office of Financial |
154 | Regulation; fees.- |
155 | (1) The office is responsible for the administration and |
156 | enforcement of this part. |
157 | (2) The office may conduct an investigation of any person |
158 | if the office has reason to believe, upon complaint or |
159 | otherwise, that any violation of this part may have been |
160 | committed or is about to be committed. |
161 | (3) All fees, charges, and fines collected pursuant to |
162 | this part shall be deposited in the State Treasury to the credit |
163 | of the Regulatory Trust Fund under the office. |
164 | Section 5. Section 559.104, Florida Statutes, is created |
165 | to read: |
166 | 559.104 Rules.-The commission may adopt rules to |
167 | administer this part, including rules that: |
168 | (1) Require electronic submission of any forms, documents, |
169 | or fees required under this part. |
170 | (2) Establish time periods during which an applicant for |
171 | registration is barred from registration or a registered debt |
172 | relief organization is barred from renewal due to prior criminal |
173 | convictions of, or guilty or nolo contendere pleas by, any of |
174 | the applicant's or registrant's control persons, regardless of |
175 | adjudication. |
176 | (a) The rules must provide: |
177 | 1. Permanent bars for felonies involving money laundering, |
178 | breach of trust, dishonesty, embezzlement, fraud, fraudulent |
179 | conversion, misappropriation of property, racketeering, or |
180 | theft; |
181 | 2. A 15-year disqualifying period for felonies involving |
182 | moral turpitude; |
183 | 3. A 7-year disqualifying period for all other felonies; |
184 | and |
185 | 4. A 5-year disqualifying period for misdemeanors |
186 | involving fraud, dishonesty, or any other act of moral |
187 | turpitude. |
188 | (b) The rules may provide for an additional waiting period |
189 | due to dates of imprisonment or community supervision, the |
190 | commitment of multiple crimes, and other factors reasonably |
191 | related to the applicant's criminal history. |
192 | (c) The rules may provide for mitigating factors for |
193 | crimes identified in subparagraph (a)2. However, the mitigation |
194 | may not result in a period of disqualification less than 7 |
195 | years. The rule may not mitigate the disqualifying periods in |
196 | subparagraphs (a)1., (a)3., and (a)4. |
197 | (d) An applicant is not eligible for registration until |
198 | the expiration of the disqualifying period set by rule. |
199 | (e) Section 112.011 is not applicable to eligibility for |
200 | registration under this part. |
201 | Section 6. Section 817.803, Florida Statutes, is |
202 | transferred, renumbered as section 559.105, Florida Statutes, |
203 | and amended to read: |
204 | 559.105 817.803 Exceptions.-Nothing in This part does not |
205 | apply applies to: |
206 | (1) A person licensed to practice law in this state who is |
207 | providing credit counseling, debt management, or debt settlement |
208 | services as an ancillary matter to her or his representation of |
209 | the debtor as a client. Any Debt management or credit counseling |
210 | services provided in the practice of law in this state; |
211 | (2) A Any person who engages in credit counseling, debt |
212 | management, or debt settlement services adjustment to adjust the |
213 | indebtedness owed to such person.; or |
214 | (3) The following entities or their subsidiaries: |
215 | (a) The Federal National Mortgage Association; |
216 | (b) The Federal Home Loan Mortgage Corporation; |
217 | (c) The Florida Housing Finance Corporation, a public |
218 | corporation created in s. 420.504; |
219 | (d) Any financial institution as defined under s. |
220 | 655.005(1)(h) A bank, bank holding company, trust company, |
221 | savings and loan association, credit union, credit card bank, or |
222 | savings bank that is regulated and supervised by the Office of |
223 | the Comptroller of the Currency, the Office of Thrift |
224 | Supervision, the Federal Reserve, the Federal Deposit Insurance |
225 | Corporation, the National Credit Union Administration, the |
226 | Office of Financial Regulation of the Department of Financial |
227 | Services, or any state banking regulator; or |
228 | (e) A consumer reporting agency as defined in the Federal |
229 | Fair Credit Reporting Act, 15 U.S.C. s. 1681a ss. 1681-1681y, as |
230 | it existed on April 5, 2004; or |
231 | (f) Any subsidiary or affiliate of a bank holding company, |
232 | its employees and its exclusive agents acting under written |
233 | agreement. |
234 | Section 7. Section 559.106, Florida Statutes, is created |
235 | to read: |
236 | 559.106 Registration of debt relief organization.- |
237 | (1) Effective April 1, 2011, each person who acts as a |
238 | debt relief organization in this state must be registered in |
239 | accordance with this section. This applies to debt relief |
240 | organizations operating in this state or from another state, |
241 | regardless of whether such organization is registered, licensed, |
242 | or the equivalent in accordance with the laws of another state. |
243 | (2) In order to apply for registration, an applicant must |
244 | submit: |
245 | (a) A completed registration application form as |
246 | prescribed by commission rule which includes the name and |
247 | principal business address and e-mail address of the debt relief |
248 | organization. |
249 | (b) A registration fee of $1,000. The registration fee is |
250 | nonrefundable and may not be prorated for a partial year of |
251 | registration. |
252 | (c) Fingerprints for the applicant and each of the |
253 | applicant's control persons in accordance with rules adopted by |
254 | the commission. |
255 | 1. The fingerprints may be submitted to the office or a |
256 | vendor acting on behalf of the office. |
257 | 2. The office may contract with a third-party vendor to |
258 | provide live-scan fingerprinting in lieu of a paper fingerprint |
259 | card. |
260 | 3. A state criminal history background check must be |
261 | conducted through the Department of Law Enforcement, and a |
262 | federal criminal history background check must be conducted |
263 | through the Federal Bureau of Investigation. |
264 | 4. All fingerprints submitted to the Department of Law |
265 | Enforcement must be submitted electronically and entered into |
266 | the statewide automated fingerprint identification system |
267 | established in s. 943.05(2)(b) and available for use in |
268 | accordance with s. 943.05(2)(g) and (h). The office shall pay an |
269 | annual fee to the department to participate in the system and |
270 | inform the department of any person whose fingerprints are no |
271 | longer required to be retained. |
272 | 5. The costs of fingerprint processing, including the cost |
273 | of retaining the fingerprints, shall be borne by the person |
274 | subject to the background check. |
275 | 6. The office is responsible for reviewing the results of |
276 | the state and federal criminal history checks and determining |
277 | whether the applicant meets registration requirements. |
278 | (d) Submit documentation demonstrating that the surety |
279 | bond requirements specified in s. 559.108 have been satisfied. |
280 | (e) Submit additional information or documentation |
281 | requested by the office and required by rule concerning the |
282 | applicant or a control person of the applicant. Additional |
283 | information may include documentation of pending and prior |
284 | disciplinary and criminal history events, including arrest |
285 | reports and certified copies of charging documents, plea |
286 | agreements, judgments and sentencing documents, documents |
287 | relating to pretrial intervention, orders terminating probation |
288 | or supervised release, final administrative agency orders, or |
289 | other comparable documents that may provide the office with the |
290 | appropriate information to determine eligibility for |
291 | registration. |
292 | (3) An application is considered received for the purposes |
293 | of s. 120.60 upon the office's receipt of the completed |
294 | application form, all required documentation, criminal history |
295 | information, the application fee, and all applicable |
296 | fingerprinting processing fees. |
297 | (4) The office shall issue a debt relief organization |
298 | registration to each applicant who is not otherwise ineligible |
299 | and who meets the requirements of this section. However, it is a |
300 | ground for denial of registration if the applicant or one of the |
301 | applicant's control persons: |
302 | (a) Has been found guilty of, regardless of adjudication, |
303 | or has entered a plea of nolo contendere or guilty to, any |
304 | felony, any crime involving racketeering, fraud, theft, |
305 | embezzlement, fraudulent conversion, breach of trust, |
306 | misappropriation of property, dishonesty, or moral turpitude; |
307 | (b) Has committed any violation specified in s. 559.113; |
308 | (c) Is the subject of a pending felony criminal |
309 | prosecution or a prosecution or an administrative enforcement |
310 | action, in any jurisdiction, which involves fraud, racketeering, |
311 | embezzlement, fraudulent conversion, misappropriation of |
312 | property, theft, dishonesty, breach of trust, or any other act |
313 | of moral turpitude; |
314 | (d) Pays the office any fee, fine, or other amount with a |
315 | check or electronic transmission of funds which fails to clear |
316 | the applicant's financial institution; |
317 | (e) Makes a material misstatement on any application, |
318 | document, or record required to be submitted under this part or |
319 | the rules of the commission; or |
320 | (f) Has been the subject of any decision, finding, |
321 | injunction, suspension, prohibition, revocation, denial, |
322 | judgment, or other adverse action by any state or federal |
323 | agency. |
324 | (5) A registration issued under this section expires |
325 | annually on March 31, unless canceled, suspended, revoked, or |
326 | otherwise terminated, and must be renewed as provided under s. |
327 | 559.107. |
328 | Section 8. Effective April 1, 2011, section 559.107, |
329 | Florida Statutes, is created to read: |
330 | 559.107 Registration renewal.- |
331 | (1) In order to renew a debt relief organization |
332 | registration, a debt relief organization must submit: |
333 | (a) A completed registration renewal form as prescribed by |
334 | commission rule. |
335 | (b) Fingerprints, in accordance with s. 559.106, for any |
336 | new control persons who have not been screened. |
337 | (c) Any additional information or documentation requested |
338 | by the office and required by rule concerning the registrant or |
339 | control person of the registrant. Additional information may |
340 | include documentation of any pending and prior disciplinary and |
341 | criminal history events, including arrest reports and certified |
342 | copies of charging documents, plea agreements, judgments and |
343 | sentencing documents, documents relating to pretrial |
344 | intervention, orders terminating probation or supervised |
345 | release, final administrative agency orders, or other comparable |
346 | documents that may provide the office with the appropriate |
347 | information to determine eligibility for renewal of |
348 | registration. |
349 | (d) A nonrefundable renewal fee of $750 and nonrefundable |
350 | fees to cover the cost of further fingerprint processing and |
351 | retention as set forth in commission rule. |
352 | (2) The office may not renew a debt relief organization |
353 | registration unless the registrant continues to meet the minimum |
354 | requirements for initial registration pursuant to s. 559.106 and |
355 | adopted rule. |
356 | Section 9. Section 817.804, Florida Statutes, is |
357 | transferred, renumbered as section 559.108, Florida Statutes, |
358 | and amended to read: |
359 | 559.108 817.804 Financial requirements; surety bond; |
360 | disclosure and financial reporting.- |
361 | (1) A debt relief organization must Any person engaged in |
362 | debt management services or credit counseling services shall: |
363 | (a) Obtain from a licensed certified public accountant an |
364 | annual independent financial audit report in accordance with |
365 | generally accepted auditing standards that |
366 | include all accounts of such person in which the funds of |
367 | debtors are deposited and from which payments are made to |
368 | creditors on behalf of debtors. A debt relief organization must |
369 | submit a copy of the report to the office within 120 days after |
370 | the end of the registrant's fiscal year. The commission may |
371 | establish by rule the manner for filing a financial audit |
372 | report. |
373 | (b) Obtain and maintain at all times insurance coverage |
374 | for employee dishonesty, depositor's forgery, and computer |
375 | fraud. The insurance coverage must be in an amount not less than |
376 | the greater of $100,000 or 10 percent of the monthly average of |
377 | the aggregate amount of all deposits made by debtors to the |
378 | organization for distribution to creditors with such person by |
379 | all debtors for the 6 months immediately preceding the date of |
380 | initial application for or renewal of the insurance. The |
381 | deductible on such coverage may shall not exceed 10 percent of |
382 | the face amount of the policy coverage. |
383 | (c) Obtain and maintain a surety bond from a surety |
384 | company authorized to do business in this state. The amount and |
385 | form of the bond shall be specified by rule and must be at least |
386 | $100,000 but may not exceed $1 million. The rule must provide |
387 | allowances for business volume. The bond shall be in favor of |
388 | the state for the use and benefit of any debtor who suffers or |
389 | sustains any loss or damage by reason of any violation of this |
390 | part. Pursuant to initial registration and renewal, each |
391 | applicant shall furnish to the office: |
392 | 1. The original executed surety bond issued by a surety |
393 | company authorized to do business in this state. |
394 | 2. A statement from the surety company that the premium |
395 | for the bond has been paid in full by the applicant. |
396 | 3. A statement from the surety company that the bond |
397 | issued by the surety company meets the requirements of this |
398 | part. The liability of the surety company under any bond issued |
399 | pursuant to this section may not, in the aggregate, exceed the |
400 | amount of the bond regardless of the number or amount of any |
401 | claims filed or which might be asserted against the surety on |
402 | such bond. If multiple claims are filed which collectively |
403 | exceed the amount of the bond, the surety may pay the full |
404 | amount of the bond to the office and is not further liable under |
405 | the bond. The office shall hold such funds for distribution to |
406 | claimants and administratively determine and pay to each |
407 | claimant a pro rata share of each valid claim made within 6 |
408 | months after the date the first claim is filed against the |
409 | surety. |
410 | (2) A copy of the annual financial audit report and |
411 | insurance policies required by this section must shall be |
412 | available for public inspection at each branch location of the |
413 | organization. Copies shall be provided, upon written request, to |
414 | any party requesting a copy for a charge that does not to exceed |
415 | the cost of copying the reproduction of documents. |
416 | Section 10. Section 559.109, Florida Statutes, is created |
417 | to read: |
418 | 559.109 Maintenance of records.- |
419 | (1) Each registered debt relief organization shall |
420 | maintain, at the principal place of business designated on the |
421 | registration, all books, accounts, records, and documents |
422 | necessary to determine the registrant's compliance with this |
423 | part. |
424 | (2) The office may authorize the maintenance of records at |
425 | a location other than a principal place of business. The office |
426 | may require books, accounts, and records to be produced and |
427 | available at a reasonable and convenient location in this state. |
428 | (3) The commission may prescribe by rule the minimum |
429 | information to be shown in the books, accounts, records, and |
430 | documents of registrants so that such records enable the office |
431 | to determine the registrant's compliance with this part. |
432 | (4) All books, accounts, records, documents, and receipts |
433 | of any payment transaction must be preserved and kept available |
434 | for inspection by the office for at least 5 years after the date |
435 | the transaction is completed. The commission may prescribe by |
436 | rule requirements for the destruction of books, accounts, |
437 | records, and documents retained by the registrant after the |
438 | completion of the required 5-year period. |
439 | Section 11. Section 559.111, Florida Statutes, is created |
440 | to read: |
441 | 559.111 Financial analysis; service contracts.- |
442 | (1) Before a debtor signs a service contract, the debt |
443 | relief organization shall prepare, retain a copy of, and provide |
444 | to the debtor a written financial analysis specific to the |
445 | debtor which includes an evaluation of the debtor's income, |
446 | expenses, and all debts. An additional fee may not be charged |
447 | for the financial analysis. |
448 | (2) Based on the completed financial analysis, the debt |
449 | relief organization shall provide to the debtor, and retain a |
450 | copy of, a written determination of the debtor's suitability for |
451 | debt management or debt settlement services and whether the |
452 | debtor can reasonably meet the requirements of the service |
453 | contract, including the debtor's ability to save the amount |
454 | estimated to be needed to fund the settlement of the debt. |
455 | (3) The service contract between the debt relief |
456 | organization and the debtor must be signed and dated by the |
457 | debtor and include all of the following: |
458 | (a) The following statement in at least 12-point uppercase |
459 | type at the top of the service contract: |
460 |
|
461 | IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR |
462 | CREDITORS BEFORE SIGNING THIS CONTRACT. YOUR CREDITORS |
463 | MAY BE WILLING TO DIRECTLY NEGOTIATE A SETTLEMENT, |
464 | INTEREST RATE REDUCTION, MODIFICATION, PAYMENT PLAN, |
465 | OR RESTRUCTURING OF YOUR DEBT FREE OF CHARGE. |
466 |
|
467 | YOUR USE OF DEBT MANAGEMENT OR DEBT SETTLEMENT |
468 | SERVICES MAY RESULT IN LATE FEES, ADDITIONAL DEBTS, |
469 | AND AN ADVERSE CREDIT RATING. YOU SHOULD CONTACT YOUR |
470 | CREDITOR FOR MORE INFORMATION. |
471 |
|
472 | (b) A full and detailed description of the services to be |
473 | performed by the debt relief organization for the debtor, |
474 | including the financial analysis determining the suitability of |
475 | the debtor for debt management or debt settlement services, all |
476 | guarantees and all promises of full or partial refunds, the |
477 | estimated date or length of time by which the services are to be |
478 | performed, and a copy of the Florida Debt Relief Services Act. |
479 | (c) All terms and conditions of payment, including the |
480 | anticipated total of all payments to be made by the debtor and |
481 | the estimated amount of any payments to be made to the debt |
482 | relief organization or to any other person. |
483 | (d) The debt relief organization's principal business |
484 | address and the name and address of its agent in the state |
485 | authorized to receive service of process. |
486 | (e) A clear and conspicuous statement in boldface type, in |
487 | immediate proximity to the space reserved for the debtor's |
488 | signature, which states: "You, the debtor, may cancel this |
489 | service contract at any time before midnight of the 5th business |
490 | day after the date of signing this contract. (See the attached |
491 | notice of right to cancel for further explanation of this |
492 | right.)" |
493 | (f) A notice of right to cancel attached to the contract, |
494 | in duplicate and easily detachable, which contains the following |
495 | statement in at least 12-point uppercase type: |
496 |
|
497 | NOTICE OF RIGHT TO CANCEL |
498 |
|
499 | YOU MAY CANCEL ANY CONTRACT FOR CREDIT COUNSELING, |
500 | DEBT MANAGEMENT, OR DEBT SETTLEMENT SERVICES WITHIN 5 |
501 | BUSINESS DAYS AFTER THE DATE THE CONTRACT IS SIGNED BY |
502 | YOU WITHOUT INCURRING ANY PENALTY OR OBLIGATION. |
503 |
|
504 | YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10 |
505 | BUSINESS DAYS AFTER RECEIPT OF YOUR CANCELLATION |
506 | NOTICE. |
507 |
|
508 | TO CANCEL THIS CONTRACT, YOU MUST MAIL OR DELIVER A |
509 | SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR |
510 | ANY OTHER WRITTEN NOTICE CLEARLY INDICATING YOUR |
511 | DESIRE TO CANCEL YOUR CONTRACT. |
512 |
|
513 | TO: ...(name of debt relief organization)... |
514 | AT: ...(address)... |
515 |
|
516 | BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY |
517 | SERVICE CONTRACT, EXECUTED ON: ...(date service |
518 | contract signed)... |
519 |
|
520 | ...(Signature of Debtor)... |
521 | ...(Date)... |
522 | ...(Address)... |
523 | ...(Phone Number)... |
524 |
|
525 | (4) The debt relief organization must provide the debtor, |
526 | at the time the documents are signed, with a copy of the |
527 | completed service contract as described in subsection (3) and |
528 | all other documents the organization requires the debtor to |
529 | sign. |
530 | Section 12. Section 817.805, Florida Statutes, is |
531 | transferred, renumbered as section 559.112, Florida Statutes, |
532 | and amended to read: |
533 | 559.112 817.805 Disbursement of funds.-A debt relief |
534 | organization offering debt management services that include |
535 | disbursement to a creditor must Any person engaged in debt |
536 | management or credit counseling services shall disburse to the |
537 | appropriate creditors all funds received from a debtor, less any |
538 | fees permitted by s. 559.113 817.802 and any creditor |
539 | contributions, within 30 days after receipt of such funds. |
540 | However, a creditor contribution may not reduce any sums to be |
541 | credited to the account of a debtor making a payment to the |
542 | organization credit counseling agency for further payment to the |
543 | creditor. Further, a debt relief organization offering debt |
544 | settlement services or debt management services must any person |
545 | engaged in such services shall maintain a separate trust account |
546 | for the receipt of any funds from debtors and the disbursement |
547 | of such funds on behalf of such debtors. |
548 | Section 13. Section 817.802, Florida Statutes, is |
549 | transferred, renumbered as section 559.113, Florida Statutes, |
550 | and amended to read: |
551 | 559.113 817.802 Prohibited acts Unlawful fees and costs.- |
552 | (1) A debt relief organization may not, directly or |
553 | indirectly, charge or accept from a debtor: |
554 | (a) Any payment for services before the execution of a |
555 | written service contract. It is unlawful for any person, while |
556 | engaging in debt management services or credit counseling |
557 | services, to charge or accept from a debtor residing in this |
558 | state, directly or indirectly, |
559 | (b) A fee or contribution greater than $50 for the initial |
560 | setup or initial consultation. Subsequently, the person may not |
561 | charge or accept |
562 | (c) A fee or contribution from a debtor residing in this |
563 | state greater than $120 per year for credit counseling services |
564 | provided in addition to the initial consultation under paragraph |
565 | (b). additional consultations or, alternatively, if |
566 | (d) A fee or contribution for debt management services |
567 | which exceeds as defined in s. 817.801(4)(b) are provided, the |
568 | person may charge the greater of 7.5 percent of the amount paid |
569 | monthly by the debtor to the organization for disbursement to a |
570 | creditor person or $35 per month, whichever is greater, or 7.5 |
571 | percent of the enrolled debt. |
572 | (e) A fee or contribution for debt settlement services |
573 | which exceeds 40 percent of the savings realized, which is |
574 | defined to be the difference between the amount of enrolled debt |
575 | and the amount paid to the creditor in discharge of the enrolled |
576 | debt, less any fees collected pursuant to paragraphs (b) and |
577 | (c). However, such fees collected for debt settlement services, |
578 | in the aggregate, may not exceed 20 percent of the enrolled |
579 | debt. For service contracts requiring fees to be paid on a |
580 | monthly basis, the payment of such fees must be spread uniformly |
581 | over at least 18 months or 50 percent of the term of the |
582 | contract, whichever is greater. |
583 | (f) A fee or contribution unless the debt management |
584 | services or debt settlement services result in a settlement, |
585 | discharge, or modification of the debt on terms more favorable |
586 | to the debtor than the terms of the original agreement between |
587 | the debtor and creditor. |
588 | (g) Any fee or contribution for debt management, unless no |
589 | other payment has been received, directly or indirectly, from |
590 | the debtor for such services. Fees authorized under this |
591 | subsection may not be a part of or included in the calculation |
592 | of total enrolled debt. |
593 | (2) A debt relief organization may not: |
594 | (a) Advise any debtor, directly or indirectly, against |
595 | contacting or communicating with her or his creditors before or |
596 | during the service contract period. |
597 | (b) Make or use any false or misleading representations or |
598 | omit any material fact in connection with the offer, sale, or |
599 | provision of services, or engage, directly or indirectly, in any |
600 | fraudulent, false, misleading, unconscionable, unfair, or |
601 | deceptive act or practice in connection with the offer or sale |
602 | of any of the services of a debt relief organization. |
603 | (c) Provide services to a debtor without executing a |
604 | service contract that complies with s. 559.111. |
605 | (d) Fail to provide copies of the financial analysis, all |
606 | service contracts, and any other documents the debtor is |
607 | required to sign as provided under s. 559.111. |
608 | (e) Fail to perform any of the terms, conditions, and |
609 | obligations provided in the service contract with the debtor. |
610 | (f) Fail to disclose on any offer or sale of services, |
611 | including any Internet website, the debt relief organization's |
612 | name, business address, telephone number, and e-mail address, if |
613 | any. |
614 | (g) Fail to provide the debtor with a 5-business-day right |
615 | of cancellation without the debtor incurring any penalty or |
616 | obligation. |
617 | (h) Fail to obtain an annual financial audit report and |
618 | surety bond. |
619 | (i) Fail to submit an annual financial audit report to the |
620 | office. |
621 | (j) Fail to report on a form prescribed by commission rule |
622 | any change to information contained in an initial application |
623 | form or any amendment to the application within 30 days after |
624 | the change is effective. |
625 | (k) Fail to comply with any of the provisions of this |
626 | part. |
627 | (2) This section does not prohibit any person, while |
628 | engaging in debt management or credit counseling services, from |
629 | imposing upon and receiving from a debtor a reasonable and |
630 | separate charge or fee for insufficient funds transactions. |
631 | Section 14. Section 559.114, Florida Statutes, is created |
632 | to read: |
633 | 559.114 Debtor complaints; administrative duties.- |
634 | (1) The office shall receive and maintain records of |
635 | correspondence and complaints from debtors concerning any person |
636 | who provides credit counseling, debt management, or debt |
637 | settlement services, including any debt relief organization. |
638 | (2) The office shall inform and furnish relevant |
639 | information to the appropriate regulatory body if a debt relief |
640 | organization exempt from registration under this part has been |
641 | named in consumer complaints alleging violations of this part. |
642 | (3) The office shall investigate complaints and record the |
643 | resolution of such complaints. |
644 | (4) A debt relief organization that provides or attempts |
645 | to provide debt management or debt settlement services without |
646 | first registering in accordance with this part is subject to a |
647 | penalty of up to $25,000 in addition to the other remedies |
648 | provided in this part and under part II of chapter 501. The |
649 | office shall advise the appropriate state attorney, or the |
650 | Attorney General, of any determination by the office of a |
651 | violation of this part by any debt relief organization that is |
652 | not registered as required by this part. The office shall |
653 | furnish the state attorney or Attorney General with the office's |
654 | information concerning the alleged violations of such |
655 | requirements. The enforcing authority is entitled to reasonable |
656 | attorney's fees and costs in any action brought to enforce this |
657 | part against an unregistered debt relief organization. |
658 | (5) A registered debt relief organization must provide a |
659 | written response to the office within 20 days after receipt of a |
660 | written request from the office for information concerning a |
661 | consumer complaint. The response must address the issues and |
662 | allegations raised in the complaint. The office may impose an |
663 | administrative fine of up to $2,500 per request per day upon any |
664 | registrant that fails to comply with this subsection. |
665 | Section 15. Section 559.115, Florida Statutes, is created |
666 | to read: |
667 | 559.115 Subpoenas.- |
668 | (1) The office may: |
669 | (a) Issue and serve subpoenas and subpoenas duces tecum to |
670 | compel the attendance of witnesses and the production of all |
671 | books, accounts, records, and other documents and materials |
672 | relevant to an investigation conducted by the office. The |
673 | office, or its authorized representative, may administer oaths |
674 | and affirmations to any person. |
675 | (b) Seek subpoenas or subpoenas duces tecum from any court |
676 | to command the appearance of witnesses and the production of |
677 | books, accounts, records, and other documents or materials at a |
678 | time and place named in the subpoenas, and an authorized |
679 | representative of the office may serve such subpoenas. |
680 | (2) If there is substantial noncompliance with a subpoena |
681 | or subpoena duces tecum issued by the office, the office may |
682 | petition the court in the county where the person subpoenaed |
683 | resides or has her or his principal place of business for an |
684 | order requiring the person to appear, testify, or produce such |
685 | books, accounts, records, and other documents as are specified |
686 | in the subpoena or subpoena duces tecum. |
687 | (3) The office is entitled to the summary procedure |
688 | provided in s. 51.011, and the court shall advance such cause on |
689 | its calendar. Attorney's fees and any other costs incurred by |
690 | the office to obtain an order granting, in whole or in part, a |
691 | petition for enforcement of a subpoena or subpoena duces tecum |
692 | shall be taxed against the subpoenaed person, and failure to |
693 | comply with such order is a contempt of court. |
694 | (4) To aid in the enforcement of this part, the office may |
695 | require or permit a person to file a statement in writing, under |
696 | oath or otherwise as the office determines, as to all the facts |
697 | and circumstances concerning the matter to be investigated. |
698 | Section 16. Section 559.116, Florida Statutes, is created |
699 | to read: |
700 | 559.116 Cease and desist orders.-The office may issue and |
701 | serve upon any person an order to cease and desist and to take |
702 | corrective action if it has reason to believe the person is |
703 | violating, has violated, or is about to violate any provision of |
704 | this part, any rule or order issued under this part, or any |
705 | written agreement between the person and the office. All |
706 | procedural matters relating to issuance and enforcement of such |
707 | order are governed by the Administrative Procedure Act. |
708 | Section 17. Section 817.806, Florida Statutes, is |
709 | transferred, renumbered as section 559.117, Florida Statutes, |
710 | and amended to read: |
711 | 559.117 817.806 Violations; penalties.- |
712 | (1) Any person who violates any provision of this part |
713 | commits an unfair or deceptive trade practice as defined in part |
714 | II of chapter 501, and. violators are also shall be subject to |
715 | the penalties, and remedies, and enforcement actions provided |
716 | therein. Further, any debtor consumer injured by a violation of |
717 | this part may bring an action for recovery of damages. Judgment |
718 | shall be entered for actual damages, but in no case less than |
719 | the amount paid by the debtor consumer to the debt relief |
720 | organization credit counseling agency, plus reasonable |
721 | attorney's fees and costs. |
722 | (2) The office may impose an administrative fine on, or |
723 | revoke or suspend the registration of a registrant who has |
724 | committed a violation of this part. Final action to fine, |
725 | suspend, or revoke the registration of a registrant is subject |
726 | to review in accordance with chapter 120. |
727 | (a) The office may impose suspension rather than |
728 | revocation of a registration if circumstances warrant that one |
729 | or the other should be imposed and the registrant demonstrates |
730 | that the registrant has taken affirmative steps that can be |
731 | expected to effectively eliminate the violations and that the |
732 | registrant's registration has never been previously suspended. |
733 | (b) In addition to, or in lieu of suspension or revocation |
734 | of a registration, the office may impose an administrative fine |
735 | of up to $25,000 per violation. The office shall adopt rules |
736 | establishing guidelines for imposing administrative penalties. |
737 | (3)(2) It is Any person who violates any provision of this |
738 | part commits a felony of the third degree, punishable as |
739 | provided in s. 775.082, or s. 775.083, or s. 775.084 for any |
740 | person to provide debt management or debt settlement services in |
741 | this state without first registering with the office, or to |
742 | register or attempt to register by means of fraud, |
743 | misrepresentation, or concealment. |
744 | Section 18. Sections 559.10, 559.11, 559.12, and 559.13, |
745 | Florida Statutes, are repealed. |
746 | Section 19. Paragraph (g) of subsection (1) of section |
747 | 516.07, Florida Statutes, is amended to read: |
748 | 516.07 Grounds for denial of license or for disciplinary |
749 | action.- |
750 | (1) The following acts are violations of this chapter and |
751 | constitute grounds for denial of an application for a license to |
752 | make consumer finance loans and grounds for any of the |
753 | disciplinary actions specified in subsection (2): |
754 | (g) Any violation of part III of chapter 817 or part II of |
755 | chapter 559 or of any rule adopted under part II of chapter 559. |
756 | Section 20. Except as otherwise expressly provided in this |
757 | act, this act shall take effect January 1, 2011. |