AB902: Bill Text

AB902,22,6 a. The identity of the creditor.

AB902,22,7 b. The right of the individual to modify or terminate the agreement.

AB902,22,14 (e) An agreement may confer on a provider a power of attorney to settle the individual's debt for no more than 50 percent of the amount of the debt. An agreement may not confer a power of attorney to settle a debt for more than 50 percent of that amount, but may confer a power of attorney to negotiate with creditors of the individual on behalf of the individual. An agreement shall provide that the provider will obtain the assent of the individual after a creditor has assented to a settlement for more than 50 percent of the amount of the debt.

AB902,22,15 (f) An agreement may not do any of the following:

AB902,22,17 1. Provide for application of the law of any jurisdiction other than the United States and this state.

AB902,22,21 2. Except as permitted by 9 USC 2 or ch. 788, contain a provision that modifies or limits otherwise available forums or procedural rights, including the right to trial by jury, that are generally available to the individual under law other than this section.

AB902,22,23 3. Contain a provision that restricts the individual's remedies under this section or law other than this section.

AB902,22,24 4. Contain a provision that does any of the following:

AB902,23,2 a. Limits or releases the liability of any person for not performing the agreement or for violating this section.

AB902,23,4 b. Indemnifies any person for liability arising under the agreement or this section.

AB902,23,7 (g) All rights and obligations specified in par. (d) and sub. (17) exist even if not provided in the agreement. A provision in an agreement which violates par. (d), (e), or (f) is void.

AB902,23,13 (17) Cancellation of agreement; waiver. (a) An individual may cancel an agreement before midnight of the 3rd business day after the individual assents to it, unless the agreement does not comply with par. (b) or sub. (16) or (24), in which event the individual may cancel the agreement within 30 days after the individual assents to it. To exercise the right of cancellation, the individual shall give notice in a record to the provider. Notice by mail is given when mailed.

AB902,23,15 (b) An agreement shall be accompanied by a form that contains all of the following in boldface type, surrounded by bold black lines:

AB902,23,16 Notice of Right of Cancellation

AB902,23,19 You may cancel this agreement, without any penalty or obligation, at any time before midnight of the 3rd business day that begins the day after you agree to it by electronic communication or by signing it.

AB902,23,20 To cancel this agreement during this period, send an e-mail to:

AB902,23,21 ...........................................................

AB902,23,22   E-mail address of provider

AB902,23,23 or mail or deliver a signed, dated copy of this notice, or any other written notice to:

AB902,23,24 ........................................................... at ..........................................................

AB902,23,25     Name of provider            Address of provider

AB902,24,1 before midnight on: ............................................................

AB902,24,2                  Date

AB902,24,4 If you cancel this agreement within the 3-day period, we will refund all money you already have paid us.

AB902,24,5 I cancel this agreement,

AB902,24,6 .......................................................................

AB902,24,7      Print your name

AB902,24,8 .......................................................................

AB902,24,9       Signature

AB902,24,10 .......................................................................

AB902,24,11        Date

AB902,24,16 (c) If an individual terminates an agreement that is not otherwise subject to par (a), and the individual has fulfilled his or her obligations under the agreement, the provider shall refund 65 percent of any collected fees, excluding enrollment or setup fees and fees earned on debt settled at the time of the termination of the contract.

AB902,24,21 (18) Required language. Unless the division, by rule, provides otherwise, the disclosures and documents required by this section shall be in English. If a provider communicates with an individual primarily in a language other than English, the provider shall furnish a translation into the other language of the disclosures and documents required by this section.

AB902,24,24 (19) Fees and other charges. (a) A provider may not impose charges or receive payment for debt-settlement services until the provider and the individual have signed an agreement that complies with subs. (16) and (24).

AB902,25,5 (b) If an individual assents to an agreement, a provider may not impose a fee or other charge for educational or counseling services, or the like, that is not provided for in writing in the agreement. If a payment to a provider by an individual under this section is dishonored, a provider may impose a reasonable charge on the individual.

AB902,25,8 (20) Voluntary contributions. A provider may not solicit a voluntary contribution from an individual or an affiliate of the individual for any service provided to the individual.

AB902,25,11 (21) Voidable agreements. (a) If a provider imposes a fee or other charge or receives money or other payments not authorized by sub. (19) or (20), the individual may void the agreement and recover as provided in sub. (31).

AB902,25,13 (b) If a provider is not licensed as required by this section when an individual assents to an agreement, the agreement is voidable by the individual.

AB902,25,15 (c) If an individual voids an agreement under par. (b), the provider does not have a claim against the individual for breach of contract or for restitution.

AB902,25,18 (22) Termination of agreements. If an individual who has entered into a fee agreement fails for 60 days to make payments required by the agreement, a provider may terminate the agreement.

AB902,25,22 (23) Periodic reports and retention of records. (a) If a creditor has agreed to accept as payment in full an amount less than the principal amount of the debt owed by an individual, a provider who has established a program for the individual shall document, in a record, an accounting of all of the following:

AB902,25,23 1. The total amount and terms of the settlement.

AB902,25,24 2. The amount of the debt when the individual assented to the program.

AB902,25,25 3. The amount of the debt when the creditor agreed to the settlement.

AB902,26,3 4. If the provider uses a fee agreement that calculates any portion of the fee based on a percentage of savings the individual realized from a settled debt, the calculation of a settlement fee.

AB902,26,9 (b) A provider shall provide the accounting required by par. (a) upon cancellation or termination of an agreement. Before cancellation or termination of any agreement, a provider shall also provide the accounting required by par. (a) after each settlement of a debt with a creditor on behalf of the individual, and within 5 business days after a request by an individual, except that the provider need not comply with more than one such request in any calendar month.

AB902,26,13 (c) A provider shall maintain records for each individual for whom it provides debt-settlement services for 5 years after the final payment made by the individual and produce a copy of them to the individual within a reasonable time after a request for them. The provider may use electronic or other means of storage of the records.

AB902,26,15 (24) Prohibited acts and practices. (a) A provider may not, directly or indirectly, do any of the following:

AB902,26,18 1. Settle a debt on behalf of an individual for more than 50 percent of the amount of the debt owed a creditor, unless the individual assents to the settlement after the creditor has assented.

AB902,26,21 2. Take a power of attorney that authorizes it to settle a debt, unless the power of attorney expressly limits the provider's authority to settle debts for not more than 50 percent of the amount of the debt owed a creditor.

AB902,26,23 3. Exercise or attempt to exercise a power of attorney after an individual has terminated an agreement.

AB902,26,25 4. Initiate a transfer from an individual's account at a financial institution or with another person unless any of the following apply:

AB902,27,1 a. The transfer is a return of money to the individual.

AB902,27,3 b. The transfer occurs before termination of an agreement, is properly authorized by the agreement and this section, and is for payment of a fee.

AB902,27,5 c. The transfer is in payment of a creditor to fund a negotiated settlement of which both the settlement and transfer of money has been authorized by the debtor.

AB902,27,7 5. Offer a gift or bonus, premium, reward, or other compensation to an individual for executing an agreement.

AB902,27,11 6. Structure a program in a manner that would result in a negative amortization of any of an individual's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt.

AB902,27,16 7. Settle a debt or lead an individual to believe that a payment to a creditor is in settlement of a debt to the creditor unless, at the time of settlement, the individual receives a certification or confirmation by the creditor that the payment is in full settlement of the debt or is part of a payment plan that is in full settlement of the debt.

AB902,27,17 8. Make a representation of any of the following:

AB902,27,18 a. That the provider will furnish money to pay bills or prevent attachments.

AB902,27,20 b. That payment of a certain amount will guarantee satisfaction of a certain amount or range of indebtedness.

AB902,27,22 c. That participation in a program will or may prevent litigation, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment.

AB902,27,24 9. Misrepresent that it is authorized or competent to furnish legal advice or perform legal services.

AB902,28,4 10. Represent that it is a not-for-profit entity unless it is organized and properly operating as a not-for-profit under the law of the state in which it was formed or that it is a tax-exempt entity unless it has received certification of tax-exempt status from the Internal Revenue Service.

AB902,28,6 11. Take a confession of judgment or power of attorney to confess judgment against an individual.

AB902,28,8 12. Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information.

AB902,28,10 (b) If a provider furnishes debt-settlement services to an individual, the provider may not, directly or indirectly, do any of the following:

AB902,28,11 1. Purchase a debt or obligation of the individual.

AB902,28,12 2. Receive from or on behalf of the individual any of the following:

AB902,28,14 a. A promissory note or other negotiable instrument other than a check or a demand draft.

AB902,28,15 b. A post-dated check or demand draft.

AB902,28,17 3. Lend money or provide credit to the individual, except as a deferral of a settlement fee at no additional expense to the individual.

AB902,28,19 4. Obtain a mortgage or other security interest from any person in connection with the services provided to the individual.

AB902,28,22 5. Except as permitted by federal law, disclose the identity or identifying information of the individual or the identity of the individual's creditors, except to any of the following:

AB902,28,23 a. The division, upon proper demand.

AB902,28,25 b. A creditor of the individual, to the extent necessary to secure the cooperation of the creditor in a program.

AB902,29,1 c. The extent necessary to administer the program.

AB902,29,3 6. Except for a settlement fee, if any, provide the individual less than the full benefit of a compromise of a debt arranged by the provider.

AB902,29,7 7. Charge the individual for or provide credit or other insurance, coupons for goods or services, membership in a club, access to computers or the Internet, or any other matter not directly related to debt-settlement services or educational services concerning personal finance.

AB902,29,10 8. Furnish legal advice or perform legal services, unless the person furnishing that advice to or performing those services for the individual is licensed to practice law.

AB902,29,12 9. Advise individuals to stop payment on any of the accounts being handled by the provider.

AB902,29,15 10. Receive compensation from creditors of the individual, financial institutions of which the individual is a customer, or 3rd-party collection agencies acting on behalf of creditors of the individual.

AB902,29,16 (c) This section does not authorize any person to engage in the practice of law.

AB902,29,21 (d) A provider may not receive a gift or bonus, premium, reward, or other compensation, directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining, an extension of credit or other service from a lender or service provider, except for educational or counseling services required in connection with a government-sponsored program.

AB902,30,2 (25) Notice of litigation. No later than 30 days after a provider has been served with notice of a civil action for violation of this section by or on behalf of an individual who resides in this state at either the time of an agreement or the time the notice is served, the provider shall notify the division in a record that it has been sued.

AB902,30,5 (26) Advertising. A provider that advertises debt-settlement services shall disclose no information in conflict with the information specified in sub. (14) (d) 3. and 4.

AB902,30,9 (27) Liability for the conduct of other persons. If a provider delegates any of its duties or obligations under an agreement or this section to another person, including an independent contractor, the provider is liable for conduct of the person which, if done by the provider, would violate the agreement or this section.

AB902,30,13 (28) Powers of division. (a) The division may act on its own initiative or in response to complaints and may receive complaints, take action to obtain voluntary compliance with this section, refer cases to the attorney general, and seek or provide remedies as provided in this section.

AB902,30,20 (b) The division may investigate and examine, in this state or elsewhere, by subpoena or otherwise, the activities, books, accounts, and records of a person that provides or offers to provide debt-settlement services, or a person to which a provider has delegated its obligations under an agreement or this section, to determine compliance with this section. Information that identifies individuals who have agreements with the provider shall not be disclosed to the public. In connection with the investigation, the division may do any of the following: