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218.02(6)(a)1. 1. If the licensee has failed to pay the annual license fee or to maintain in effect the bond required under the provisions of this section;
218.02(6)(a)2. 2. If the licensee has violated any provisions of this section or of any lawful order issued hereunder;
218.02(6)(a)3. 3. If any fact or condition exists which, if it had existed at the time of the original application for such license, clearly would have warranted the division in refusing to issue such license;
218.02(6)(a)4. 4. If the licensee has demonstrated untrustworthiness or incompetency to act in such business in a manner to safeguard the interests of the public.
218.02(6)(b) (b) In accordance with a memorandum of understanding entered into under s. 49.857, the division shall restrict or suspend a license if the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse.
218.02(6)(c) (c) In accordance with s. 73.0301, the division shall revoke a license if the department of revenue has certified under s. 73.0301 that the licensee is liable for delinquent taxes.
218.02(6)(d) (d) In accordance with s. 108.227, the division shall revoke a license if the department of workforce development has certified under s. 108.227 that the licensee is liable for delinquent unemployment insurance contributions.
218.02(7) (7)Powers of division. It shall be the duty of the division and the division shall have power, jurisdiction and authority to investigate the conditions and ascertain the facts with reference to such companies and upon the basis thereof:
218.02(7)(a) (a) To issue general or special orders in execution of or supplementary to this section, but not in conflict therewith, to protect debtors from oppressive or deceptive practices of licensees;
218.02(7)(b) (b) To regulate advertising and solicitation of business by licensees, and to prevent evasions of this section;
218.02(7)(c) (c) At any time and so often as the division may determine to investigate the business and examine the books, accounts, records and files used therein of every licensee. The cost of an examination shall be determined by the division and shall be paid to the division by every licensee so examined within 30 days after demand therefor by the division, and the state may maintain an action for the recovery of such costs in any court of competent jurisdiction;
218.02(7)(d) (d) To determine and fix by general order the maximum fees or charges that such companies may make.
218.02(8) (8)Statement to debtor. When any settlement or reduction of accounts has been made by such company, it shall furnish the debtor on demand a verified statement showing the amount due creditors by the terms of such settlement or reduction.
218.02(9) (9)Rules and reports; fees; enforcement.
218.02(9)(a)(a) The division may make such rules and require such reports as the division deems necessary for the enforcement of this section. Sections 217.17, 217.18 and 217.21 (1) and (2) apply to and are available for the purposes of this section. This paragraph does not apply to any of the following:
218.02(9)(a)1. 1. Applications for licenses that are denied, or licenses that are revoked, because the department of revenue has certified under s. 73.0301 that the applicant or licensee is liable for delinquent taxes.
218.02(9)(a)1m. 1m. Applications for licenses that are denied, or licenses that are revoked, because the department of workforce development has certified under s. 108.227 that the applicant or licensee is liable for delinquent unemployment insurance contributions.
218.02(9)(a)2. 2. Applications for licenses that are denied or licenses that are restricted or suspended because the applicant or licensee has failed to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse.
218.02(9)(b) (b) All fees and moneys received by the division under authority of this chapter shall be paid by the division into the state treasury within one week after the receipt thereof.
218.02(9)(c) (c) The division shall investigate, ascertain and determine whether this chapter or the lawful orders issued hereunder are being violated and for such purposes the division shall have all of the powers conferred by ss. 217.17 and 217.18. The division shall report all violations to the district attorney of the proper county for prosecution.
218.02(10) (10)Penalties. Any person violating any of the provisions of this section shall be punished by a fine of not more than $500 or by imprisonment in the county jail for not more than 90 days, or by both such fine and imprisonment.
218.02 Cross-reference Cross-reference: See also ch. DFI-Bkg 73, Wis. adm. code.
218.02 Annotation According the division of banking's interpretation of sub. (1) (a) great weight deference, its determination that the petitioner was an adjustment service company subject to licensing because the petitioner was engaged in the business of prorating the income of a debtor to the debtor's creditor or creditors was reasonable, although the petitioner did not receive money from debtors to distribute to creditors. JK Harris Financial Recovery Systems, LLC v. Department of Financial Institutions, 2006 WI App 107, 293 Wis. 2d 753, 718 N.W.2d 739, 05-0631.
subch. III of ch. 218 SUBCHAPTER III
COLLECTION AGENCIES
218.04 218.04 Collection agencies.
218.04(1) (1) Definitions. The following terms, as used in this section, shall have the meaning stated, unless the context requires a different meaning:
218.04(1)(a) (a) "Collection agency" means any person engaging in the business of collecting or receiving for payment for others of any account, bill, or other indebtedness. "Collection agency" does not include attorneys at law authorized to practice in this state and resident herein, banks, express companies, health care billing companies, state savings banks, state savings and loan associations, insurers and their agents, trust companies, district attorneys acting under s. 971.41, persons contracting with district attorneys under s. 971.41 (5), real estate brokers, and real estate salespersons.
218.04(1)(b) (b) "Collector" or "solicitor" means any person employed by a collection agency to collect or receive payment or to solicit the receiving or collecting of payment for others of any account, bill or other indebtedness outside of the office.
218.04(1)(c) (c) "Division" means the division of banking.
218.04(1)(d) (d) "General order" means an order which is not a special order.
218.04(1)(e) (e) "Licensee" means a person licensed under this section.
218.04(1)(f) (f) "Person" includes individuals, partnerships, associations, corporations and limited liability companies.
218.04(1)(g) (g) "Special order" means an order against a person.
218.04(2) (2)Licenses required.
218.04(2)(a)(a) Except as provided in par. (b), a person may not operate as a collection agency or as a collector or solicitor in this state without first having obtained a license as required by this section.
218.04(2)(b) (b) A nonresident of this state is not required to obtain a collection agency license if that person conducts collection business with state residents solely by means of interstate telecommunications or interstate mail.
218.04(3) (3)Licenses; applications; fees; bond.
218.04(3)(a)1.1. Application for licenses under the provisions of this section shall be made to the division in writing, under oath, on a form to be prescribed by the division. All licenses shall expire on June 30 next following their date of issue. Except as provided in subd. 3., an application for a license under this section shall include the following:
218.04(3)(a)1.a. a. If the applicant is an individual, the applicant's social security number.
218.04(3)(a)1.b. b. If the applicant is not an individual, the applicant's federal employer identification number.
218.04(3)(a)2. 2. The division may not disclose any information received under subd. 1. to any person except as follows:
218.04(3)(a)2.a. a. The division may disclose information under subd. 1. to the department of revenue for the sole purpose of requesting certifications under s. 73.0301 and to the department of workforce development for the sole purpose of requesting certifications under s. 108.227.
218.04(3)(a)2.b. b. The division may disclose information under subd. 1. a. to the department of children and families in accordance with a memorandum of understanding under s. 49.857.
218.04(3)(a)3. 3. If an applicant who is an individual does not have a social security number, the applicant, as a condition of applying for or applying to renew a license under this section, shall submit a statement made or subscribed under oath or affirmation to the division that the applicant does not have a social security number. The form of the statement shall be prescribed by the department of children and families. Any license issued or renewed in reliance upon a false statement submitted by an applicant under this subdivision is invalid.
218.04(3)(b) (b) At the time of making application, every applicant for a collection agency license shall pay a nonrefundable fee of $1,000 to the division for investigating the application, unless the applicant is already licensed under this section, and the sum of $200 as an annual license fee. If the cost of investigation exceeds $1,000, the applicant shall, upon demand of the division, pay the excess cost. No investigation fee is required on the renewal of a license.
218.04(3)(c) (c) The license fee for a collector or solicitor shall be $15, except that no license fee is required for an individual who is eligible for the veterans fee waiver program under s. 45.44. This license shall be carried as a means of identification whenever the collector is engaged in business. The license shall state the name of the employer and shall be surrendered to the division upon termination of employment. A new license is required for a change of employment.
218.04(3)(d) (d) The division may require any licensee to file and maintain in force a bond, in a form to be prescribed by and acceptable to the division, and in such sum as the division may deem reasonably necessary to safeguard the interests of the public.
218.04(4) (4)Issuance or denial of licenses.
218.04(4)(a)(a) Except as provided in par. (am), upon the filing of such application and the payment of such fee, the division shall make an investigation, and if the division finds that the character and general fitness and the financial responsibility of the applicant, and the members thereof if the applicant is a partnership, limited liability company or association, and the officers and directors thereof if the applicant is a corporation, warrant the belief that the business will be operated in compliance with this section the division shall thereupon issue a license to said applicant. Such license is not assignable and shall permit operation under it only at or from the location specified in the license. A nonresident of this state may, upon complying with all other provisions of this section, secure a collection agency license provided the nonresident maintains an active office in this state.
218.04(4)(am) (am) The division may not issue or renew a license under this section if any of the following applies:
218.04(4)(am)1. 1. The applicant fails to provide any information required under sub. (3) (a) 1.
218.04(4)(am)2. 2. The department of revenue certifies under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant for whom a license is not issued or renewed under this subdivision for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.
218.04(4)(am)2m. 2m. The department of workforce development certifies under s. 108.227 that the applicant is liable for delinquent unemployment insurance contributions. An applicant for whom a license is not issued or renewed under this subdivision for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and hearing under s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section.
218.04(4)(am)3. 3. The applicant fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. An applicant whose application is denied under this subdivision for delinquent payments is entitled to a notice and hearing under s. 49.857 but is not entitled to any other notice or hearing under this section.
218.04(4)(b) (b) No licensee shall conduct a collection agency business within any office, room or place of business in which any other business is solicited or engaged in, or in association or conjunction therewith, except as may be authorized in writing by the division upon finding that the character of such other business is such that the granting of such authority would not facilitate evasion of this section or the lawful orders issued thereunder.
218.04(5) (5)Revocation; suspension; reinstatement of licenses.
218.04(5)(a)(a) The division may suspend or revoke any license issued under this section if the division finds that:
218.04(5)(a)1. 1. The licensee has violated any of the provisions of this section or any lawful order of the division made thereunder;
218.04(5)(a)2. 2. Any fact or condition exists which, if it had existed at the time of the original application for such license, would have warranted the division in refusing to issue such license;
218.04(5)(a)3. 3. The licensee has failed to pay the annual license fee or to maintain in effect the bond required under sub. (3) (d);
218.04(5)(a)4. 4. The licensee has failed to remit money due to any and all claimants or forwarders within 30 days from the close of the month during which the collection was effected; or
218.04(5)(a)5. 5. The licensee or any officer or employee of it has violated chs. 421 to 427 and 429.
218.04(5)(am) (am) The division shall restrict or suspend a license issued under this section if the division finds that the licensee is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. A licensee whose license is restricted or suspended under this paragraph is entitled to a notice and hearing only as provided in a memorandum of understanding entered into under s. 49.857 and is not entitled to any other notice or hearing under this section.
218.04(5)(ar) (ar) The division shall revoke a license issued under this section if the department of revenue certifies under s. 73.0301 that the licensee is liable for delinquent taxes. A licensee whose license is revoked under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.
218.04(5)(at) (at) The division shall revoke a license issued under this section if the department of workforce development certifies under s. 108.227 that the licensee is liable for delinquent unemployment insurance contributions. A licensee whose license is revoked under this paragraph for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and a hearing under s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section.
218.04(5)(b) (b) Except as provided in pars. (am) to (at), no license shall be revoked or suspended except after a hearing under this section. A complaint stating the grounds for suspension or revocation together with a notice of hearing shall be delivered to the licensee at least 5 days in advance of the hearing. In the event the licensee cannot be found, complaint and notice of hearing may be left at the place of business stated in the license and this shall be deemed the equivalent of delivering the notice of hearing and complaint to the licensee.
218.04(5)(c) (c) In the event of the death of a licensee, if the licensee is an individual, or of the partners, if the licensee is a partnership, the license of the agency shall terminate as of the date of death of said licensee, except the division may reinstate a license if the estate of the former licensee signifies to the division within 45 days its intention to continue the business of the agency.
218.04(6) (6)Licenses; posting; changes of location; renewal.
218.04(6)(a)(a) Whenever a collection agency shall contemplate a change of its place of business to another location within the same city or village, it shall give written notice thereof to the division, which shall attach to the license the division's authorization of such removal, specifying the date thereof and the new location. Such authorization shall be authority for the operation of such business under the same license at the specified new location. All collection agency licenses shall be conspicuously posted in the office of the licensee.
218.04(6)(b) (b) Every licensee applying for a renewal of a license shall, on or before the first day of June, pay in advance to the division the annual license fee.
218.04(6)(c) (c) Before discontinuing operating as a collection agency under the provisions of this section, every licensee shall furnish the division with proof in a form to be determined by the division and approved by the advisory committee that:
218.04(6)(c)1. 1. Proper remittance has been made to all claimants or forwarders on money collected.
218.04(6)(c)2. 2. All accounts have been returned to the claimants or forwarders.
218.04(6)(c)3. 3. All valuable papers given to the licensee by the claimant or forwarder in connection with claims have been returned to the claimants or forwarders.
218.04(7) (7)Powers of division; advisory committees. It shall be the duty of the division and the division shall have power, jurisdiction and authority to investigate the conditions and ascertain the facts with reference to the collection of accounts and upon the basis thereof:
218.04(7)(a) (a) To issue any general or special order in execution of or supplementary to this chapter to protect the public from oppressive or deceptive practices of licensees and to prevent evasions of this chapter.
218.04(7)(b) (b) For the purpose of discovering violations of this section the division may cause an investigation to be made of the business of the licensee transacted under the provisions of this section, and shall cause an investigation to be made of convictions reported to the division by any district attorney for violation by a licensee of any of the provisions of this section. The place of business, books of accounts, papers, records, safes and vaults of said licensee shall be open to inspection and examination by the division for the purpose of such investigation and the division shall have authority to examine under oath all persons whose testimony is required relative to said investigation. The cost of the first investigation or examination during any licensing year shall be paid by the licensee, but the cost of additional investigation or examination during such year shall be paid by the licensee only if such examination discloses violation of sub. (5) (a) 4. The division shall determine the cost of an investigation or examination. The licensee shall pay the cost of any hearing including witness fees, unless it be found by the division, board of review or court that licensee has not violated any provision of this section. All said costs shall be paid by the licensee within 30 days after demand therefor by the division. The state may maintain an action for the recovery of such costs and expenses in any court of competent jurisdiction.
218.04(7)(d) (d) To make all necessary or proper orders, rules and regulations for the administration and enforcement of this section.
218.04(8) (8)Hearings and orders. The division shall have the same power to conduct hearings, take testimony and secure evidence as is provided in ss. 217.17, 217.18 and 217.19.
218.04(9g) (9g)Trust accounts.
218.04(9g)(a)(a) In this section, "financial institution" has the meaning given in s. 705.01 (3).
218.04(9g)(b) (b) A licensee shall establish a trust account with a financial institution. The licensee shall notify the division of the name of the financial institution that maintains the trust account. The division may prohibit a licensee from establishing or maintaining a trust account in a financial institution if the division believes that the financial institution is operating in an unsafe or unsound manner.
218.04(9g)(c) (c) Promptly after collection, a licensee shall deposit in the trust account sufficient funds to pay all money due any claimant or forwarder. A licensee may not use the trust account for any other purpose.
218.04(9j) (9j)Consolidation of accounts.
218.04(9j)(a)(a) A licensee may, after receiving authorization from a creditor, consolidate the creditor's account or accounts relating to a particular debtor with those of any other creditor or creditors relating to that debtor and may cause an action to be brought on behalf of the creditor or creditors. All of the following apply to any action caused to be brought by a licensee on behalf of a creditor or creditors under this subsection:
218.04(9j)(a)1. 1. The summons and complaint shall be prepared by an attorney or at the direction of an attorney.
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2011-12 Wisconsin Statutes updated though 2013 Wis. Act 200 and all Supreme Court Orders entered before April 11, 2014. Published and certified under s. 35.18. Changes effective after April 11, 2014 are designated by NOTES. (Published 4-11-14)