Florida Senate - 2010 SB 938 By Senator Bennett 21-00954-10 2010938__ 1 A bill to be entitled 2 An act relating to debt settlement services; creating 3 part V of ch. 817, F.S.; providing a short title; 4 defining terms; providing exemptions from the 5 application of the part; requiring that a person be 6 licensed if he or she provides or offers to provide 7 debt settlement services to a client who resides in 8 this state; providing for a license application and 9 requiring a fee and proof of an insurance policy or 10 surety bond; requiring the fingerprinting and 11 background screening of licensees and certain 12 personnel of the licensees’ businesses; requiring 13 certain persons to pay the costs of fingerprint 14 processing; requiring an applicant or licensee to 15 notify the Office of Financial Regulation of any 16 change of the application information within a 17 specified time; requiring the office to publicize 18 certain information on its website; providing 19 procedures for the approval or denial of initial 20 applications for debt settlement advisor licenses; 21 setting forth grounds for which the office may deny an 22 application; authorizing an administrative proceeding 23 upon denial of an application; requiring an annual 24 license period; providing for expiration of licenses; 25 specifying procedures for renewal of debt settlement 26 advisor licenses; authorizing an administrative 27 proceeding upon denial of a license renewal; 28 authorizing certain licensed activity pending the 29 outcome of an administrative proceeding; requiring 30 debt settlement advisors to act in good faith and 31 provide certain customer services; requiring debt 32 settlement advisors to provide certain documents to 33 prospective clients before signing debt settlement 34 services agreements; authorizing debt settlement 35 advisors to provide certain communications by 36 electronic means in compliance with federal law; 37 specifying requirements for the format and contents of 38 debt settlement services agreements; authorizing 39 clients to cancel such agreements within a specified 40 period; specifying the contents of the cancellation 41 form; requiring debt settlement providers to furnish 42 certain documents in English and provide translations 43 under certain circumstances; limiting the fees that 44 debt settlement advisors may charge; prohibiting debt 45 settlement advisors from soliciting voluntary 46 contributions; authorizing clients to void debt 47 settlement services agreements and recover fees under 48 certain circumstances; authorizing debt settlement 49 advisors to terminate such agreements under certain 50 circumstances; requiring debt settlement advisors to 51 provide clients with reports containing specified 52 information under certain circumstances and keep such 53 records for a specified period; prohibiting debt 54 settlement advisors from engaging in certain acts and 55 practices; prohibiting deceptive advertisements; 56 requiring debt settlement advisors to establish 57 internal complaint processes; specifying the powers of 58 the Office of Financial Regulation to administer the 59 part; authorizing the office to issue subpoenas; 60 requiring licensees to keep certain records for a 61 specified period and submit such records for 62 examination by the office; authorizing the office to 63 impose certain fees and charges; authorizing the 64 Financial Services Commission to adopt rules; 65 providing administrative remedies for violations of 66 the part; authorizing the office to impose fines and 67 civil penalties; authorizing the suspension, 68 revocation, or nonrenewal of debt settlement advisor 69 licenses under certain circumstances; authorizing an 70 administrative proceeding upon the suspension, 71 revocation, or nonrenewal of a license; authorizing 72 civil actions for enforcement of the part; providing 73 for the award of attorney’s fees; declaring that 74 violations of the part are deceptive and unfair trade 75 practices; specifying that the part does not preempt 76 other consumer protection laws; providing time 77 limitations for commencing civil actions; providing 78 for the part’s application in relation to the 79 Electronic Signatures in Global and National Commerce 80 Act; providing for severability; providing an 81 effective date. 82 83 Be It Enacted by the Legislature of the State of Florida: 84 85 Section 1. Part V of chapter 817, Florida Statutes, 86 consisting of sections 817.901, 817.903, 817.905, 817.907, 87 817.909, 817.911, 817.913, 817.915, 817.917, 817.919, 817.921, 88 817.923, 817.925, 817.927, 817.929, 817.931, 817.933, 817.935, 89 817.937, 817.939, 817.941, 817.943, 817.945, 817.947, 817.949, 90 817.951, 817.953, and 817.955, is created to read: 91 PART V 92 DEBT SETTLEMENT SERVICES 93 817.901 Short title.—This part may be cited as the “Debt 94 Settlement Services Act.” 95 817.903 Definitions.—As used in this part, the term: 96 (1) “Agreement” means an agreement between a debt 97 settlement advisor and a client for the performance of debt 98 settlement services. 99 (2) “Bank” means a financial institution, including, but 100 not limited to, a commercial bank, savings bank, savings and 101 loan association, credit union, mortgage bank, or trust company, 102 which is engaged in the business of banking, chartered under 103 federal or state law, and regulated by a federal or state 104 banking regulatory authority. 105 (3) “Client” means a person who enters into an agreement 106 with a debt settlement advisor for debt settlement services. 107 (4) “Commission” means the Financial Services Commission. 108 (5) “Concession” means consent to repay a debt on terms 109 more favorable to a client than the terms of the original 110 contract between the client and his or her creditor. 111 (6) “Control person” means an individual, partnership, 112 corporation, trust, or other organization that possesses the 113 power, directly or indirectly, to direct the management or 114 policies of a debt settlement advisor’s business, whether 115 through ownership of securities, by contract, or otherwise. A 116 person is presumed to control a debt settlement advisor’s 117 business if the person: 118 (a) Is a director, general partner, or officer exercising 119 executive responsibility or having similar status or functions; 120 (b) Directly or indirectly may vote 10 percent or more of a 121 class of voting securities or sell or direct the sale of 10 122 percent or more of a class of voting securities; or 123 (c) In the case of a partnership, may receive upon 124 dissolution or has contributed 10 percent or more of the 125 capital. 126 (7) “Debt settlement advisor” or “licensee” means a person 127 licensed under this part to provide debt settlement services to 128 a client. The term includes an employee or agent of a debt 129 settlement advisor. 130 (8) “Debt settlement services” means services provided by a 131 debt settlement advisor who acts as an intermediary between a 132 client and one or more unsecured creditors of the client for 133 purposes of obtaining favorable concessions for the client. The 134 term does not include the receipt of money from a client with 135 the intent of distributing the money to the client’s creditors. 136 The term also does not include: 137 (a) Legal services provided by an attorney licensed to 138 practice law in this state; 139 (b) Accounting services provided by a certified public 140 accountant licensed to provide accounting services in this 141 state; or 142 (c) Financial planning services provided by a member of a 143 financial planning profession. 144 (9) “Federal act” means the federal Electronic Signatures 145 in Global and National Commerce Act, 15 U.S.C. ss. 7001 et seq., 146 as amended. 147 (10) “Good faith” means honesty in fact and the observance 148 of reasonable standards of fair dealing. 149 (11) “Insolvent” means: 150 (a) Having generally ceased to pay debts in the ordinary 151 course of business other than as a result of a good faith 152 dispute; 153 (b) Being unable to pay debts as they become due; or 154 (c) Being insolvent within the meaning of the federal 155 bankruptcy law, 11 U.S.C. ss. 101 et seq., as amended. 156 (12) “Office” means the Office of Financial Regulation. 157 (13) “Principal amount of a debt” means the amount of debt 158 possessed by the client at the time he or she executes an 159 agreement with a debt settlement advisor and before concessions 160 are made by the client’s creditors. 161 (14) “Program” or “debt settlement program” means a process 162 whereby a debt settlement advisor furnishes a crafted debt 163 settlement plan to a client and negotiates on behalf of the 164 client and, after an agreement, the client makes payments 165 directly to his or her creditors. 166 (15) “Record” means information that is inscribed on a 167 tangible medium or stored in an electronic format or other 168 medium and is retrievable in perceivable form. 169 817.905 Exemptions.—This part does not apply to: 170 (1) A person who provides debt settlement services to a 171 client but does not receive compensation for such services. 172 (2) A judicial officer, a person acting under an order of a 173 court or an administrative agency, or an assignee for the 174 benefit of creditors. 175 (3) A bank or its agent. 176 (4) A title insurer, escrow company, or other entity that 177 provides bill-paying services if the debt settlement services 178 are incidental to the bill-paying services. 179 817.907 Debt settlement advisor license.— 180 (1)(a) A person must be licensed under this part if he or 181 she provides or offers to provide debt settlement services to a 182 client who resides in this state. 183 (b) A person seeking a debt settlement advisor license must 184 apply to the office in the format prescribed by commission rule. 185 An application must include: 186 1. The applicant’s name, principal business address and 187 telephone number, and every e-mail address and Internet website 188 address used by the applicant. 189 2. The name under which the applicant will conduct 190 business. 191 3. The address of each location in this state, other than 192 the applicant’s principal business address, at which the 193 applicant will provide debt settlement services, or a statement 194 that the applicant will provide debt settlement services only at 195 the principal business address. 196 4. If the applicant is a business entity, the name and home 197 address of each officer, director, and other control person of 198 the business entity. 199 5. A statement describing, to the extent it is known or 200 should be known by the applicant, any civil or criminal 201 judgments related to financial fraud or misuse, and any 202 administrative or enforcement actions relating to financial 203 fraud or misuse, by a governmental agency in any jurisdiction 204 against the applicant or an officer, director, owner, or other 205 control person, or an employee or agent, of the applicant’s 206 business. 207 6. A copy of each debt settlement services agreement form 208 that the applicant will use in providing services to clients. 209 7. The schedule of fees and charges that the applicant 210 intends to charge a client for debt settlement services 211 rendered. 212 8. A copy of the financial analysis or budget form that the 213 applicant intends to use for reviewing a client’s financial 214 condition. 215 9. A description of any ownership interest of 10 percent or 216 more by a director, owner, or other control person, or by an 217 employee, of the applicant’s business in: 218 a. Any entity that provides products or services to the 219 applicant or any client of the applicant’s debt settlement 220 services; or 221 b. Another control person of the applicant’s business. 222 10. Evidence that the applicant has a registered agent in 223 this state of record with the Department of State. 224 11. Any other information that the office reasonably 225 requires to perform the duties of the office under s. 817.909. 226 (c) An application must contain a statement informing the 227 applicant that a false or dishonest answer to any question in 228 the application may be grounds for denial or subsequent 229 suspension or revocation of the applicant’s license. 230 (2) An applicant for a debt settlement advisor license must 231 remit to the office a nonrefundable license fee established by 232 commission rule not to exceed $350 and submit proof that: 233 (a) The applicant is covered by a minimum insurance policy 234 in an amount specified by commission rule; or 235 (b) In lieu of an aggregate umbrella insurance policy, the 236 applicant filed a surety bond with the office, in a form 237 approved by commission rule, for a term of not less than the 238 expiration date of the license. The bond must be in an amount of 239 at least $10,000. However, the office may demand that an 240 applicant file a bond of a larger amount if the office 241 determines that the financial condition and business experience 242 of the debt settlement advisor, the history of the debt 243 settlement advisor in performing debt settlement services, and 244 the risk to clients justify a larger surety bond. The office may 245 not require a surety bond greater than $50,000. The surety bond 246 must be in favor of the office for the benefit of any clients in 247 this state who suffer loss arising out of debt settlement 248 services from the debt settlement advisor. 249 (3) Each applicant and control person of the applicant’s 250 business must submit fingerprints in accordance with commission 251 rule. 252 (a) The office may require that fingerprints be submitted 253 to the office or a vendor acting on behalf of the office. 254 (b) A state criminal history background screening must be 255 conducted through the Department of Law Enforcement and a 256 federal criminal history background screening must be conducted 257 through the Federal Bureau of Investigation. The office is 258 responsible for reviewing the results of the state and federal 259 criminal history checks and determining whether the applicant 260 meets licensure requirements. 261 (c) The office may contract with third-party vendors that 262 provide live scan fingerprinting in lieu of a paper fingerprint 263 card. 264 (d) All fingerprints submitted to the Department of Law 265 Enforcement shall be submitted electronically and shall be 266 entered into the statewide automated fingerprint identification 267 system established in s. 943.05(2)(b) and shall be available for 268 use in accordance with s. 943.05(2)(g) and (h). The office shall 269 participate in this process by payment of an annual fee to the 270 Department of Law Enforcement and by informing the Department of 271 Law Enforcement of any person whose fingerprints should no 272 longer be retained. 273 (e) The costs of fingerprint processing, including the 274 costs of retaining fingerprints, shall be borne by the person 275 subject to the background screening. 276 (4) An applicant or licensed debt settlement advisor shall 277 notify the office whenever there is a change of the information 278 specified in this section or s. 817.911 within 30 days after the 279 change. 280 (5) The office shall maintain and publicize on its Internet 281 website the names and addresses of all licensed debt settlement 282 advisors in this state. 283 817.909 Issuance or denial of licenses.— 284 (1) An application is considered received for purposes of 285 s. 120.60 upon receipt of a completed application as prescribed 286 by commission rule, the nonrefundable license fee established 287 pursuant to s. 817.907(2), and any other fee prescribed by law. 288 (2) The office shall issue an initial license to a debt 289 settlement advisor who complies with s. 817.907. The office may 290 deny an application for an initial debt settlement advisor 291 license if: 292 (a) The application contains information that is materially 293 erroneous or incomplete; 294 (b) An officer, director, owner, or other control person of 295 the applicant’s business has been convicted of a crime or has 296 had a civil judgment entered against him or her involving 297 dishonesty or the violation of state or federal securities laws; 298 (c) The application is not accompanied by the required fees 299 established by the office; or 300 (d) There is reasonable evidence that the applicant will 301 not operate as a debt settlement advisor in a lawful, honest, 302 and fair manner. 303 (3) Upon denial of an initial application for a debt 304 settlement advisor license, the applicant may request an 305 administrative proceeding on the denial pursuant to chapter 120. 306 (4) The commission shall establish by rule an annual 307 license period. A debt settlement advisor license expires at the 308 end of the license period for which the license is issued. 309 817.911 License renewal.— 310 (1) A debt settlement advisor must annually renew his or 311 her license to provide debt settlement services. 312 (2) A person seeking licensure as a debt settlement advisor 313 must apply to the office in the format prescribed by commission 314 rule. A renewal application must: 315 (a) Be filed at least 30 days, but no more than 60 days, 316 before the current license expires. 317 (b) Be accompanied by a nonrefundable renewal fee 318 established by commission rule not to exceed the initial license 319 fee established pursuant to s. 817.907(2) and the annual costs 320 of fingerprint processing pursuant to s. 817.907(3)(d) and (e). 321 (c) Disclose any changes in the information contained in 322 the applicant’s initial application for a license or in its 323 immediately previous license renewal application, as 324 appropriate. 325 (d) Provide any other information that the office 326 reasonably requires to perform its duties under this section. 327 (3) The office shall renew the license of a debt settlement 328 advisor who complies with this section. The office may deny a 329 renewal application for any reason authorized in s. 817.909(2) 330 for denial of an initial application. 331 (4) If a debt settlement advisor timely files a complete 332 application for renewal of his or her license, the license 333 remains in effect until the office notifies the applicant, in 334 writing, whether the application is approved or denied. If the 335 office denies a renewal application, the written notice to the 336 debt settlement advisor must describe the reasons for the 337 denial. 338 (5)(a) Upon denial of an application to renew a debt 339 settlement advisor license, the licensee may request an 340 administrative proceeding on the denial pursuant to chapter 120. 341 (b) If the office denies a renewal application and the 342 applicant requests an administrative proceeding under chapter 343 120, the debt settlement advisor may continue to provide debt 344 settlement services to a client with whom the advisor has an 345 agreement. If the denial of the license is affirmed, the debt 346 settlement advisor must discontinue providing debt settlement 347 services to clients and transfer the clients’ agreements to 348 other licensed debt settlement advisors. 349 817.913 Requirement of good faith.—A debt settlement 350 advisor must act in good faith in all matters under this part. 351 817.915 Customer service.—A debt settlement advisor shall 352 maintain a toll-free telephone service, staffed at a level that 353 reasonably permits a client to speak to a customer service 354 representative during ordinary business hours. 355 817.917 Prerequisites for providing debt settlement 356 services.— 357 (1) Before a debt settlement advisor may provide debt 358 settlement services to a potential client, the debt settlement 359 advisor must give the potential client an itemized list of goods 360 and services available from the debt settlement advisor and the 361 charges for each service rendered. The list and charges must be 362 clear and conspicuous. 363 (2) A debt settlement advisor may not furnish debt 364 settlement services unless he or she prepares a financial 365 analysis for the potential client. 366 (3) Before signing an agreement with a potential client, a 367 debt settlement advisor must: 368 (a) Provide the potential client with a copy of the 369 financial analysis and a written notice that identifies the debt 370 settlement advisor and acknowledges that a potential client may 371 keep the financial analysis even if he or she chooses not to 372 become a client of the debt settlement advisor. 373 (b) Inform the potential client of the availability, at his 374 or her option, of assistance by a toll-free telephone service or 375 in person to discuss the financial analysis required in 376 subsection (2). 377 (c) Inform the potential client that: 378 1. Not all debt settlement programs are suitable for all 379 clients. 380 2. Participation in a debt settlement program may adversely 381 affect a client’s credit rating or credit scores. 382 3. Nonpayment of debt may lead creditors to increase 383 finance and other charges or undertake collection activity, 384 including litigation. 385 4. Unless a client is insolvent and a creditor settles for 386 less than the full amount of the debt, participation in the 387 program may result in the creation of taxable income to the 388 client, even though the client does not receive any money. 389 5. Specific results cannot be predicted or guaranteed and 390 the debt settlement advisor cannot force negotiations or 391 settlements with creditors who do not wish to participate in 392 negotiations, but will nevertheless advocate on behalf of the 393 client. 394 6. The debt settlement program requires that a client meet 395 a certain savings goal in order to maximize settlement results. 396 7. The debt settlement advisor may provide accounting or 397 legal advice to a client only if the debt settlement advisor is 398 licensed to practice law in this state. 399 8. The debt settlement advisor is a client’s advocate and 400 may not receive compensation from creditors, banks, or third 401 party collection agencies. 402 9. The debt settlement advisor may not make monthly 403 payments to a client’s creditors. 404 817.919 Communication by electronic or other means.— 405 (1) A debt settlement advisor may satisfy the requirements 406 of s. 817.917, s. 817.923, or s. 817.935 through the Internet or 407 other electronic means if the debt settlement advisor obtains 408 the client’s consent in the manner provided by s. 101(c)(1) of 409 the federal act. 410 (2) The disclosures and materials required by ss. 817.917, 411 817.923, and 817.935 shall be presented in a format that can be 412 accurately reproduced for later reference. 413 (3) For disclosure through an Internet website, disclosure 414 of the information required by s. 817.917 must appear on one or 415 more screens that contain only the information required, and the 416 client must be able to see the information on the screens before 417 agreeing to participate in the program. 418 (4) At the time of providing the materials or agreement 419 required in s. 817.917, s. 817.923, or s. 817.935, a debt 420 settlement advisor shall inform the client that upon electronic, 421 telephonic, or written request, the advisor shall send the 422 client a written copy of the materials and shall comply with a 423 request as provided in subsection (7). 424 (5) If a debt settlement advisor is requested, within 90 425 days after a program is completed or terminated, to send a 426 written copy of the materials required by s. 817.917, s. 427 817.923, or s. 817.935, the debt settlement advisor shall send 428 the materials at no charge within 3 business days after receipt 429 of the request. However, the debt settlement advisor need not 430 comply with a request more than once per calendar month or 431 comply with a request that the advisor reasonably believes is 432 made for purposes of harassment. If a request is made more than 433 90 days after a program is completed or terminated, the debt 434 settlement advisor shall send a written copy of the materials 435 requested within 30 days. 436 (6) If a debt settlement advisor maintains an Internet 437 website, the debt settlement advisor shall disclose on the home 438 page of the website or on a page that is clearly and 439 conspicuously connected to the home page by a link that clearly 440 reveals its contents: 441 (a) The name or names under which the debt settlement 442 advisor does business. 443 (b) The principal business address, telephone number, and 444 e-mail address, if any. 445 (7) If a client who previously consents to electronic 446 communication in the manner provided by s. 101(c)(1) of the 447 federal act withdraws the consent as provided in the federal 448 act, a debt settlement advisor may terminate the agreement with 449 the client. If the debt settlement advisor wishes to terminate 450 the agreement, he or she shall notify the client and, unless the 451 client consents to electronic communication in the manner 452 provided in s. 101(c)(1) of the federal act within 30 days after 453 receiving the notice, the agreement is terminated. 454 817.921 Form and contents of a debt settlement services 455 agreement.— 456 (1) A debt settlement services agreement must be in 457 writing, dated and signed by the client and the debt settlement 458 advisor, and delivered to the client immediately upon signing 459 the agreement. The agreement must include: 460 (a) The name and home address of the client. 461 (b) The name, business address, and telephone number of the 462 debt settlement advisor. 463 (c) The debt settlement services to be provided. 464 (d) The amount, or method of determining the amount, of all 465 fees, individually itemized, to be paid by the client. 466 (e) The process by which the debt settlement advisor will 467 comply with his or her obligations under s. 817.935. 468 (f) A statement that the client may cancel the agreement as 469 provided in s. 817.923. 470 (g) A disclosure that the client may contact the office 471 with any questions or complaints regarding the debt settlement 472 advisor. 473 (h) The address, telephone number, and Internet address or 474 website of the office. 475 (2) For the purposes of subsection (1), delivery of an 476 electronic record occurs when it is made available in a format 477 that the client may retrieve, save, and print, and when the 478 client is notified that the record is available. 479 (3) If the office supplies the debt settlement advisor with 480 any information required under paragraph (1)(h), the debt 481 settlement advisor may comply with paragraph (1)(h) by 482 disclosing the information supplied by the office. 483 (4) An agreement must state that the client has a right to 484 terminate the agreement at any time by giving the debt 485 settlement advisor written or electronic notice, in which event 486 all powers of attorney granted by the client to the debt 487 settlement advisor are revoked and void. 488 (5) An agreement may confer on a debt settlement advisor a 489 power of attorney to settle a client’s debt for no more than 50 490 percent of the outstanding amount of the debt and may confer a 491 power of attorney to negotiate with the client’s creditors on 492 behalf of the client. The debt settlement advisor must obtain 493 the consent of the client before accepting a concession 494 settlement of more than 50 percent of the outstanding amount of 495 the debt. 496 (6) A debt settlement services agreement may not: 497 (a) Apply to the agreement any law of any jurisdiction 498 other than the United States and this state. 499 (b) Except as permitted by the Federal Arbitration Act, 9 500 U.S.C. s. 2, as amended, or the Florida Arbitration Code in 501 chapter 682, contain any modifications or limitations to 502 otherwise available forums or procedural rights, including the 503 right to trial by jury, which are generally available to the 504 client under law and under this part; 505 (c) Contain restrictions on a client’s remedies under this 506 part or any other law. 507 (d) Contain any provision that: 508 1. Limits or releases the liability of any person for not 509 performing the agreement or for violating this part. 510 2. Indemnifies any person for liability arising under the 511 agreement or this part. 512 817.923 Cancellation of an agreement; waiver.— 513 (1) A client may cancel an agreement before midnight of the 514 3rd business day after the client executes the agreement. 515 However, if a debt settlement services agreement does not comply 516 with subsection (2), s. 817.921, or s. 817.937, the client may 517 cancel the agreement within 30 days after the client executes 518 the agreement. To exercise the right of cancellation, the client 519 must give notice in a record to the debt settlement advisor. 520 Notice by mail is given when mailed. 521 (2) An agreement must be accompanied by a form that 522 contains a notice of right of cancellation heading in bold-faced 523 type underlined by bold black lines. The notice must be in 524 substantially the following form: 525 526 NOTICE OF RIGHT OF CANCELLATION 527 528 You may cancel this agreement, without any penalty or 529 obligation, at any time before midnight of the 3rd 530 business day after the day you sign the agreement or 531 otherwise agree to it by electronic communication. 532 533 To cancel this agreement during this period, send an 534 e-mail to ...(e-mail address of debt settlement 535 advisor)... or mail or deliver a signed, dated copy of 536 this notice, or any other written notice to ...(name 537 of debt settlement advisor)... at ...(address of debt 538 settlement advisor)... before midnight of the 3rd 539 business day after you executed the agreement. 540 541 If you cancel this agreement within the 3-day period, 542 we will refund all money you have already paid us. 543 544 I cancel this agreement. 545 546 ................ 547 Print your name 548 ................ 549 Signature 550 ................ 551 Date 552 553 817.925 Required language; rules.—Unless provided otherwise 554 by commission rule, the disclosures and documents required by 555 this part must be in English. If a debt settlement advisor 556 communicates with a client primarily in a language other than 557 English, the debt settlement advisor must furnish a translation 558 of the disclosures and documents required by this part. 559 817.927 Fees and other charges.— 560 (1) A debt settlement advisor may not impose, directly or 561 indirectly, a fee or other charge on a client or receive money 562 from or on behalf of a client for debt settlement services 563 except as permitted by this section. 564 (2) The total aggregate fees charged by a debt settlement 565 advisor may not exceed 20 percent of the principal amount of the 566 debt. 567 (3) In addition to the fees authorized in subsection (2), 568 if a client’s payment to a debt settlement advisor is not 569 honored, the debt settlement advisor may impose a service fee 570 not to exceed the service fees authorized under s. 832.08(5) or 571 5 percent of the face amount of the check, draft, or order, 572 whichever is greater, for collection of the dishonored check, 573 draft, or other order for the payment of money. 574 (4) A debt settlement advisor may not impose charges or 575 receive payment for debt settlement services until the debt 576 settlement advisor and the client sign a debt settlement 577 services agreement. 578 817.929 Voluntary contributions.—A debt settlement advisor 579 may not solicit a voluntary contribution from a client for any 580 debt settlement services provided to the client. 581 817.931 Voidable agreements.— 582 (1) If a debt settlement advisor imposes a fee or other 583 charge or receives money or other payments not authorized by s. 584 817.927, the client may void the agreement and recover the fees 585 or charges as provided in s. 817.949. 586 (2) If a debt settlement advisor is not licensed under this 587 part at the time a client approves the debt settlement services 588 agreement, the agreement is voidable by the client. 589 (3) If a client voids an agreement pursuant to this 590 section, the debt settlement advisor does not have a claim 591 against the client for breach of contract or for restitution. 592 817.933 Termination of agreements.—If a client fails to 593 make payments required by the agreement for 60 days, a debt 594 settlement advisor may terminate the agreement. 595 817.935 Periodic reports; retention of records.— 596 (1) A debt settlement advisor shall provide the accounting 597 required by subsection (2) in the following cases: 598 (a) After each settlement of a debt with a creditor on 599 behalf of a client. 600 (b) Within 5 business days after receiving a request by a 601 client. However, the debt settlement advisor need not comply 602 with more than one request from the client in any calendar 603 month. 604 (c) Upon cancelling or terminating an agreement. 605 (2) If a creditor agrees to accept as payment in full an 606 amount less than the principal amount of the debt owed by the 607 client, the debt settlement advisor shall document, in a record, 608 an accounting of all of the following: 609 (a) The amount of the client’s debt when the creditor 610 agrees to a settlement. 611 (b) The amount of the debt that the creditor accepts as 612 settlement in full. 613 (c) Any other terms of the settlement. 614 (d) For a debt settlement advisor who uses a fee agreement 615 that calculates any portion of the fee based on a percentage of 616 savings that the client realizes from a settled debt, the 617 calculation of the fee. 618 (3) A debt settlement advisor must maintain records for 619 each client for whom the advisor provides debt settlement 620 services for 4 years after the most recent date that the advisor 621 received payment from the client. The debt settlement advisor 622 shall produce a copy of the records for the client within a 623 reasonable time after a request is received. The debt settlement 624 advisor may use electronic or other means for storing records. 625 817.937 Prohibited acts and practices of debt settlement 626 advisors.— 627 (1) A debt settlement advisor may not engage in any of the 628 following practices: 629 (a) Settle a debt on behalf of a client for more than 50 630 percent of the amount of the debt owed to a creditor, unless the 631 client explicitly consents to the settlement after the creditor 632 agrees to the settlement. 633 (b) Hold a power of attorney that authorizes a debt 634 settlement advisor to settle a debt, unless the power of 635 attorney expressly limits the debt settlement advisor’s 636 authority to settle debts for not more than 50 percent of the 637 amount of the debt owed to a creditor. 638 (c) Exercise or attempt to exercise a power of attorney 639 after a client terminates an agreement. 640 (d) Initiate a transfer from a client’s bank account to 641 another person unless the transfer is: 642 1. A return of money to the client; 643 2. Before termination of an agreement, payment of a fee 644 properly authorized by the agreement and this part; 645 3. A payment to a creditor to fund a negotiated settlement 646 authorized by this part; or 647 4. A payment to a creditor to fund a negotiated settlement 648 of which both the settlement and transfer of money are 649 authorized by the client. 650 (e) Structure a settlement that results in a negative 651 amortization of any of the client’s debts. 652 (f) Settle a debt or lead a client to believe that a 653 payment to a creditor is in settlement of a debt to the creditor 654 unless, at the time of settlement, the client receives a 655 certification or confirmation by the creditor that the payment 656 is in full settlement of the debt or is part of a payment plan 657 that is in full settlement of the debt. 658 (g) Make a representation that: 659 1. The debt settlement advisor will furnish money to pay 660 bills or prevent attachments; 661 2. Payment of a certain amount of money guarantees 662 satisfaction of a certain amount or range of indebtedness; 663 3. Participation in a program may prevent litigation, 664 garnishment, attachment, repossession, foreclosure, eviction, or 665 loss of employment; 666 4. The debt settlement advisor is authorized or competent 667 to furnish legal advice or perform legal services, unless such 668 advice or services are provided by a licensed attorney working 669 with the debt settlement advisor; or 670 5. The debt settlement advisor is a not-for-profit entity, 671 unless the debt settlement advisor is organized and properly 672 operating as a corporation not for profit under chapter 617. 673 (h) Employ deceptive and unfair trade practices, including 674 the knowing omission of any material information. 675 (2) If a debt settlement advisor furnishes debt settlement 676 services to a client, the debt settlement advisor may not, 677 directly or indirectly, engage in any of the following 678 practices: 679 (a) Purchase a debt or obligation of the client. 680 (b) Receive from or on behalf of the client: 681 1. A promissory note or other negotiable instrument other 682 than a check or a demand draft; or 683 2. A postdated check or demand draft. 684 (c) Lend money or provide credit to the client, except as a 685 deferral of a fee payment at no additional expense to the 686 client. 687 (d) Obtain a mortgage or other security interest from any 688 person in connection with the services provided to the client. 689 (e) Except as permitted by federal law, disclose the 690 identity or identifying information of the client or the 691 identity of the client’s creditors, except to: 692 1. The office, upon proper demand; 693 2. A creditor of the client, to the extent necessary to 694 secure the cooperation of the creditor in a debt settlement 695 program; or 696 3. The extent necessary to administer the debt settlement 697 program. 698 (f) Except as otherwise provided in s. 817.927, provide the 699 client less than the full benefit of a compromise of a debt 700 arranged by the debt settlement advisor. 701 (g) Furnish legal advice or perform legal services, unless 702 the person furnishing the advice to, or performing the services 703 for, the client is licensed to practice law. 704 (h) Advise clients to stop payment on any of the accounts 705 being handled by the debt settlement advisor. 706 817.939 Advertising.—A debt settlement advisor that 707 advertises debt settlement services may not make statements that 708 are misleading or deceptive, and the advertisements may not 709 conflict with the information specified in s. 817.917. 710 817.941 Internal complaint policy.—Each debt settlement 711 advisor shall establish a formal internal complaint policy that 712 creates a process for the debt settlement advisor to receive, 713 review, and address or resolve formal complaints internally. The 714 availability of this process shall be communicated in writing to 715 clients enrolled in the debt settlement advisor’s debt 716 settlement program. This policy must include a provision that 717 all clients who file a formal complaint will receive a response 718 from the debt settlement advisor within 30 days after the debt 719 settlement advisor’s receipt of the complaint. The debt 720 settlement advisor shall maintain a file that documents each 721 formal complaint and the handling and resolution of each 722 complaint, and the debt settlement advisor shall disclose the 723 file to the office upon request. 724 817.943 Powers of administration; rules.— 725 (1) The office may act on its own initiative or in response 726 to a complaint. The office may seek voluntary compliance with 727 this part or initiate enforcement actions as provided in this 728 part. 729 (2) The office may investigate and examine, by subpoena or 730 otherwise, the activities, books, accounts, and records of a 731 debt settlement advisor or any person to whom a debt settlement 732 advisor delegates his or her obligations under an agreement or 733 this part, in order to determine compliance with this part. 734 (3) Each licensee and control person of the licensee’s 735 business must maintain all books, accounts, documents, files, 736 and information necessary for determining compliance with this 737 part and commission rules adopted under this part for 5 years. 738 (a) The records required under this part may be maintained 739 by the licensee at any location identified in its license 740 application or by amendment to the application. The licensee 741 must make such records available to the office for examination 742 and investigation in this state within 10 days after receipt of 743 a written request. 744 (b) The original of any record of a licensee includes a 745 record stored or transmitted by electronic, computerized, 746 mechanized, or other information storage or retrieval or 747 transmission system or device that can generate, regenerate, or 748 transmit the precise data or other information comprising the 749 record. An original also includes the visible data or other 750 information so generated, regenerated, or transmitted if it is 751 legible or can be made legible by enlargement or other process. 752 (4) In support of its enforcement powers, the office may: 753 (a) Charge the debt settlement advisor the reasonable 754 expenses necessarily incurred to conduct the examination. 755 (b) Require or permit the debt settlement advisor to file a 756 statement under oath as to all the facts and circumstances of 757 the matter to be investigated. 758 (c) Enter into a cooperative arrangement with any federal 759 or state agency having authority over debt settlement advisors 760 and exchange with any of those agencies information about a debt 761 settlement advisor, including information obtained during an 762 examination of the debt settlement advisor. 763 (d) Establish reasonable fees to be paid by a debt 764 settlement advisor for the expense of administering this 765 section. 766 (5) The commission may adopt rules to administer this part. 767 817.945 Administrative remedies.— 768 (1) The office may enforce this part by: 769 (a) Ordering a debt settlement advisor, director, officer, 770 or other control person of the debt settlement advisor’s 771 business, or an agent thereof, to cease and desist from any 772 violations of this part. 773 (b) Ordering a debt settlement advisor who violates this 774 part to correct the violation, including making restitution to 775 the person aggrieved by the violation. 776 (c) Imposing on a debt settlement advisor a civil penalty 777 not to exceed $1,000 per violation. 778 (d) Intervening in an action brought under s. 817.949. 779 (e) Initiating an enforcement action in circuit court to 780 enforce an order or to obtain restitution, an injunction, or 781 another equitable relief. 782 (2) The office may impose a fine not to exceed $1,000 per 783 day for each day that a person engages in debt settlement 784 services without a license. 785 (3) If a person knowingly and willfully violates, or 786 authorizes, directs, or aids another to violate, a final order 787 issued under subsection (1), the office may impose an additional 788 civil penalty not to exceed $1,000 per violation. 789 (4) The office may recover the reasonable costs of 790 enforcing this part, including reasonable attorney’s fees. 791 (5) In determining the amount of a civil penalty to be 792 imposed under subsection (1) or subsection (2), the office shall 793 consider the seriousness of the violation, the good faith of the 794 violator, any previous violations by the violator, the 795 deleterious effect of the violation on the public, and any other 796 fact relevant to the determination of the civil penalty. 797 817.947 Suspension, revocation, or nonrenewal of license.— 798 (1) The office may suspend, revoke, or deny the renewal of 799 a debt settlement advisor license if: 800 (a) A fact or condition exists that, if it existed when the 801 debt settlement advisor applied for a debt settlement advisor 802 license, the fact or condition would be a reason for denying the 803 license. 804 (b) The debt settlement advisor commits a material 805 violation of this part, a commission rule adopted under this 806 part, or an order of the office issued under this part. 807 (c) The debt settlement advisor is insolvent. 808 (d) The debt settlement advisor or a control person of the 809 debt settlement advisor’s business refuses to permit the office 810 to make an examination authorized by this part, failed to comply 811 with s. 817.943(4)(b) within 30 days after request, or made a 812 material misrepresentation or omission in complying with s. 813 817.943(4)(b). 814 (e) The debt settlement advisor does not respond within a 815 reasonable time or in an appropriate manner to communications 816 from the office. 817 (2) A licensee must maintain the insurance coverage or bond 818 at all times in the amount required under s. 817.907(2). If the 819 office determines that the insurance coverage is insecure, 820 deficient in amount, or exhausted in whole or in part, the 821 office may suspend the licensee’s debt settlement advisor 822 license, unless or until the licensee presents satisfactory 823 evidence to the office that the coverage or bond is replaced. 824 (3) Upon the suspension, revocation, or nonrenewal of a 825 debt settlement advisor license, the licensee may request an 826 administrative proceeding on the suspension, revocation, or 827 nonrenewal pursuant to chapter 120. 828 817.949 Private enforcement.— 829 (1) If a client voids an agreement pursuant to s. 817.931, 830 the client may recover in a civil action all money paid by or on 831 behalf of the client pursuant to the agreement, in addition to 832 the recovery of reasonable attorney’s fees and costs. 833 (2) A client for whom a debt settlement advisor violates 834 this part may recover in a civil action from the debt settlement 835 advisor and any person that caused the violation: 836 (a) Compensatory damages for economic injury caused by the 837 violation. 838 (b) Except as otherwise provided in subsection (3), the 839 amount recoverable under subsection (1) or $1,000, whichever is 840 greater. 841 (c) Reasonable attorney’s fees and costs. 842 (3) In addition to the remedy available under subsection 843 (2), if a debt settlement advisor violates a client’s rights 844 under s. 817.927, the client may recover in a civil action all 845 money paid by or on behalf of the client pursuant to the 846 agreement, except for the amounts paid to the creditors. 847 (4) A debt settlement advisor is not liable for violating 848 this part if he or she proves that the violation was not 849 intentional and resulted from a good faith error notwithstanding 850 the maintenance of procedures reasonably adapted to avoid the 851 error. If, in connection with a violation, the debt settlement 852 advisor receives more money than authorized by an agreement or 853 this part, the defense provided by this subsection is not 854 available unless the debt settlement advisor refunds the excess 855 money within 3 business days after learning of the violation. 856 817.951 Deceptive and unfair trade practices; effect on 857 other remedies.— 858 (1) A violation of this part is a deceptive and unfair 859 trade practice and constitutes a violation of part II of chapter 860 501. 861 (2) This part is supplemental to, and makes no attempt to 862 preempt, other consumer protection laws that are not 863 inconsistent with this part. 864 817.953 Statute of limitations.— 865 (1) Any enforcement action must be commenced within 4 years 866 after the violation occurs. 867 (2) Any private enforcement action must be commenced within 868 2 years after the latest of: 869 (a) The client’s last transmission of money to the debt 870 settlement advisor; 871 (b) The date on which the client discovered or reasonably 872 should have discovered the facts upon which the client’s claim 873 is based; or 874 (c) Termination of actions or proceedings by the office for 875 a violation of this part. 876 (3) Any limitation period prescribed in this section is 877 tolled during any period in which the debt settlement advisor 878 materially and willfully misrepresents information required to 879 be disclosed to the client or the office by this part. 880 817.955 Relation to the Electronic Signatures in Global and 881 National Commerce Act.—This part modifies, limits, and 882 supersedes the federal Electronic Signatures in Global and 883 National Commerce Act, 15 U.S.C. ss. 7001 et seq., but does not 884 modify, limit, or supersede s. 101(c) of the act, 15 U.S.C. s. 885 7001(c), or authorize electronic delivery of any of the notices 886 described in s. 103(b) of the act, 15 U.S.C. s. 7003(b). 887 Section 2. If any provision of this act or the application 888 thereof to any person or circumstance is held invalid, the 889 invalidity does not affect other provisions or applications of 890 the act which can be given effect without the invalid provision 891 or application, and to this end the provisions of this act are 892 declared severable. 893 Section 3. This act shall take effect July 1, 2010.