Bill Text: FL S1702 | 2010 | Regular Session | Comm Sub

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Bill Title: Debt Relief Services Act [CPSC]

Spectrum: Unknown

Status: (Failed) 2010-04-30 - Died in Committee on Judiciary [S1702 Detail]

Download: Florida-2010-S1702-Comm_Sub.html

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Florida Senate - 2010                             CS for SB 1702 
 
By the Committees on Banking and Insurance; and Banking and 
Insurance 
597-03112B-10                                         20101702c1 
1                        A bill to be entitled 
2         An act relating to debt relief services; providing a 
3         directive to the Division of Statutory Revision; 
4         creating s. 559.101, F.S.; providing a short title; 
5         transferring, renumbering, reordering, and amending s. 
6         817.801, F.S.; revising definitions relating to debt 
7         relief services; creating s. 559.103, F.S.; providing 
8         the powers of the Office of Financial Regulation; 
9         creating s. 559.104, F.S.; authorizing the Financial 
10         Services Commission to adopt rules; transferring, 
11         renumbering, and amending s. 817.803, F.S.; revising 
12         provisions relating to who is not subject to the Debt 
13         Relief Services Act; providing an exception for 
14         attorneys representing clients; creating s. 559.106, 
15         F.S.; requiring debt relief organizations to be 
16         registered with the office; providing a registration 
17         fee; requiring background screening of applicants and 
18         control persons; providing grounds for registration 
19         issuance or denial; requiring annual renewal; creating 
20         s. 559.107, F.S.; requiring registration renewal; 
21         transferring, renumbering, and amending s. 817.804, 
22         F.S.; requiring a debt relief organization to obtain a 
23         surety bond and to provide proof of such bond to the 
24         office; creating s. 559.109, F.S.; requiring a debt 
25         relief organization to maintain records; creating s. 
26         559.111, F.S.; requiring a debt relief organization to 
27         prepare a financial analysis for the debtor; providing 
28         for service contracts; requiring certain provisions to 
29         be included in such contracts; requiring the debt 
30         relief organization to provide the debtor with copies 
31         of all signed documents; transferring, renumbering, 
32         and amending s. 817.805, F.S.; conforming terms to 
33         changes made by the act; transferring, renumbering, 
34         and amending s. 817.802, F.S.; prohibiting a debt 
35         relief organization from engaging in certain 
36         additional specified acts; deleting a provision that 
37         allows the organization to collect a fee for 
38         insufficient fund transactions; creating s. 559.114, 
39         F.S.; providing for debtor complaints to the office; 
40         providing procedures and office duties; creating s. 
41         559.115, F.S.; providing for the issuance of subpoenas 
42         by the office; creating s. 559.116, F.S.; authorizing 
43         the office to issue cease and desist orders; 
44         transferring, renumbering, and amending s. 817.806, 
45         F.S.; conforming terms to changes made by the act; 
46         providing administrative penalties; specifying 
47         violations that result in criminal penalties; 
48         repealing 559.10, 559.11, 559.12, and 559.13, F.S., 
49         relating to obsolete provisions concerning budget 
50         planning; amending s. 516.07, F.S.; conforming a 
51         cross-reference; providing an effective date. 
52 
53  Be It Enacted by the Legislature of the State of Florida: 
54 
55         Section 1. The Division of Statutory Revision is requested 
56  to rename part II of chapter 559, Florida Statutes, consisting 
57  of ss. 559.101-559.117, as “Debt Relief Services.” 
58         Section 2. Section 559.101, Florida Statutes, is created to 
59  read: 
60         559.101 Short title.—This part may be cited as the “Debt 
61  Relief Services Act.” 
62         Section 3. Section 817.801, Florida Statutes, is 
63  transferred, renumbered as 559.102, Florida Statutes, reordered, 
64  and amended to read: 
65         559.102 817.801 Definitions.—As used in this part: 
66         (1) “Commission” means the Financial Services Commission. 
67         (2) “Control person” means an individual, partnership, 
68  corporation, trust, or other organization that possesses the 
69  power, directly or indirectly, to direct the management or 
70  policies of a company, whether through ownership of securities, 
71  by contract, or otherwise. The term includes, but is not limited 
72  to: 
73         (a) A company’s executive officers, including the 
74  president, chief executive officer, chief financial officer, 
75  chief operations officer, chief legal officer, chief compliance 
76  officer, director, or other individuals having similar status or 
77  functions. 
78         (b) For a corporation, each shareholder who, directly or 
79  indirectly, owns 10 percent or more, or who has the power to 
80  vote 10 percent or more, of a class of voting securities, unless 
81  the applicant is a publicly traded company. 
82         (c) For a partnership, all general partners and limited or 
83  special partners who have contributed 10 percent or more, or who 
84  have the right to receive upon dissolution 10 percent or more, 
85  of the partnership’s capital. 
86         (d) For a trust, each trustee. 
87         (e) For a limited liability company, all managing members 
88  and those members who have contributed 10 percent or more, or 
89  who have the right to receive upon dissolution 10 percent or 
90  more, of the partnership’s capital. 
91         (6)(1) “Debt relief organization Credit counseling agency” 
92  means a person offering to provide or any organization providing 
93  debt management services, debt settlement services, or credit 
94  counseling services for compensation. 
95         (3)(2) “Credit counseling services” means confidential 
96  money management, debt reduction, financial analysis, and 
97  financial educational services provided to a debtor. The term 
98  does not include foreclosure-related rescue services. 
99         (4)(3) “Creditor contribution” means any sum that a 
100  creditor agrees to contribute to a debt relief organization 
101  credit counseling agency, whether directly or by setoff against 
102  amounts otherwise payable to the creditor on behalf of debtors. 
103         (5)(4) “Debt management services” means services, other 
104  than foreclosure-related rescue services, provided to a debtor 
105  by a debt relief credit counseling organization for a fee to: 
106         (a) Effect the adjustment, compromise, interest rate 
107  reduction, modification of terms, negotiation, or discharge of 
108  any unsecured account, note, or other indebtedness of the 
109  debtor; or 
110         (b) Receive funds periodically from the debtor and disburse 
111  to a creditor any money or other thing of value with the 
112  expectation that the debtor will repay the creditor the entire 
113  principal owed. 
114         (7) “Debt settlement services” means services, other than 
115  foreclosure-related rescue services, provided to a debtor with 
116  the expectation of obtaining the creditor’s agreement to accept 
117  less than the principal amount of a debt in full satisfaction of 
118  the debt. 
119         (8) “Debtor” means an individual who obtains credit, seeks 
120  a credit agreement with a creditor, or owes money to a creditor. 
121         (9)� “Enrolled debt” means the amount of debt at the time 
122  the contract for debt management services is entered but does 
123  not include any increases in the amount of debt or additional 
124  fees or penalties applied to the debt after services included in 
125  the contract are initiated. 
126         (10)� “Financial analysis” means the review of an 
127  individual’s budget, income, expenses, and debt by the debt 
128  relief organization in order to determine the individual’s 
129  suitability for additional credit counseling, debt management, 
130  or debt settlement services provided by the organization. 
131         (11) “Financial audit report” means a report prepared in 
132  connection with a financial audit that is conducted in 
133  accordance with generally accepted auditing standards, 
134  prescribed by the American Institute of Certified Public 
135  Accountants, by a certified public accountant licensed to do 
136  business in the United States, which includes: 
137         (a) Financial statements, including notes related to the 
138  financial statements and required supplementary information, 
139  prepared in conformity with United States generally accepted 
140  accounting principles. 
141         (b) An expression of opinion regarding whether the 
142  financial statements are presented in conformity with United 
143  States generally accepted accounting principles, or an assertion 
144  that such an opinion cannot be expressed and the reasons. 
145         (12) “Office” means the Office of Financial Regulation of 
146  the Financial Services Commission. 
147         (13)(5) “Person” has the same meaning as in s. 1.01 means 
148  any individual, corporation, partnership, trust, association, or 
149  other legal entity. 
150         (14) “Service contract” means the agreement for services 
151  between a debt relief organization and a debtor. 
152         Section 4. Section 559.103, Florida Statutes, is created to 
153  read: 
154         559.103 Powers and duties of the Office of Financial 
155  Regulation; fees.— 
156         (1) The office is responsible for the administration and 
157  enforcement of this part. 
158         (2) The office may conduct an investigation of any person 
159  if the office has reason to believe, upon complaint or 
160  otherwise, that any violation of this part may have been 
161  committed or is about to be committed. 
162         (3) All fees, charges, and fines collected pursuant to this 
163  part shall be deposited in the State Treasury to the credit of 
164  the Regulatory Trust Fund under the office. 
165         Section 5. Section 559.104, Florida Statutes, is created to 
166  read: 
167         559.104 Rules.—The commission may adopt rules to administer 
168  this part, including rules that: 
169         (1) Require electronic submission of any forms, documents, 
170  or fees required under this part. 
171         (2) Establish time periods during which an applicant for 
172  registration is barred from registration or a registered debt 
173  relief organization is barred from renewal due to prior criminal 
174  convictions of, or guilty or nolo contendere pleas by, any of 
175  the applicant’s or registrant’s control persons, regardless of 
176  adjudication. 
177         (a) The rules must provide: 
178         1. Permanent bars for felonies involving money laundering, 
179  breach of trust, dishonesty, embezzlement, fraud, fraudulent 
180  conversion, misappropriation of property, racketeering, or 
181  theft; 
182         2. A 15-year disqualifying period for felonies involving 
183  moral turpitude; 
184         3. A 7-year disqualifying period for all other felonies; 
185  and 
186         4. A 5-year disqualifying period for misdemeanors involving 
187  fraud, dishonesty, or any other act of moral 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 crimes 
193  identified in subparagraph (a)2. However, the mitigation may not 
194  result in a period of disqualification less than 7 years. The 
195  rule may not mitigate the disqualifying periods in subparagraphs 
196  (a)1., (a)3., and (a)4. 
197         (d) An applicant is not eligible for registration until the 
198  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 to 
235  read: 
236         559.106 Registration of debt relief organization.— 
237         (1) Effective April 1, 2011, each person who acts as a debt 
238  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 prescribed 
246  by commission rule which includes the name and principal 
247  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 bond 
279  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 prosecution 
309  or a prosecution or an administrative enforcement action, in any 
310  jurisdiction, which involves fraud, racketeering, embezzlement, 
311  fraudulent conversion, misappropriation of property, theft, 
312  dishonesty, breach of trust, or any other act of moral 
313  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  559.5551. 
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 includes shall 
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 for 
374  employee dishonesty, depositor’s forgery, and computer fraud. 
375  The insurance coverage must be in an amount not less than the 
376  greater of $100,000 or 10 percent of the monthly average of the 
377  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 company 
384  authorized to do business in this state. The amount and form of 
385  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 for 
395  the bond has been paid in full by the applicant. 
396         3. A statement from the surety company that the bond issued 
397  by the surety company meets the requirements of this part. The 
398  liability of the surety company under any bond issued pursuant 
399  to this section may not, in the aggregate, exceed the amount of 
400  the bond regardless of the number or amount of any claims filed 
401  or which might be asserted against the surety on such bond. If 
402  multiple claims are filed which collectively exceed the amount 
403  of the bond, the surety may pay the full amount of the bond to 
404  the office and is not further liable under the bond. The office 
405  shall hold such funds for distribution to claimants and 
406  administratively determine and pay to each claimant a pro rata 
407  share of each valid claim made within 6 months after the date 
408  the first claim is filed against the surety. 
409         (2) A copy of the annual financial audit report and 
410  insurance policies required by this section must shall be 
411  available for public inspection at each branch location of the 
412  organization. Copies shall be provided, upon written request, to 
413  any party requesting a copy for a charge that does not to exceed 
414  the cost of copying the reproduction of documents. 
415         Section 10. Section 559.109, Florida Statutes, is created 
416  to read: 
417         559.109 Maintenance of records.— 
418         (1) Each registered debt relief organization shall 
419  maintain, at the principal place of business designated on the 
420  registration, all books, accounts, records, and documents 
421  necessary to determine the registrant’s compliance with this 
422  part. 
423         (2) The office may authorize the maintenance of records at 
424  a location other than a principal place of business. The office 
425  may require books, accounts, and records to be produced and 
426  available at a reasonable and convenient location in this state. 
427         (3) The commission may prescribe by rule the minimum 
428  information to be shown in the books, accounts, records, and 
429  documents of registrants so that such records enable the office 
430  to determine the registrant’s compliance with this part. 
431         (4) All books, accounts, records, documents, and receipts 
432  of any payment transaction must be preserved and kept available 
433  for inspection by the office for at least 5 years after the date 
434  the transaction is completed. The commission may prescribe by 
435  rule requirements for the destruction of books, accounts, 
436  records, and documents retained by the registrant after the 
437  completion of the 5 years. 
438         Section 11. Section 559.111, Florida Statutes, is created 
439  to read: 
440         559.111 Financial analysis; service contracts.— 
441         (1) Before a debtor signs a service contract, the debt 
442  relief organization shall prepare, retain a copy of, and provide 
443  to the debtor a written financial analysis specific to the 
444  debtor which includes an evaluation of the debtor’s income, 
445  expenses, and all debts. An additional fee may not be charged 
446  for the financial analysis. 
447         (2) Based on the completed financial analysis, the debt 
448  relief organization shall provide to the debtor, and retain a 
449  copy of, a written determination of the debtor’s suitability for 
450  debt management or debt settlement services and whether the 
451  debtor can reasonably meet the requirements of the service 
452  contract, including the debtor’s ability to save the amount 
453  estimated to be needed to fund the settlement of the debt. 
454         (3) The service contract between the debt relief 
455  organization and the debtor must be signed and dated by the 
456  debtor and include all of the following: 
457         (a) The following statement in at least 12-point uppercase 
458  type at the top of the service contract: 
459 
460         IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR 
461         CREDITORS BEFORE SIGNING THIS CONTRACT. YOUR CREDITORS 
462         MAY BE WILLING TO DIRECTLY NEGOTIATE A SETTLEMENT, 
463         INTEREST RATE REDUCTION, MODIFICATION, PAYMENT PLAN, 
464         OR RESTRUCTURING OF YOUR DEBT FREE OF CHARGE. 
465 
466         YOUR USE OF DEBT MANAGEMENT OR DEBT SETTLEMENT 
467         SERVICES MAY RESULT IN LATE FEES, ADDITIONAL DEBTS, 
468         AND AN ADVERSE CREDIT RATING. YOU SHOULD CONTACT YOUR 
469         CREDITOR FOR MORE INFORMATION. 
470 
471         (b) A full and detailed description of the services to be 
472  performed by the debt relief organization for the debtor, 
473  including the financial analysis determining the suitability of 
474  the debtor for debt management or debt settlement services, all 
475  guarantees and all promises of full or partial refunds, the 
476  estimated date or length of time by which the services are to be 
477  performed, and a copy of the Florida Debt Relief Services Act. 
478         (c) All terms and conditions of payment, including the 
479  anticipated total of all payments to be made by the debtor and 
480  the estimated amount of any payments to be made to the debt 
481  relief organization or to any other person. 
482         (d) The debt relief organization’s principal business 
483  address and the name and address of its agent in the state 
484  authorized to receive service of process. 
485         (e) A clear and conspicuous statement in boldface type, in 
486  immediate proximity to the space reserved for the debtor’s 
487  signature, which states: “You, the debtor, may cancel this 
488  service contract at any time before midnight of the 5th business 
489  day after the date of signing this contract. [See the attached 
490  Notice of Right to Cancel for further explanation of this 
491  right.]” 
492         (f) A Notice of Right to Cancel attached to the contract, 
493  in duplicate and easily detachable, which contains the following 
494  statement in at least 12-point uppercase type: 
495 
496                      NOTICE OF RIGHT TO CANCEL 
497 
498         YOU MAY CANCEL ANY CONTRACT FOR CREDIT COUNSELING, 
499         DEBT MANAGEMENT, OR DEBT SETTLEMENT SERVICES WITHIN 5 
500         BUSINESS DAYS AFTER THE DATE THE CONTRACT IS SIGNED BY 
501         YOU WITHOUT INCURRING ANY PENALTY OR OBLIGATION. 
502 
503         YOUR PAYMENT MUST BE RETURNED TO YOU WITHIN 10 
504         BUSINESS DAYS AFTER RECEIPT OF YOUR CANCELLATION 
505         NOTICE. 
506 
507         TO CANCEL THIS CONTRACT, MAIL OR DELIVER A SIGNED AND 
508         DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER 
509         WRITTEN NOTICE CLEARLY INDICATING YOUR DESIRE TO 
510         CANCEL YOUR CONTRACT. 
511 
512         TO: ...(name of debt relief organization)... 
513         AT: ...(address)... 
514 
515         BY SIGNING AND DATING THIS NOTICE, I HEREBY CANCEL MY 
516         SERVICE CONTRACT, EXECUTED ON: ...(date service 
517         contract signed)... 
518 
519         ...(Signature of Debtor)... 
520         ...(Date)... 
521         ...(Address)... 
522         ...(Phone Number)... 
523 
524         (4) The debt relief organization must provide the debtor, 
525  at the time the documents are signed, with a copy of the 
526  completed service contract as described in subsection (3) and 
527  all other documents the organization requires the debtor to 
528  sign. 
529         Section 12. Section 817.805, Florida Statutes, is 
530  transferred, renumbered as section 559.112, Florida Statutes, 
531  and amended to read: 
532         559.112 817.805 Disbursement of funds.—A debt relief 
533  organization offering debt management services that include 
534  disbursement to a creditor must Any person engaged in debt 
535  management or credit counseling services shall disburse to the 
536  appropriate creditors all funds received from a debtor, less any 
537  fees permitted by s. 559.113 817.802 and any creditor 
538  contributions, within 30 days after receipt of such funds. 
539  However, a creditor contribution may not reduce any sums to be 
540  credited to the account of a debtor making a payment to the 
541  organization credit counseling agency for further payment to the 
542  creditor. Further, a debt relief organization offering debt 
543  settlement services or debt management services must any person 
544  engaged in such services shall maintain a separate trust account 
545  for the receipt of any funds from debtors and the disbursement 
546  of such funds on behalf of such debtors. 
547         Section 13. Section 817.802, Florida Statutes, is 
548  transferred, renumbered as section 559.113, Florida Statutes, 
549  and amended to read: 
550         559.113 817.802 Prohibited acts Unlawful fees and costs.— 
551         (1) A debt relief organization may not, directly or 
552  indirectly, charge or accept from a debtor: 
553         (a) Any payment for services before the execution of a 
554  written service contract. It is unlawful for any person, while 
555  engaging in debt management services or credit counseling 
556  services, to charge or accept from a debtor residing in this 
557  state, directly or indirectly, 
558         (b) A fee or contribution greater than $50 for the initial 
559  setup or initial consultation. Subsequently, the person may not 
560  charge or accept 
561         (c) A fee or contribution from a debtor residing in this 
562  state greater than $120 per year for credit counseling services 
563  provided in addition to the initial consultation under 
564  subsection (2). additional consultations or, alternatively, if 
565         (d) A fee or contribution for debt management services 
566  which exceeds as defined in s. 817.801(4)(b) are provided, the 
567  person may charge the greater of 7.5 percent of the amount paid 
568  monthly by the debtor to the organization for disbursement to a 
569  creditor person or $35 per month, whichever is greater, or 7.5 
570  percent of the enrolled debt. 
571         (e) A fee or contribution for debt settlement services 
572  which exceeds 40 percent of the savings realized which is 
573  defined to be the difference between the amount of enrolled debt 
574  and the amount paid to the creditor in discharge of the enrolled 
575  debt, less any fees collected pursuant to paragraphs (b) and 
576  (c). However, such fees collected for debt settlement services, 
577  in the aggregate, may not exceed 20 percent of the enrolled 
578  debt. For service contracts requiring fees to be paid on a 
579  monthly basis, the payment of such fees must be spread uniformly 
580  over at least 18 months or 50 percent of the term of the 
581  contract, whichever is greater. 
582         (f) A fee or contribution unless the debt management 
583  services or debt settlement services result in a settlement, 
584  discharge, or modification of the debt on terms more favorable 
585  to the debtor than the terms of the original agreement between 
586  the debtor and creditor. 
587         (g)� Any fee or contribution for debt management, unless no 
588  other payment has been received, directly or indirectly, from 
589  the debtor for such services. Fees authorized under this 
590  subsection may not be a part of or included in the calculation 
591  of total enrolled debt. 
592         (2) A debt relief organization may not: 
593         (a) Advise any debtor, directly or indirectly, to not 
594  contact or communicate with his or her creditors before or 
595  during the service contract period. 
596         (b) Make or use any false or misleading representations or 
597  omit any material fact in connection with the offer, sale, or 
598  provision of services, or engage, directly or indirectly, in any 
599  fraudulent, false, misleading, unconscionable, unfair, or 
600  deceptive act or practice in connection with the offer or sale 
601  of any of the services of a debt relief organization. 
602         (c) Provide services to a debtor without executing a 
603  service contract that complies with s. 559.111. 
604         (d) Fail to provide copies of the financial analysis, all 
605  service contracts, and any other documents the debtor is 
606  required to sign as provided under s. 559.111. 
607         (e) Fail to perform any of the terms, conditions, and 
608  obligations provided in the service contract with the debtor. 
609         (f)� Fail to disclose on any offer or sale of services, 
610  including any Internet website, the debt relief organization’s 
611  name, business address, telephone number, and e-mail address, if 
612  any. 
613         (g)� Fail to provide the debtor with a 5-business-day right 
614  of cancellation without the debtor incurring any penalty or 
615  obligation. 
616         (h) Fail to obtain an annual financial audit report and 
617  surety bond. 
618         (i) Fail to submit an annual financial audit report to the 
619  office. 
620         (j)� Fail to report on a form prescribed by commission rule 
621  any change to information contained in an initial application 
622  form or any amendment to the application within 30 days after 
623  the change is effective. 
624         (k) Fail to comply with any of the provisions of this part. 
625         (2) This section does not prohibit any person, while 
626  engaging in debt management or credit counseling services, from 
627  imposing upon and receiving from a debtor a reasonable and 
628  separate charge or fee for insufficient funds transactions. 
629         Section 14. Section 559.114, Florida Statutes, is created 
630  to read: 
631         559.114 Debtor complaints; administrative duties.— 
632         (1) The office shall receive and maintain records of 
633  correspondence and complaints from debtors concerning any and 
634  all persons who provide credit counseling, debt management, or 
635  debt settlement services, including debt relief organizations. 
636         (2) The office shall inform and furnish relevant 
637  information to the appropriate regulatory body if a debt relief 
638  organization exempt from registration under this part has been 
639  named in consumer complaints alleging violations of this part. 
640         (3) The office shall investigate complaints and record the 
641  resolution of such complaints. 
642         (4) A debt relief organization that provides or attempts to 
643  provide debt management or debt settlement services without 
644  first registering in accordance with this part is subject to a 
645  penalty of up to $25,000 in addition to the other remedies 
646  provided in this part and under part II of chapter 501. The 
647  office shall advise the appropriate state attorney, or the 
648  Attorney General, of any determination by the office of a 
649  violation of this part by any debt relief organization that is 
650  not registered as required by this part. The office shall 
651  furnish the state attorney or Attorney General with the office’s 
652  information concerning the alleged violations of such 
653  requirements. The enforcing authority is entitled to reasonable 
654  attorneys fees and costs in any action brought to enforce this 
655  part against an unregistered debt relief organization. 
656         (5)� A registered debt relief organization must provide a 
657  written response to the office within 20 days after receipt of a 
658  written request from the office for information concerning a 
659  consumer complaint. The response must address the issues and 
660  allegations raised in the complaint. The office may impose an 
661  administrative fine of up to $2,500 per request per day upon any 
662  registrant that fails to comply with this subsection. 
663         Section 15. Section 559.115, Florida Statutes, is created 
664  to read: 
665         559.115 Subpoenas.— 
666         (1) The office may: 
667         (a) Issue and serve subpoenas and subpoenas duces tecum to 
668  compel the attendance of witnesses and the production of all 
669  books, accounts, records, and other documents and materials 
670  relevant to an investigation conducted by the office. The 
671  office, or its authorized representative, may administer oaths 
672  and affirmations to any person. 
673         (b) Seek subpoenas or subpoenas duces tecum from any court 
674  to command the appearance of witnesses and the production of 
675  books, accounts, records, and other documents or materials at a 
676  time and place named in the subpoenas, and an authorized 
677  representative of the office may serve such subpoenas. 
678         (2) If there is substantial noncompliance with a subpoena 
679  or subpoena duces tecum issued by the office, the office may 
680  petition the court in the county where the person subpoenaed 
681  resides or has his or her principal place of business for an 
682  order requiring the person to appear, testify, or produce such 
683  books, accounts, records, and other documents as are specified 
684  in the subpoena or subpoena duces tecum. 
685         (3) The office is entitled to the summary procedure 
686  provided in s. 51.011, and the court shall advance such cause on 
687  its calendar. Attorney’s fees and any other costs incurred by 
688  the office to obtain an order granting, in whole or in part, a 
689  petition for enforcement of a subpoena or subpoena duces tecum 
690  shall be taxed against the subpoenaed person, and failure to 
691  comply with such order is a contempt of court. 
692         (4)� To aid in the enforcement of this part, the office may 
693  require or permit a person to file a statement in writing, under 
694  oath or otherwise as the office determines, as to all the facts 
695  and circumstances concerning the matter to be investigated. 
696         Section 16. Section 559.116, Florida Statutes, is created 
697  to read: 
698         559.116 Cease and desist orders.—The office may issue and 
699  serve upon any person an order to cease and desist and to take 
700  corrective action if it has reason to believe the person is 
701  violating, has violated, or is about to violate any provision of 
702  this part, any rule or order issued under this part, or any 
703  written agreement between the person and the office. All 
704  procedural matters relating to issuance and enforcement of such 
705  order are governed by the Administrative Procedure Act. 
706         Section 17. Section 817.806, Florida Statutes, is 
707  transferred, renumbered as section 559.117, Florida Statutes, 
708  and amended to read: 
709         559.117 817.806 Violations; penalties.— 
710         (1) Any person who violates any provision of this part 
711  commits an unfair or deceptive trade practice as defined in part 
712  II of chapter 501, and. violators are also shall be subject to 
713  the penalties, and remedies, and enforcement actions provided 
714  therein. Further, any debtor consumer injured by a violation of 
715  this part may bring an action for recovery of damages. Judgment 
716  shall be entered for actual damages, but in no case less than 
717  the amount paid by the debtor consumer to the debt relief 
718  organization credit counseling agency, plus reasonable 
719  attorney’s fees and costs. 
720         (2) The office may impose an administrative fine on, or 
721  revoke or suspend the registration of a registrant who has 
722  committed a violation of this part. Final action to fine, 
723  suspend, or revoke the registration of a registrant is subject 
724  to review in accordance with chapter 120. 
725         (a) The office may impose suspension rather than revocation 
726  of a registration if circumstances warrant that one or the other 
727  should be imposed and the registrant demonstrates that the 
728  registrant has taken affirmative steps that can be expected to 
729  effectively eliminate the violations and that the registrant’s 
730  registration has never been previously suspended. 
731         (b) In addition to, or in lieu of suspension or revocation 
732  of a registration, the office may impose an administrative fine 
733  of up to $25,000 per violation. The office shall adopt rules 
734  establishing guidelines for imposing administrative penalties. 
735         (3)(2) It is Any person who violates any provision of this 
736  part commits a felony of the third degree, punishable as 
737  provided in s. 775.082, or s. 775.083, or s. 775.084 for any 
738  person to provide debt management or debt settlement services in 
739  this state without first registering with the office, or to 
740  register or attempt to register by means of fraud, 
741  misrepresentation, or concealment. 
742         Section 18. Sections 559.10, 559.11, 559.12, and 559.13, 
743  Florida Statutes, are repealed. 
744         Section 19. Paragraph (g) of subsection (1) of section 
745  516.07, Florida Statutes, is amended to read: 
746         516.07 Grounds for denial of license or for disciplinary 
747  action.— 
748         (1) The following acts are violations of this chapter and 
749  constitute grounds for denial of an application for a license to 
750  make consumer finance loans and grounds for any of the 
751  disciplinary actions specified in subsection (2): 
752         (g) Any violation of part III of chapter 817 or part II of 
753  chapter 559 or of any rule adopted under part II of chapter 559. 
754         Section 20. This act shall take effect January 1, 2011.