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H.B. 78

This document includes House Committee Amendments incorporated into the bill on Wed, Feb 1, 2012 at 12:34 PM by jeyring. -->              1     

UTAH DIVISION OF CONSUMER PROTECTION

             2     
AMENDMENTS

             3     
2012 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Derek E. Brown

             6     
Senate Sponsor: Patricia W. Jones

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies provisions relating to matters under the jurisdiction of the Utah
             11      Division of Consumer Protection.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies what constitutes a deceptive act or practice for purposes of the Consumer
             15      Sales Practices Act;
             16          .    modifies dollar threshold amounts for purposes of plans subject to the Business
             17      Opportunity Disclosure Act;
             18          .    modifies the definition of "telephone solicitation" for purposes of the Telephone
             19      Fraud Prevention Act; and
             20          .    modifies the Uniform Debt-Management Services Act.
             21      Money Appropriated in this Bill:
             22          None
             23      Other Special Clauses:
             24          None
             25      Utah Code Sections Affected:
             26      AMENDS:
             27          13-11-4, as last amended by Laws of Utah 2010, Chapter 54


             28          13-15-2, as last amended by Laws of Utah 2001, Chapter 196
             29          13-26-2, as last amended by Laws of Utah 2005, Chapter 18
             30          13-42-102, as enacted by Laws of Utah 2006, Chapter 154
             31          13-42-112, as last amended by Laws of Utah 2008, Chapter 382
             32          13-42-117, as last amended by Laws of Utah 2010, Chapter 378
             33          13-42-119, as last amended by Laws of Utah 2010, Chapter 378
             34          13-42-122, as last amended by Laws of Utah 2010, Chapter 378
             35          13-42-123, as last amended by Laws of Utah 2009, Chapter 229
             36          13-42-126, as enacted by Laws of Utah 2006, Chapter 154
             37          13-42-128, as last amended by Laws of Utah 2009, Chapter 229
             38          13-42-130, as last amended by Laws of Utah 2009, Chapter 229
             39          13-42-134, as last amended by Laws of Utah 2008, Chapter 382
             40     
             41      Be it enacted by the Legislature of the state of Utah:
             42          Section 1. Section 13-11-4 is amended to read:
             43           13-11-4. Deceptive act or practice by supplier.
             44          (1) A deceptive act or practice by a supplier in connection with a consumer transaction
             45      violates this chapter whether it occurs before, during, or after the transaction.
             46          (2) Without limiting the scope of Subsection (1), a supplier commits a deceptive act or
             47      practice if the supplier knowingly or intentionally:
             48          (a) indicates that the subject of a consumer transaction has sponsorship, approval,
             49      performance characteristics, accessories, uses, or benefits, if it has not;
             50          (b) indicates that the subject of a consumer transaction is of a particular standard,
             51      quality, grade, style, or model, if it is not;
             52          (c) indicates that the subject of a consumer transaction is new, or unused, if it is not, or
             53      has been used to an extent that is materially different from the fact;
             54          (d) indicates that the subject of a consumer transaction is available to the consumer for
             55      a reason that does not exist, including any of the following reasons falsely used in an
             56      advertisement:
             57          (i) "going out of business";
             58          (ii) "bankruptcy sale";


             59          (iii) "lost our lease";
             60          (iv) "building coming down";
             61          (v) "forced out of business";
             62          (vi) "final days";
             63          (vii) "liquidation sale";
             64          (viii) "fire sale";
             65          (ix) "quitting business"; or
             66          (x) an expression similar to any of the expressions in Subsections (2)(d)(i) through
             67      (ix);
             68          (e) indicates that the subject of a consumer transaction has been supplied in accordance
             69      with a previous representation, if it has not;
             70          (f) indicates that the subject of a consumer transaction will be supplied in greater
             71      quantity than the supplier intends;
             72          (g) indicates that replacement or repair is needed, if it is not;
             73          (h) indicates that a specific price advantage exists, if it does not;
             74          (i) indicates that the supplier has a sponsorship, approval, or affiliation the supplier
             75      does not have;
             76          (j) (i) indicates that a consumer transaction involves or does not involve a warranty, a
             77      disclaimer of warranties, particular warranty terms, or other rights, remedies, or obligations, if
             78      the representation is false; or
             79          (ii) fails to honor a warranty or a particular warranty term;
             80          (k) indicates that the consumer will receive a rebate, discount, or other benefit as an
             81      inducement for entering into a consumer transaction in return for giving the supplier the names
             82      of prospective consumers or otherwise helping the supplier to enter into other consumer
             83      transactions, if receipt of the benefit is contingent on an event occurring after the consumer
             84      enters into the transaction;
             85          (l) after receipt of payment for goods or services, fails to ship the goods or furnish the
             86      services within the time advertised or otherwise represented or, if no specific time is advertised
             87      or represented, fails to ship the goods or furnish the services within 30 days, unless within the
             88      applicable time period the supplier provides the buyer with the option to:
             89          (i) cancel the sales agreement and receive a refund of all previous payments to the


             90      supplier if the refund is mailed or delivered to the buyer within 10 business days after the day
             91      on which the seller receives written notification from the buyer of the buyer's intent to cancel
             92      the sales agreement and receive the refund; or
             93          (ii) extend the shipping date to a specific date proposed by the supplier;
             94          (m) except as provided in Subsection (3)(b), fails to furnish a notice meeting the
             95      requirements of Subsection (3)(a) of the purchaser's right to cancel a direct solicitation sale
             96      within three business days of the time of purchase if:
             97          (i) the sale is made other than at the supplier's established place of business pursuant to
             98      the supplier's personal contact, whether through mail, electronic mail, facsimile transmission,
             99      telephone, or any other form of direct solicitation; and
             100          (ii) the sale price exceeds $25;
             101          (n) promotes, offers, or grants participation in a pyramid scheme as defined under Title
             102      76, Chapter 6a, Pyramid Scheme Act;
             103          (o) represents that the funds or property conveyed in response to a charitable
             104      solicitation will be donated or used for a particular purpose or will be donated to or used by a
             105      particular organization, if the representation is false;
             106          (p) if a consumer indicates the consumer's intention of making a claim for a motor
             107      vehicle repair against the consumer's motor vehicle insurance policy:
             108          (i) commences the repair without first giving the consumer oral and written notice of:
             109          (A) the total estimated cost of the repair; and
             110          (B) the total dollar amount the consumer is responsible to pay for the repair, which
             111      dollar amount may not exceed the applicable deductible or other copay arrangement in the
             112      consumer's insurance policy; or
             113          (ii) requests or collects from a consumer an amount that exceeds the dollar amount a
             114      consumer was initially told the consumer was responsible to pay as an insurance deductible or
             115      other copay arrangement for a motor vehicle repair under Subsection (2)(p)(i), even if that
             116      amount is less than the full amount the motor vehicle insurance policy requires the insured to
             117      pay as a deductible or other copay arrangement, unless:
             118          (A) the consumer's insurance company denies that coverage exists for the repair, in
             119      which case, the full amount of the repair may be charged and collected from the consumer; or
             120          (B) the consumer misstates, before the repair is commenced, the amount of money the


             121      insurance policy requires the consumer to pay as a deductible or other copay arrangement, in
             122      which case, the supplier may charge and collect from the consumer an amount that does not
             123      exceed the amount the insurance policy requires the consumer to pay as a deductible or other
             124      copay arrangement;
             125          (q) includes in any contract, receipt, or other written documentation of a consumer
             126      transaction, or any addendum to any contract, receipt, or other written documentation of a
             127      consumer transaction, any confession of judgment or any waiver of any of the rights to which a
             128      consumer is entitled under this chapter;
             129          (r) charges a consumer for a consumer transaction or a portion of a consumer
             130      transaction that has not previously been agreed to by the consumer;
             131          (s) solicits or enters into a consumer transaction with a person who lacks the mental
             132      ability to comprehend the nature and consequences of:
             133          (i) the consumer transaction; or
             134          (ii) the person's ability to benefit from the consumer transaction;
             135          (t) solicits for the sale of a product or service by providing a consumer with an
             136      unsolicited check or negotiable instrument the presentment or negotiation of which obligates
             137      the consumer to purchase a product or service, unless the supplier is:
             138          (i) a depository institution under Section 7-1-103 ;
             139          (ii) an affiliate of a depository institution; or
             140          (iii) an entity regulated under Title 7, Financial Institutions Act;
             141          (u) sends an unsolicited mailing to a person that appears to be a billing, statement, or
             142      request for payment for a product or service the person has not ordered or used, or that implies
             143      that the mailing requests payment for an ongoing product or service the person has not received
             144      or requested;
             145          (v) issues a gift certificate, instrument, or other record in exchange for payment to
             146      provide the bearer, upon presentation, goods or services in a specified amount without printing
             147      in a readable manner on the gift certificate, instrument, packaging, or record any expiration
             148      date or information concerning a fee to be charged and deducted from the balance of the gift
             149      certificate, instrument, or other record; or
             150          (w) misrepresents the geographical origin or location of the supplier's business [in
             151      connection with the sale of cut flowers, flower arrangements, or floral products].


             152          (3) (a) The notice required by Subsection (2)(m) shall:
             153          (i) be a conspicuous statement written in dark bold with at least 12-point type on the
             154      first page of the purchase documentation; and
             155          (ii) read as follows: "YOU, THE BUYER, MAY CANCEL THIS CONTRACT AT
             156      ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY (or time period
             157      reflecting the supplier's cancellation policy but not less than three business days) AFTER THE
             158      DATE OF THE TRANSACTION OR RECEIPT OF THE PRODUCT, WHICHEVER IS
             159      LATER".
             160          (b) A supplier is exempt from the requirements of Subsection (2)(m) if the supplier's
             161      cancellation policy:
             162          (i) is communicated to the buyer; and
             163          (ii) offers greater rights to the buyer than Subsection (2)(m).
             164          (4) (a) A gift certificate, instrument, or other record that does not print an expiration
             165      date in accordance with Subsection (2)(v) does not expire.
             166          (b) A gift certificate, instrument, or other record that does not include printed
             167      information concerning a fee to be charged and deducted from the balance of the gift
             168      certificate, instrument, or other record is not subject to the charging and deduction of the fee.
             169          (c) Subsections (2)(v) and (4)(b) do not apply to a gift certificate, instrument, or other
             170      record useable at multiple, unaffiliated sellers of goods or services if an expiration date is
             171      printed on the gift certificate, instrument, or other record.
             172          Section 2. Section 13-15-2 is amended to read:
             173           13-15-2. Definitions.
             174          As used in this chapter:
             175          (1) (a) "Assisted marketing plan" means the sale or lease of any products, equipment,
             176      supplies, or services that are sold to the purchaser upon payment of an initial required
             177      consideration of [$300] $500 or more for the purpose of enabling the purchaser to start a
             178      business, and in which the seller represents:
             179          (i) that the seller will provide locations or assist the purchaser in finding locations for
             180      the use or operation of vending machines, racks, display cases, or other similar devices, or
             181      currency operated amusement machines or devices, on premises neither owned nor leased by
             182      the purchaser or seller;


             183          (ii) that the seller will purchase any or all products made, produced, fabricated, grown,
             184      or modified by the purchaser, using in whole or in part the supplies, services, or chattels sold to
             185      the purchaser;
             186          (iii) that the seller will provide the purchaser with a guarantee that the purchaser will
             187      receive income from the assisted marketing plan that exceeds the price paid for the assisted
             188      marketing plan, or repurchase any of the products, equipment, supplies, or chattels supplied by
             189      the seller if the purchaser is dissatisfied with the assisted marketing plan; or
             190          (iv) that upon payment by the purchaser of a fee or sum of money, which exceeds
             191      [$300] $500 to the seller, the seller will provide a sales program or marketing program that will
             192      enable the purchaser to derive income from the assisted marketing plan that exceeds the price
             193      paid for the marketing plan.
             194          (b) "Assisted marketing plan" does not include:
             195          (i) the sale of an ongoing business when the owner of that business sells and intends to
             196      sell only that one assisted marketing plan;
             197          (ii) not-for-profit sale of sales demonstration equipment, materials, or samples for a
             198      total price of [$300] $500 or less; or
             199          (iii) the sale of a package franchise or a product franchise defined by and in compliance
             200      with Federal Trade Commission rules governing franchise and business opportunity ventures.
             201          (c) As used in Subsection (1)(a)(iii) "guarantee" means a written agreement, signed by
             202      the purchaser and seller, disclosing the complete details and any limitations or exceptions of
             203      the agreement.
             204          (2) "Business opportunity" means an assisted marketing plan subject to this chapter.
             205          (3) "Division" means the Division of Consumer Protection of the Department of
             206      Commerce.
             207          (4) (a) "Initial required consideration" means the total amount a purchaser is obligated
             208      to pay under the terms of the assisted marketing plan, either prior to or at the time of delivery
             209      of the products, equipment, supplies, or services, or within six months of the commencement
             210      of operation of the assisted marketing plan by the purchaser. If payment is over a period of
             211      time, "initial required consideration" means the sum of the down payment and the total
             212      monthly payments.
             213          (b) "Initial required consideration" does not mean the not-for-profit sale of sales


             214      demonstration equipment, materials, or supplies for a total price of less than [$300] $500.
             215          (5) "Person" means any natural person, corporation, partnership, organization,
             216      association, trust, or any other legal entity.
             217          (6) "Purchaser" means a person who becomes obligated to pay for an assisted
             218      marketing plan.
             219          (7) "Registered trademark" or "service mark" means a trademark, trade name, or
             220      service mark registered with the United States Patent and Trademark Office, or Utah, or the
             221      state of incorporation if a corporation.
             222          (8) "Seller" means a person who sells or offers to sell an assisted marketing plan.
             223          Section 3. Section 13-26-2 is amended to read:
             224           13-26-2. Definitions.
             225          As used in this chapter, unless the context otherwise requires:
             226          (1) "Continuity plan" means a shipment, with the prior express consent of the buyer, at
             227      regular intervals of similar special-interest products. A continuity plan is distinguished from a
             228      subscription arrangement by no binding commitment period or purchase amount.
             229          (2) "Division" means the Division of Consumer Protection.
             230          (3) "Fictitious personal name" means a name other than an individual's true name. An
             231      "individual's true name" is the name taken at birth unless changed by operation of law or by
             232      civil action.
             233          (4) "Material statement" or "material fact" means information that a person of ordinary
             234      intelligence or prudence would consider important in deciding whether or not to accept an offer
             235      extended through a telephone solicitation.
             236          (5) "Premium" means a gift, bonus, prize, award, certificate, or other document by
             237      which a prospective purchaser is given a right, chance, or privilege to purchase or receive
             238      goods or services with a stated or represented value of $25 or more as an inducement to a
             239      prospective purchaser to purchase other goods or services.
             240          (6) "Subscription arrangements," "standing order arrangements," "supplements," and
             241      "series arrangements" mean products or services provided, with the prior express request or
             242      consent of the buyer, for a specified period of time at a price dependent on the duration of
             243      service and to complement an initial purchase.
             244          (7) (a) "Telephone solicitation," "sale," "selling," or "solicitation of sale" means:


             245          (i) a sale or solicitation of goods or services in which:
             246          (A) (I) the seller solicits the sale over the telephone;
             247          (II) the purchaser's agreement to purchase is made over the telephone; and
             248          (III) the purchaser, over the telephone, pays for or agrees to commit to payment for
             249      goods or services prior to or upon receipt by the purchaser of the goods or services;
             250          (B) the solicitor, not exempt under Section 13-26-4 , induces a prospective purchaser
             251      over the telephone, to make and keep an appointment that directly results in the purchase of
             252      goods or services by the purchaser that would not have occurred without the telephone
             253      solicitation and inducement by the solicitor;
             254          (C) the seller offers or promises a premium to a prospective purchaser if:
             255          (I) the seller induces the prospective purchaser to initiate a telephone contact with the
             256      telephone soliciting business; and
             257          (II) the resulting solicitation meets the requirements of Subsection (7)(a); or
             258          (D) the solicitor solicits a charitable donation involving the exchange of any premium,
             259      prize, gift, ticket, subscription, or other benefit in connection with any appeal made for a
             260      charitable purpose by an organization that is not otherwise exempt under Subsection
             261      13-26-4 (2)(b)(iv); or
             262          (ii) a telephone solicitation as defined in Section 13-25a-102 .
             263          (b) "Telephone solicitation," "sale," "selling," or "solicitation of sale" does not include
             264      a sale or solicitation that occurs solely through an Internet website without the use of a
             265      telephone call.
             266          [(b)] (c) A solicitation of sale or telephone solicitation is considered complete when
             267      made, whether or not the person receiving the solicitation agrees to the sale or to make a
             268      charitable donation.
             269          (8) "Telephone soliciting business" means a sole proprietorship, partnership, limited
             270      liability company, corporation, or other association of individuals engaged in a common effort
             271      to conduct telephone solicitations.
             272          (9) "Telephone solicitor" or "solicitor" means a person, partnership, limited liability
             273      company, corporation, or other entity that:
             274          (a) makes a telephone solicitation; or
             275          (b) causes a telephone solicitation to be made.


             276          Section 4. Section 13-42-102 is amended to read:
             277           13-42-102. Definitions.
             278          In this chapter:
             279          (1) "Administrator" means the Division of Consumer Protection.
             280          (2) "Affiliate":
             281          (a) with respect to an individual, means:
             282          (i) the spouse of the individual;
             283          (ii) a sibling of the individual or the spouse of a sibling;
             284          (iii) an individual or the spouse of an individual who is a lineal ancestor or lineal
             285      descendant of the individual or the individual's spouse;
             286          (iv) an aunt, uncle, great aunt, great uncle, first cousin, niece, nephew, grandniece, or
             287      grandnephew, whether related by the whole or the half blood or adoption, or the spouse of any
             288      of them; or
             289          (v) any other individual occupying the residence of the individual; and
             290          (b) with respect to an entity, means:
             291          (i) a person that directly or indirectly controls, is controlled by, or is under common
             292      control with the entity;
             293          (ii) an officer of, or an individual performing similar functions with respect to, the
             294      entity;
             295          (iii) a director of, or an individual performing similar functions with respect to, the
             296      entity;
             297          (iv) subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), a
             298      person that receives or received more than $25,000 from the entity in either the current year or
             299      the preceding year or a person that owns more than 10% of, or an individual who is employed
             300      by or is a director of, a person that receives or received more than $25,000 from the entity in
             301      either the current year or the preceding year;
             302          (v) an officer or director of, or an individual performing similar functions with respect
             303      to, a person described in Subsection (2)(b)(i);
             304          (vi) the spouse of, or an individual occupying the residence of, an individual described
             305      in Subsections (2)(b)(i) through (v); or
             306          (vii) an individual who has the relationship specified in Subsection (2)(a)(iv) to an


             307      individual or the spouse of an individual described in Subsections (2)(b)(i) through (v).
             308          (3) "Agreement" means an agreement between a provider and an individual for the
             309      performance of debt-management services.
             310          (4) "Bank" means a financial institution, including a commercial bank, savings bank,
             311      savings and loan association, credit union, and trust company, engaged in the business of
             312      banking, chartered under federal or state law, and regulated by a federal or state banking
             313      regulatory authority.
             314          (5) "Business address" means the physical location of a business, including the name
             315      and number of a street.
             316          (6) "Certified counselor" means an individual certified by a training program or
             317      certifying organization, approved by the administrator, that authenticates the competence of
             318      individuals providing education and assistance to other individuals in connection with
             319      debt-management services.
             320          (7) "Concessions" means assent to repayment of a debt on terms more favorable to an
             321      individual than the terms of the contract between the individual and a creditor.
             322          (8) "Day" means calendar day.
             323          (9) "Debt-management services" means services as an intermediary between an
             324      individual and one or more creditors of the individual for the purpose of obtaining concessions,
             325      but does not include:
             326          (a) legal services provided in an attorney-client relationship by an attorney licensed or
             327      otherwise authorized, by pro hac vice admission, to practice law in this state;
             328          (b) accounting services provided in an accountant-client relationship by a certified
             329      public accountant licensed to provide accounting services in this state; or
             330          (c) financial-planning services provided in a financial planner-client relationship by a
             331      member of a financial-planning profession whose members the administrator, by rule,
             332      determines are:
             333          (i) licensed by this state;
             334          (ii) subject to a disciplinary mechanism;
             335          (iii) subject to a code of professional responsibility; and
             336          (iv) subject to a continuing education requirement.
             337          (10) "Entity" means a person other than an individual.


             338          (11) "Good faith" means honesty in fact and the observance of reasonable standards of
             339      fair dealing.
             340          (12) "Person" means an individual, corporation, business trust, estate, trust,
             341      partnership, limited liability company, association, joint venture, or any other legal or
             342      commercial entity. The term does not include a public corporation, government, or
             343      governmental subdivision, agency, or instrumentality.
             344          (13) "Plan" means a program or strategy in which a provider furnishes
             345      debt-management services to an individual and which includes a schedule of payments to be
             346      made by or on behalf of the individual and used to pay debts owed by the individual.
             347          (14) "Principal amount of the debt" means the amount of a debt at the time of an
             348      agreement.
             349          (15) "Provider" means a person that provides, offers to provide, or agrees to provide
             350      debt-management services directly or through others.
             351          (16) "Record" means information that is inscribed on a tangible medium or that is
             352      stored in an electronic or other medium and is retrievable in perceivable form.
             353          (17) "Settlement fee" means a charge imposed on or paid by an individual in
             354      connection with a creditor's assent to accept in full satisfaction of a debt an amount less than
             355      the principal amount of the debt.
             356          (18) "Sign" means, with present intent to authenticate or adopt a record:
             357          (a) to execute or adopt a tangible symbol; or
             358          (b) to attach to or logically associate with the record an electronic sound, symbol, or
             359      process.
             360          (19) "State" means a state of the United States, the District of Columbia, Puerto Rico,
             361      the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction
             362      of the United States.
             363          (20) "Trust account" means an account held by a provider that is:
             364          (a) established in an insured bank;
             365          (b) separate from other accounts of the provider or its designee;
             366          (c) designated as a trust account or other account designated to indicate that the money
             367      in the account is not the money of the provider or its designee; and
             368          (d) used to hold money of one or more individuals for disbursement to creditors of the


             369      individuals.
             370          Section 5. Section 13-42-112 is amended to read:
             371           13-42-112. Registration in another state -- Rulemaking.
             372          (1) (a) Subject to rules made by the administrator, if a provider holds a license or
             373      certificate of registration in another state authorizing it to provide debt-management services,
             374      the provider may submit a copy of that license or certificate and the application for it instead of
             375      an application in the form prescribed by Subsection 13-42-105 (1), Section 13-42-106 , or
             376      Subsection 13-42-111 (2).
             377          (b) The administrator shall accept the application and the license or certificate from
             378      the other state as an application for registration as a provider or for renewal of registration as a
             379      provider, as appropriate, in this state if:
             380          (i) the application in the other state contains information substantially similar to or
             381      more comprehensive than that required in an application submitted in this state;
             382          (ii) the applicant provides the information required by Subsections 13-42-105 (2)(d) and
             383      13-42-106 (1), (3), (7), (10), (12), and (13);
             384          (iii) the applicant, under penalty of perjury, certifies that the information contained in
             385      the application is current or, to the extent it is not current, supplements the application to make
             386      the information current; and
             387          (iv) the applicant files a surety bond or substitute in accordance with Section
             388      13-42-113 or 13-42-114 that is solely payable or available to this state and to individuals who
             389      reside in this state.
             390          (2) The administrator, in accordance with Title 63G, Chapter 3, Utah Administrative
             391      Rulemaking Act, shall make rules designating the states in which a provider may have a license
             392      or certificate that may be submitted to the administrator in compliance with this section.
             393          Section 6. Section 13-42-117 is amended to read:
             394           13-42-117. Prerequisites for providing debt-management services.
             395          (1) Before providing debt-management services, a registered provider shall give the
             396      individual an itemized list of goods and services and the charges for each. The list shall be
             397      clear and conspicuous, be in a record the individual may keep whether or not the individual
             398      assents to an agreement, and describe the goods and services the provider offers:
             399          (a) free of additional charge if the individual enters into an agreement;


             400          (b) for a charge if the individual does not enter into an agreement; and
             401          (c) for a charge if the individual enters into an agreement, using the following
             402      terminology, as applicable, and format:
             403              Set-up fee _________________________________________________
             404                              dollar amount of fee
             405              Monthly service fee __________________________________________
             406                          dollar amount of fee or method of determining amount
             407              Settlement fee ______________________________________________
             408                          dollar amount of fee or method of determining amount
             409              Goods and services in addition to those provided in connection with a plan:
             410              _____________ ____________________________________________
             411                  (item) dollar amount or method of determining amount
             412              _____________ ____________________________________________
             413                  (item) dollar amount or method of determining amount.
             414          (2) A provider may not furnish debt-management services unless the provider, through
             415      the services of a certified counselor:
             416          (a) provides the individual with reasonable education about the management of
             417      personal finance;
             418          (b) has prepared a financial analysis; and
             419          (c) if the individual is to make regular, periodic payments to a creditor or a provider:
             420          (i) has prepared a plan for the individual;
             421          (ii) has made a determination, based on the provider's analysis of the information
             422      provided by the individual and otherwise available to it, that the plan is suitable for the
             423      individual and the individual will be able to meet the payment obligations under the plan; and
             424          (iii) believes that each creditor of the individual listed as a participating creditor in the
             425      plan will accept payment of the individual's debts as provided in the plan.
             426          (3) Before an individual assents to an agreement to engage in a plan, a provider shall:
             427          (a) provide the individual with a copy of the analysis and plan required by Subsection
             428      (2) in a record that identifies the provider and that the individual may keep whether or not the
             429      individual assents to the agreement;
             430          (b) inform the individual of the availability, at the individual's option, of assistance by


             431      a toll-free communication system or in person to discuss the financial analysis and plan
             432      required by Subsection (2); and
             433          (c) with respect to all creditors identified by the individual or otherwise known by the
             434      provider to be creditors of the individual, provide the individual with a list of:
             435          (i) creditors that the provider expects to participate in the plan and grant concessions;
             436          (ii) creditors that the provider expects to participate in the plan but not grant
             437      concessions;
             438          (iii) creditors that the provider expects not to participate in the plan; and
             439          (iv) all other creditors.
             440          (4) Before an individual assents to an agreement, the provider shall inform the
             441      individual, in a record that contains nothing else, that is given separately, and that the
             442      individual may keep whether or not the individual assents to the agreement:
             443          (a) of the name and business address of the provider;
             444          (b) that plans are not suitable for all individuals and the individual may ask the
             445      provider about other ways, including bankruptcy, to deal with indebtedness;
             446          (c) of the amount of time necessary to achieve the results that the provider represents to
             447      be achievable;
             448          (d) if the provider intends to include a settlement offer to any of the individual's
             449      creditors or debt collectors:
             450          (i) of the time by which the provider will make a bona fide settlement offer to any of
             451      the individual's creditors or debt collectors; and
             452          (ii) of the amount of money or the percentage of each outstanding debt that the
             453      individual must accumulate before the provider will make a bona fide settlement offer to each
             454      creditor or debt collector;
             455          [(c)] (e) that establishment of a plan may adversely affect the individual's credit rating
             456      or credit scores;
             457          [(d)] (f) that nonpayment of debt may lead creditors to increase finance and other
             458      charges or undertake collection activity, including litigation;
             459          (g) if the provider requests or requires the individual to place money in an account at
             460      an insured financial institution, that the individual:
             461          (i) owns the funds held in the account;


             462          (ii) may withdraw from the provider's plan at any time without penalty; and
             463          (iii) is entitled to receive all money in the account, other than money that the provider
             464      earns as provided in Section 13-42-123 , at the time the individual withdraws from the
             465      provider's plan;
             466          [(e)] (h) unless it is not true, that the provider may receive compensation from the
             467      creditors of the individual; and
             468          [(f)] (i) that, unless the individual is insolvent, if a creditor settles for less than the full
             469      amount of the debt, the plan may result in the creation of taxable income to the individual, even
             470      though the individual does not receive any money.
             471          (5) If a provider may receive payments from an individual's creditors and the plan
             472      contemplates that the individual's creditors will reduce finance charges or fees for late payment,
             473      default, or delinquency, the provider may comply with Subsection (4) by providing the
             474      following disclosure, surrounded by black lines:
             475     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             476          (1) Debt-management plans are not right for all individuals, and you may ask us to
             477      provide information about other ways, including bankruptcy, to deal with your debts.
             478          (2) Using a debt-management plan may make it harder for you to obtain credit.
             479          (3) We may receive compensation for our services from your creditors.
             480     
_______________________________________

             481     
Name and business address of provider

             482          (6) If a provider will not receive payments from an individual's creditors and the plan
             483      contemplates that the individual's creditors will reduce finance charges or fees for late payment,
             484      default, or delinquency, a provider may comply with Subsection (4) by providing the following
             485      disclosure, surrounded by black lines:
             486     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             487          (1) Debt-management plans are not right for all individuals, and you may ask us to
             488      provide information about other ways, including bankruptcy, to deal with your debts.
             489          (2) Using a debt-management plan may make it harder for you to obtain credit.
             490     
______________________________________

             491     
Name and business address of provider

             492          (7) If an agreement contemplates that creditors will settle debts for less than the full


             493      principal amount of debt owed, a provider may comply with Subsection (4) by providing the
             494      following disclosure, surrounded by black lines:
             495     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             496          (1) Our program is not right for all individuals, and you may ask us to provide
             497      information about bankruptcy and other ways to deal with your debts.
             498          (2) Nonpayment of your debts under our program may
             499          hurt your credit rating or credit scores;
             500          lead your creditors to increase finance and other charges; and
             501          lead your creditors to undertake activity, including lawsuits, to collect the debts.
             502          (3) Reduction of debt under our program may result in taxable income to you, even
             503      though you will not actually receive any money.
             504     
_________________________________________

             505     
Name and business address of provider

             506          Section 7. Section 13-42-119 is amended to read:
             507           13-42-119. Form and contents of agreement.
             508          (1) An agreement shall:
             509          (a) be in a record;
             510          (b) be dated and signed by the provider and the individual;
             511          (c) include the name of the individual and the address where the individual resides;
             512          (d) include the name, business address, and telephone number of the provider;
             513          (e) be delivered to the individual immediately upon formation of the agreement; and
             514          (f) disclose:
             515          (i) the services to be provided;
             516          (ii) the amount, or method of determining the amount, of all fees, individually
             517      itemized, to be paid by the individual;
             518          (iii) the schedule of payments to be made by or on behalf of the individual, including
             519      the amount of each payment, the date on which each payment is due, and an estimate of the
             520      date of the final payment;
             521          (iv) if a plan provides for regular periodic payments to creditors:
             522          (A) each creditor of the individual to which payment will be made, the amount owed to
             523      each creditor, and any concessions the provider reasonably believes each creditor will offer;


             524      and
             525          (B) the schedule of expected payments to each creditor, including the amount of each
             526      payment and the date on which it will be made;
             527          (v) each creditor that the provider believes will not participate in the plan and to which
             528      the provider will not direct payment;
             529          (vi) how the provider will comply with its obligations under Subsection 13-42-127 (1);
             530          (vii) that the provider may terminate the agreement for good cause, upon return of
             531      unexpended money of the individual;
             532          (viii) that the individual may cancel the agreement as provided in Section 13-42-120 ;
             533          (ix) that the individual may contact the administrator with any questions or complaints
             534      regarding the provider; and
             535          (x) the address, telephone number, and Internet address or website of the administrator.
             536          (2) For purposes of Subsection (1)(e), delivery of an electronic record occurs when it is
             537      made available in a format in which the individual may retrieve, save, and print it and the
             538      individual is notified that it is available.
             539          (3) If the administrator supplies the provider with any information required under
             540      Subsection (1)(f)(x), the provider may comply with that requirement only by disclosing the
             541      information supplied by the administrator.
             542          (4) An agreement shall provide that:
             543          (a) the individual has a right to terminate the agreement at any time, without penalty or
             544      obligation, by giving the provider written or electronic notice, in which event:
             545          (i) the provider will refund all unexpended money that the provider or its agent has
             546      received from or on behalf of the individual, including any accrued interest, for the reduction or
             547      satisfaction of the individual's debt;
             548          (ii) with respect to an agreement that contemplates that creditors will settle debts for
             549      less than the principal amount of debt, the provider will refund 65% of any portion of the
             550      set-up fee that has not been credited against the settlement fee, if a set-up fee was charged; and
             551          (iii) all powers of attorney granted by the individual to the provider are revoked and
             552      ineffective;
             553          (b) the individual authorizes any bank in which the provider or its agent has established
             554      a trust account to disclose to the administrator any financial records relating to the trust


             555      account; and
             556          (c) the provider will notify the individual within five days after learning of a creditor's
             557      final decision to reject or withdraw from a plan and that this notice will include:
             558          (i) the identity of the creditor; and
             559          (ii) the right of the individual to modify or terminate the agreement.
             560          (5) An agreement may confer on a provider a power of attorney to settle the
             561      individual's debt for no more than 50% of the principal amount of the debt. An agreement may
             562      not confer a power of attorney to settle a debt for more than 50% of that amount, but may
             563      confer a power of attorney to negotiate with creditors of the individual on behalf of the
             564      individual. An agreement shall provide that the provider will obtain the assent of the
             565      individual after a creditor has assented to a settlement for more than 50% of the principal
             566      amount of the debt.
             567          (6) An agreement may not:
             568          (a) provide for application of the law of any jurisdiction other than the United States
             569      and this state;
             570          (b) except as permitted by Section 2 of the Federal Arbitration Act, 9 U.S.C. Section 2,
             571      or Title 78B, Chapter 11, Utah Uniform Arbitration Act, contain a provision that modifies or
             572      limits otherwise available forums or procedural rights, including the right to trial by jury, that
             573      are generally available to the individual under law other than this chapter;
             574          (c) contain a provision that restricts the individual's remedies under this chapter or law
             575      other than this chapter; or
             576          (d) contain a provision that:
             577          (i) limits or releases the liability of any person for not performing the agreement or for
             578      violating this chapter; or
             579          (ii) indemnifies any person for liability arising under the agreement or this chapter.
             580          (7) All rights and obligations specified in Subsection (4) and Section 13-42-120 exist
             581      even if not provided in the agreement. A provision in an agreement which violates Subsection
             582      (4), (5), or (6) is void.
             583          Section 8. Section 13-42-122 is amended to read:
             584           13-42-122. Trust account.
             585          (1) (a) All money paid to a provider by or on behalf of an individual for distribution to


             586      creditors pursuant to a plan is held in trust.
             587          (b) Within two business days after receipt, the provider shall deposit the money in a
             588      trust account established for the benefit of individuals to whom the provider is furnishing
             589      debt-management services.
             590          (c) A person administering a trust account under this Subsection (1) may not:
             591          (i) be owned or controlled by or affiliated with the provider; or
             592          (ii) give or accept money or other compensation in exchange for referrals of business
             593      involving the provider's service.
             594          (2) Money held in trust by a provider is not property of the provider or its designee.
             595      The money is not available to creditors of the provider or designee, except an individual from
             596      whom or on whose behalf the provider received money, to the extent that the money has not
             597      been disbursed to creditors of the individual.
             598          (3) A provider shall:
             599          (a) maintain separate records of account for each individual to whom the provider is
             600      furnishing debt-management services;
             601          (b) disburse money paid by or on behalf of the individual to creditors of the individual
             602      as disclosed in the agreement, except that:
             603          (i) the provider may delay payment to the extent that a payment by the individual is not
             604      final; and
             605          (ii) if a plan provides for regular periodic payments to creditors, the disbursement shall
             606      comply with the due dates established by each creditor; and
             607          (c) promptly correct any payments that are not made or that are misdirected as a result
             608      of an error by the provider or other person in control of the trust account and reimburse the
             609      individual for any costs or fees imposed by a creditor as a result of the failure to pay or
             610      misdirection.
             611          (4) A provider may not commingle money in a trust account established for the benefit
             612      of individuals to whom the provider is furnishing debt-management services with money of
             613      other persons.
             614          (5) A trust account shall at all times have a cash balance equal to the sum of the
             615      balances of each individual's account.
             616          (6) If a provider has established a trust account pursuant to Subsection (1), the provider


             617      shall reconcile the trust account at least once a month. The reconciliation shall compare the
             618      cash balance in the trust account with the sum of the balances in each individual's account. If
             619      the provider or its designee has more than one trust account, each trust account shall be
             620      individually reconciled.
             621          (7) If a provider discovers, or has a reasonable suspicion of, embezzlement or other
             622      unlawful appropriation of money held in trust, the provider immediately shall notify the
             623      administrator by a method approved by the administrator. Unless the administrator by rule
             624      provides otherwise, within five days thereafter, the provider shall give notice to the
             625      administrator describing the remedial action taken or to be taken.
             626          (8) If an individual terminates an agreement or it becomes reasonably apparent to a
             627      provider that a plan has failed, the provider shall [promptly], within seven business days after
             628      the individual's request, refund to the individual all money paid by or on behalf of the
             629      individual, including any accrued interest, which has not been paid to creditors, less fees that
             630      are payable to the provider under Section 13-42-123 .
             631          (9) Before relocating a trust account from one bank to another, a provider shall inform
             632      the administrator of the name, business address, and telephone number of the new bank. As
             633      soon as practicable, the provider shall inform the administrator of the account number of the
             634      trust account at the new bank.
             635          Section 9. Section 13-42-123 is amended to read:
             636           13-42-123. Fees and other charges.
             637          (1) A provider may not impose directly or indirectly a fee or other charge on an
             638      individual or receive money from or on behalf of an individual for debt-management services
             639      except as permitted by this section.
             640          (2) A provider may not impose charges or receive payment for debt-management
             641      services until the provider and the individual have signed an agreement that complies with
             642      Sections 13-42-119 and 13-42-128 .
             643          (3) If an individual assents to an agreement, a provider may not impose a fee or other
             644      charge for educational or counseling services, or the like, except as otherwise provided in this
             645      Subsection (3) and Subsection 13-42-128 (4). The administrator may authorize a provider to
             646      charge a fee based on the nature and extent of the educational or counseling services furnished
             647      by the provider.


             648          (4) [Subject] (a) Subsections (4)(b) through (d) are subject to adjustment of dollar
             649      amounts pursuant to Subsection 13-42-132 (6)[, the following rules apply:].
             650          [(a)] (b) If an individual assents to a plan that contemplates that creditors will reduce
             651      finance charges or fees for late payment, default, or delinquency, the provider may charge:
             652          (i) a fee not exceeding $50 for consultation, obtaining a credit report, setting up an
             653      account, and the like; and
             654          (ii) a monthly service fee, not to exceed $10 times the number of accounts remaining in
             655      a plan at the time the fee is assessed, but not more than $50 in any month.
             656          [(b)] (c) If an individual assents to an agreement that contemplates that creditors will
             657      settle debts for less than the principal amount of the debt, a provider may [charge:] not request
             658      or receive payment of any fee or consideration for the provider's service unless:
             659          [(i) subject to Subsection 13-42-119 (4), a fee for consultation, obtaining a credit report,
             660      setting up an account, and the like, in an amount not exceeding the lesser of $400 and 4% of
             661      the debt in the plan at the inception of the plan; and]
             662          [(ii) a monthly service fee, not to exceed $10 times the number of accounts remaining
             663      in a plan at the time the fee is assessed, but not more than $50 in any month.]
             664          [(c) A provider may not impose or receive fees under both Subsections (4)(a) and (b).]
             665          (i) the provider has renegotiated, settled, reduced, or otherwise altered the terms of at
             666      least one debt under an agreement executed by the individual;
             667          (ii) the individual has made at least one payment pursuant to that agreement between
             668      the individual and the creditor or debt collector; and
             669          (iii) the fee or consideration for any individual debt that is renegotiated, settled,
             670      reduced, or otherwise altered:
             671          (A) bears the same proportion to the total fee for renegotiating, settling, reducing, or
             672      altering the terms of the entire debt as the individual debt amount at the time the debt was
             673      enrolled in the service bears to the entire debt amount at the time the debt was enrolled in the
             674      service; or
             675          (B) is a percentage of the amount saved as a result of the renegotiation, settlement,
             676      reduction, or alteration, as calculated under Subsection (4)(e), which percentage may not
             677      change from one individual debt to another.
             678          (d) Except as otherwise provided in Subsection 13-42-128 (4), if an individual does not


             679      assent to an agreement, a provider may receive for educational and counseling services it
             680      provides to the individual a fee not exceeding $100 or, with the approval of the administrator, a
             681      larger fee. The administrator may approve a fee larger than $100 if the nature and extent of the
             682      educational and counseling services warrant the larger fee.
             683          (e) For purposes of Subsection (4)(a)(iii)(B), the amount saved is calculated as the
             684      difference between the amount owed at the time the debt is enrolled in the service and the
             685      amount actually paid to satisfy the debt.
             686          (5) If, before the expiration of 90 days after the completion or termination of
             687      educational or counseling services, an individual assents to an agreement, the provider shall
             688      refund to the individual any fee paid pursuant to Subsection (4)(d).
             689          (6) H. [ (a) ] .H Except as otherwise provided in Subsections (3) and (4), if an agreement
             690      contemplates that creditors will settle an individual's debts for less than the principal amount of
             691      the debt H. [ , ] :
             691a          (a) .H compensation for services in connection with settling a debt H. [ may not exceed
             691b      one of
             692      the following applicable settlement fee limits in Subsection (6)(b) or (c), the terms of which
             693      shall be clearly disclosed in the agreement.
] shall be reasonable and clearly disclosed in the

             693a      agreement; and
             693b          (b) a fee for settling a debt may be collected only as the debt is settled.
             694           [ (b) (i) With respect to agreements where a flat settlement fee is charged based on the
             695      overall amount of included debt, total aggregate fees charged may not exceed 17% of the
             696      principal amount of debt included in the agreement[, including any fees charged under
             697      Subsections (4)(b)(i) and (ii)].
             698          (ii) The flat settlement fee authorized under this Subsection (6)(b) [shall be assessed in
             699      equal monthly payments over no less than half of the length of the plan, as estimated at the
             700      plan's inception, unless:] may be collected only upon the settlement of all debt included in the
             701      settlement fee agreement.
             702          [(A) payment is voluntarily accelerated by the individual in a separate record; and]
             703          [(B) at least half of the principal amount of overall debt included in the agreement at its
             704      inception has been settled.]
             705          (c) (i) With respect to agreements where fees are calculated as a percentage of the
             706      amount saved by an individual, a settlement fee may not exceed 30% of the excess of the
             707      outstanding amount of each debt over the amount actually paid to the creditor, as calculated at
             708      the time of settlement.
             709          (ii) Settlement fees authorized under this Subsection (6)(c):


             710          (A) may be collected only as debts are settled; and
             711          (B) the total aggregate amount of fees charged to any individual under this chapter[,
             712      including fees charged under Subsections (4)(b)(i) and (ii),] may not exceed 20% of the
             713      principal amount of debt included in the agreement at the agreement's inception.
             714          (d) A provider may not impose or receive fees under both Subsections (6)(b) and (c).
] .H

             715          (7) Subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), if
             716      a payment to a provider by an individual under this chapter is dishonored, a provider may
             717      impose a reasonable charge on the individual, not to exceed the lesser of $25 and the amount
             718      permitted by law other than this chapter.
             719          Section 10. Section 13-42-126 is amended to read:
             720           13-42-126. Termination of agreements.
             721          (1) If an individual who has entered into an agreement fails for 60 days to make
             722      payments required by the agreement, a provider may terminate the agreement.
             723          (2) If a provider or an individual terminates an agreement, the provider shall
             724      immediately return to the individual:
             725          (a) any money of the individual held in trust for the benefit of the individual, including
             726      any accrued interest; and
             727          (b) 65% of any [portion of the] remaining set-up fee [received pursuant to Subsection
             728      13-42-123 (4)(b) which] that has not been credited against settlement fees.
             729          Section 11. Section 13-42-128 is amended to read:
             730           13-42-128. Prohibited acts and practices.
             731          (1) A provider may not, directly or indirectly:
             732          (a) misappropriate or misapply money held in trust;
             733          (b) settle a debt on behalf of an individual for more than 50% of the principal amount
             734      of the debt owed a creditor, unless the individual assents to the settlement after the creditor has
             735      assented;
             736          (c) take a power of attorney that authorizes it to settle a debt, unless the power of
             737      attorney expressly limits the provider's authority to settle debts for not more than 50% of the
             738      principal amount of the debt owed a creditor;
             739          (d) exercise or attempt to exercise a power of attorney after an individual has
             740      terminated an agreement;


             741          (e) initiate a transfer from an individual's account at a bank or with another person
             742      unless the transfer is:
             743          (i) a return of money to the individual; or
             744          (ii) before termination of an agreement, properly authorized by the agreement and this
             745      chapter, and for:
             746          (A) payment to one or more creditors pursuant to an agreement; or
             747          (B) payment of a fee;
             748          (f) offer a gift or bonus, premium, reward, or other compensation to an individual for
             749      executing an agreement;
             750          (g) offer, pay, or give a gift or bonus, premium, reward, or other compensation to a
             751      person for referring a prospective customer, if the person making the referral has a financial
             752      interest in the outcome of debt-management services provided to the customer, unless neither
             753      the provider nor the person making the referral communicates to the prospective customer the
             754      identity of the source of the referral;
             755          (h) receive a bonus, commission, or other benefit for referring an individual to a
             756      person;
             757          (i) structure a plan in a manner that would result in a negative amortization of any of an
             758      individual's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund
             759      or waive the finance charge upon payment of the principal amount of the debt;
             760          (j) compensate its employees on the basis of a formula that incorporates the number of
             761      individuals the employee induces to enter into agreements;
             762          (k) settle a debt or lead an individual to believe that a payment to a creditor is in
             763      settlement of a debt to the creditor unless, at the time of settlement, the individual:
             764          (i) receives a certification by the creditor that the payment is in full settlement of the
             765      debt; or
             766          (ii) is part of a payment plan, the terms of which are included in the certification, which
             767      upon completion will result in full settlement of the debt;
             768          (l) make a representation that:
             769          (i) the provider will furnish money to pay bills or prevent attachments;
             770          (ii) payment of a certain amount will permit satisfaction of a certain amount or range of
             771      indebtedness; or


             772          (iii) participation in a plan will or may prevent litigation, garnishment, attachment,
             773      repossession, foreclosure, eviction, or loss of employment;
             774          (m) misrepresent that it is authorized or competent to furnish legal advice or perform
             775      legal services;
             776          (n) represent in its agreements, disclosures required by this chapter, advertisements, or
             777      Internet website that it is:
             778          (i) a not-for-profit entity unless it is organized and properly operating as a
             779      not-for-profit entity under the law of the state in which it was formed; or
             780          (ii) a tax-exempt entity unless it has received certification of tax-exempt status from
             781      the Internal Revenue Service and is properly operating as a not-for-profit entity under the law
             782      of the state in which it was formed;
             783          (o) take a confession of judgment or power of attorney to confess judgment against an
             784      individual;
             785          (p) employ an unfair, unconscionable, or deceptive act or practice[, including the
             786      knowing omission of];
             787          (q) knowingly omit any material information[;] or material aspect of any provider's
             788      service, including:
             789          (i) the amount of money or the percentage of the debt amount that an individual may
             790      save by using the provider's service;
             791          (ii) the amount of time necessary to achieve the results that the provider represents as
             792      achievable;
             793          (iii) the amount of money or the percentage of each outstanding debt that the individual
             794      is required to accumulate before the provider will:
             795          (A) initiate an attempt with the individual's creditors or debt collectors to negotiate,
             796      settle, or modify the terms of the individual's debt; or
             797          (B) make a bona fide offer to negotiate, settle, or modify the terms of the individual's
             798      debt;
             799          (iv) the effect of the service on:
             800          (A) an individual's creditworthiness; or
             801          (B) collection efforts of the individual's creditors or debt collectors;
             802          (v) the percentage or number of individuals who achieve the results that the provider


             803      represents are achievable; and
             804          (vi) whether a provider's service is offered or provided by a nonprofit entity; or
             805          [(q)] (r) make or use any untrue or misleading statement:
             806          (i) to the administrator; or
             807          (ii) in the provision of services subject to this chapter.
             808          (2) If a provider furnishes debt-management services to an individual, the provider may
             809      not, directly or indirectly:
             810          (a) purchase a debt or obligation of the individual;
             811          (b) receive from or on behalf of the individual:
             812          (i) a promissory note or other negotiable instrument other than a check or a demand
             813      draft; or
             814          (ii) a post-dated check or demand draft;
             815          (c) lend money or provide credit to the individual, except as a deferral of a settlement
             816      fee at no additional expense to the individual;
             817          (d) obtain a mortgage or other security interest from any person in connection with the
             818      services provided to the individual;
             819          (e) except as permitted by federal law, disclose the identity or identifying information
             820      of the individual or the identity of the individual's creditors, except to:
             821          (i) the administrator, upon proper demand;
             822          (ii) a creditor of the individual, to the extent necessary to secure the cooperation of the
             823      creditor in a plan; or
             824          (iii) the extent necessary to administer the plan;
             825          (f) except as otherwise provided in Subsection 13-42-123 (6), provide the individual
             826      less than the full benefit of a compromise of a debt arranged by the provider;
             827          (g) charge the individual for or provide credit or other insurance, coupons for goods or
             828      services, membership in a club, access to computers or the Internet, or any other matter not
             829      directly related to debt-management services or educational services concerning personal
             830      finance, except to the extent such services are expressly authorized by the administrator; or
             831          (h) furnish legal advice or perform legal services, unless the person furnishing that
             832      advice to or performing those services for the individual is licensed to practice law.
             833          (3) This chapter does not authorize any person to engage in the practice of law.


             834          (4) A provider may not receive a gift or bonus, premium, reward, or other
             835      compensation, directly or indirectly, for advising, arranging, or assisting an individual in
             836      connection with obtaining, an extension of credit or other service from a lender or service
             837      provider, except for educational or counseling services required in connection with a
             838      government-sponsored program.
             839          (5) Unless a person supplies goods, services, or facilities generally and supplies them
             840      to the provider at a cost no greater than the cost the person generally charges to others, a
             841      provider may not purchase goods, services, or facilities from the person if an employee or a
             842      person that the provider should reasonably know is an affiliate of the provider:
             843          (a) owns more than 10% of the person; or
             844          (b) is an employee or affiliate of the person.
             845          Section 12. Section 13-42-130 is amended to read:
             846           13-42-130. Advertising.
             847          (1) If a provider whose agreements contemplate that creditors will reduce finance
             848      charges or fees for late payment, default, or delinquency advertises debt-management services,
             849      it shall disclose, in an easily comprehensible manner, that using a debt-management plan may
             850      make it harder for the individual to obtain credit.
             851          (2) If a provider whose agreements contemplate that creditors will settle for less than
             852      the full principal amount of debt that advertises debt-management services, it shall disclose, in
             853      an easily comprehensible manner:
             854          (a) the information specified in Subsections 13-42-117 (4)[(c)](e) and [(d)] (f); and
             855          (b) the provider's settlement fee structure, consistent with the limitations of Section
             856      13-42-123 .
             857          Section 13. Section 13-42-134 is amended to read:
             858           13-42-134. Suspension, revocation, or nonrenewal of registration.
             859          (1) In this section, "insolvent" means:
             860          (a) having generally ceased to pay debts in the ordinary course of business other than as
             861      a result of good-faith dispute;
             862          (b) being unable to pay debts as they become due; or
             863          (c) being insolvent within the meaning of the federal bankruptcy law, 11 U.S.C.
             864      Section 101 et seq.


             865          (2) The administrator may suspend, revoke, or deny renewal of a provider's registration
             866      if:
             867          (a) a fact or condition exists that, if it had existed when the registrant applied for
             868      registration as a provider, would have been a reason for denying registration;
             869          (b) the provider has committed a material violation of this chapter or a rule or order of
             870      the administrator under this chapter;
             871          (c) the provider is insolvent;
             872          (d) the provider or an employee or affiliate of the provider has refused to permit the
             873      administrator to make an examination authorized by this chapter, failed to comply with
             874      Subsection 13-42-132 (2)(b) within 15 days after request, or made a material misrepresentation
             875      or omission in complying with Subsection 13-42-132 (2)(b); or
             876          (e) the provider has not responded within a reasonable time and in an appropriate
             877      manner to communications from the administrator.
             878          (3) If a provider becomes insolvent, the provider shall continue to provide
             879      debt-management services to an individual with whom the provider has an agreement until:
             880          (a) with the administrator's approval, the provider transfers the agreement to another
             881      registered provider; or
             882          (b) the provider returns to the individual all unexpended money that is under the
             883      provider's control.
             884          [(3)] (4) If a provider does not comply with Subsection 13-42-122 (6) or if the
             885      administrator otherwise finds that the public health or safety or general welfare requires
             886      emergency action, the administrator may order a summary suspension of the provider's
             887      registration, effective on the date specified in the order.
             888          [(4)] (5) If the administrator suspends, revokes, or denies renewal of the registration of
             889      a provider, the administrator may seek a court order authorizing seizure of any or all of the
             890      money in a trust account required by Section 13-42-122 , books, records, accounts, and other
             891      property of the provider which are located in this state.
             892          [(5)] (6) If the administrator suspends or revokes a provider's registration, the provider
             893      may appeal and request a hearing pursuant to Title 63G, Chapter 4, Administrative Procedures
             894      Act.





Legislative Review Note
    as of 12-29-11 12:30 PM


Office of Legislative Research and General Counsel


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