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First Substitute H.B. 78

Senator Patricia W. Jones proposes the following substitute bill:


             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 and modifies a provision relating to service of process under
             16      that act;
             17          .    modifies dollar threshold amounts for purposes of plans subject to the Business
             18      Opportunity Disclosure Act;
             19          .    modifies the definition of "telephone solicitation" for purposes of the Telephone
             20      Fraud Prevention Act; and
             21          .    modifies the Uniform Debt-Management Services Act, including to:
             22              .    modify provisions relating to an application for registration as a
             23      debt-management service provider, renewal application, and the suspension,
             24      revocation, or nonrenewal of registration;
             25              .    modify provisions relating to bonds required to be provided by registered


             26      providers;
             27              .    modify a provision relating to prerequisites before providing debt-management
             28      services;
             29              .    modify provisions relating to debt-management service agreements;
             30              .    modify provisions relating to fees and other charges;
             31              .    repeal a provision relating to cancellation of an agreement and replace it with a
             32      provision relating to terminating an agreement;
             33              .    repeal a provision relating to termination of an agreement and replace it with a
             34      provision relating to retention of records;
             35              .    modify a provision relating to required accountings;
             36              .    modify provisions relating to prohibited acts and provider liability; and
             37              .    modify administrative remedy provisions; and
             38          .    makes technical changes.
             39      Money Appropriated in this Bill:
             40          None
             41      Other Special Clauses:
             42          None
             43      Utah Code Sections Affected:
             44      AMENDS:
             45          13-11-4, as last amended by Laws of Utah 2010, Chapter 54
             46          13-11-6, as last amended by Laws of Utah 2010, Chapter 378
             47          13-15-2, as last amended by Laws of Utah 2001, Chapter 196
             48          13-26-2, as last amended by Laws of Utah 2005, Chapter 18
             49          13-42-102, as enacted by Laws of Utah 2006, Chapter 154
             50          13-42-105, as last amended by Laws of Utah 2010, Chapter 378
             51          13-42-106, as last amended by Laws of Utah 2010, Chapter 378
             52          13-42-107, as enacted by Laws of Utah 2006, Chapter 154
             53          13-42-110, as last amended by Laws of Utah 2008, Chapter 382
             54          13-42-111, as last amended by Laws of Utah 2010, Chapters 218 and 378
             55          13-42-112, as last amended by Laws of Utah 2008, Chapter 382
             56          13-42-113, as last amended by Laws of Utah 2010, Chapter 378


             57          13-42-114, as last amended by Laws of Utah 2009, Chapter 229
             58          13-42-117, as last amended by Laws of Utah 2010, Chapter 378
             59          13-42-118, as last amended by Laws of Utah 2010, Chapter 378
             60          13-42-119, as last amended by Laws of Utah 2010, Chapter 378
             61          13-42-121, as last amended by Laws of Utah 2010, Chapter 378
             62          13-42-122, as last amended by Laws of Utah 2010, Chapter 378
             63          13-42-123, as last amended by Laws of Utah 2009, Chapter 229
             64          13-42-127, as enacted by Laws of Utah 2006, Chapter 154
             65          13-42-128, as last amended by Laws of Utah 2009, Chapter 229
             66          13-42-130, as last amended by Laws of Utah 2009, Chapter 229
             67          13-42-131, as enacted by Laws of Utah 2006, Chapter 154
             68          13-42-132, as last amended by Laws of Utah 2010, Chapter 378
             69          13-42-133, as enacted by Laws of Utah 2006, Chapter 154
             70          13-42-134, as last amended by Laws of Utah 2008, Chapter 382
             71          13-42-135, as enacted by Laws of Utah 2006, Chapter 154
             72          13-42-137, as last amended by Laws of Utah 2010, Chapter 378
             73          13-42-139, as enacted by Laws of Utah 2006, Chapter 154
             74      REPEALS AND REENACTS:
             75          13-42-120, as last amended by Laws of Utah 2010, Chapter 378
             76          13-42-126, as enacted by Laws of Utah 2006, Chapter 154
             77     
             78      Be it enacted by the Legislature of the state of Utah:
             79          Section 1. Section 13-11-4 is amended to read:
             80           13-11-4. Deceptive act or practice by supplier.
             81          (1) A deceptive act or practice by a supplier in connection with a consumer transaction
             82      violates this chapter whether it occurs before, during, or after the transaction.
             83          (2) Without limiting the scope of Subsection (1), a supplier commits a deceptive act or
             84      practice if the supplier knowingly or intentionally:
             85          (a) indicates that the subject of a consumer transaction has sponsorship, approval,
             86      performance characteristics, accessories, uses, or benefits, if it has not;
             87          (b) indicates that the subject of a consumer transaction is of a particular standard,


             88      quality, grade, style, or model, if it is not;
             89          (c) indicates that the subject of a consumer transaction is new, or unused, if it is not, or
             90      has been used to an extent that is materially different from the fact;
             91          (d) indicates that the subject of a consumer transaction is available to the consumer for
             92      a reason that does not exist, including any of the following reasons falsely used in an
             93      advertisement:
             94          (i) "going out of business";
             95          (ii) "bankruptcy sale";
             96          (iii) "lost our lease";
             97          (iv) "building coming down";
             98          (v) "forced out of business";
             99          (vi) "final days";
             100          (vii) "liquidation sale";
             101          (viii) "fire sale";
             102          (ix) "quitting business"; or
             103          (x) an expression similar to any of the expressions in Subsections (2)(d)(i) through
             104      (ix);
             105          (e) indicates that the subject of a consumer transaction has been supplied in accordance
             106      with a previous representation, if it has not;
             107          (f) indicates that the subject of a consumer transaction will be supplied in greater
             108      quantity than the supplier intends;
             109          (g) indicates that replacement or repair is needed, if it is not;
             110          (h) indicates that a specific price advantage exists, if it does not;
             111          (i) indicates that the supplier has a sponsorship, approval, or affiliation the supplier
             112      does not have;
             113          (j) (i) indicates that a consumer transaction involves or does not involve a warranty, a
             114      disclaimer of warranties, particular warranty terms, or other rights, remedies, or obligations, if
             115      the representation is false; or
             116          (ii) fails to honor a warranty or a particular warranty term;
             117          (k) indicates that the consumer will receive a rebate, discount, or other benefit as an
             118      inducement for entering into a consumer transaction in return for giving the supplier the names


             119      of prospective consumers or otherwise helping the supplier to enter into other consumer
             120      transactions, if receipt of the benefit is contingent on an event occurring after the consumer
             121      enters into the transaction;
             122          (l) after receipt of payment for goods or services, fails to ship the goods or furnish the
             123      services within the time advertised or otherwise represented or, if no specific time is advertised
             124      or represented, fails to ship the goods or furnish the services within 30 days, unless within the
             125      applicable time period the supplier provides the buyer with the option to:
             126          (i) cancel the sales agreement and receive a refund of all previous payments to the
             127      supplier if the refund is mailed or delivered to the buyer within 10 business days after the day
             128      on which the seller receives written notification from the buyer of the buyer's intent to cancel
             129      the sales agreement and receive the refund; or
             130          (ii) extend the shipping date to a specific date proposed by the supplier;
             131          (m) except as provided in Subsection (3)(b), fails to furnish a notice meeting the
             132      requirements of Subsection (3)(a) of the purchaser's right to cancel a direct solicitation sale
             133      within three business days of the time of purchase if:
             134          (i) the sale is made other than at the supplier's established place of business pursuant to
             135      the supplier's personal contact, whether through mail, electronic mail, facsimile transmission,
             136      telephone, or any other form of direct solicitation; and
             137          (ii) the sale price exceeds $25;
             138          (n) promotes, offers, or grants participation in a pyramid scheme as defined under Title
             139      76, Chapter 6a, Pyramid Scheme Act;
             140          (o) represents that the funds or property conveyed in response to a charitable
             141      solicitation will be donated or used for a particular purpose or will be donated to or used by a
             142      particular organization, if the representation is false;
             143          (p) if a consumer indicates the consumer's intention of making a claim for a motor
             144      vehicle repair against the consumer's motor vehicle insurance policy:
             145          (i) commences the repair without first giving the consumer oral and written notice of:
             146          (A) the total estimated cost of the repair; and
             147          (B) the total dollar amount the consumer is responsible to pay for the repair, which
             148      dollar amount may not exceed the applicable deductible or other copay arrangement in the
             149      consumer's insurance policy; or


             150          (ii) requests or collects from a consumer an amount that exceeds the dollar amount a
             151      consumer was initially told the consumer was responsible to pay as an insurance deductible or
             152      other copay arrangement for a motor vehicle repair under Subsection (2)(p)(i), even if that
             153      amount is less than the full amount the motor vehicle insurance policy requires the insured to
             154      pay as a deductible or other copay arrangement, unless:
             155          (A) the consumer's insurance company denies that coverage exists for the repair, in
             156      which case, the full amount of the repair may be charged and collected from the consumer; or
             157          (B) the consumer misstates, before the repair is commenced, the amount of money the
             158      insurance policy requires the consumer to pay as a deductible or other copay arrangement, in
             159      which case, the supplier may charge and collect from the consumer an amount that does not
             160      exceed the amount the insurance policy requires the consumer to pay as a deductible or other
             161      copay arrangement;
             162          (q) includes in any contract, receipt, or other written documentation of a consumer
             163      transaction, or any addendum to any contract, receipt, or other written documentation of a
             164      consumer transaction, any confession of judgment or any waiver of any of the rights to which a
             165      consumer is entitled under this chapter;
             166          (r) charges a consumer for a consumer transaction or a portion of a consumer
             167      transaction that has not previously been agreed to by the consumer;
             168          (s) solicits or enters into a consumer transaction with a person who lacks the mental
             169      ability to comprehend the nature and consequences of:
             170          (i) the consumer transaction; or
             171          (ii) the person's ability to benefit from the consumer transaction;
             172          (t) solicits for the sale of a product or service by providing a consumer with an
             173      unsolicited check or negotiable instrument the presentment or negotiation of which obligates
             174      the consumer to purchase a product or service, unless the supplier is:
             175          (i) a depository institution under Section 7-1-103 ;
             176          (ii) an affiliate of a depository institution; or
             177          (iii) an entity regulated under Title 7, Financial Institutions Act;
             178          (u) sends an unsolicited mailing to a person that appears to be a billing, statement, or
             179      request for payment for a product or service the person has not ordered or used, or that implies
             180      that the mailing requests payment for an ongoing product or service the person has not received


             181      or requested;
             182          (v) issues a gift certificate, instrument, or other record in exchange for payment to
             183      provide the bearer, upon presentation, goods or services in a specified amount without printing
             184      in a readable manner on the gift certificate, instrument, packaging, or record any expiration
             185      date or information concerning a fee to be charged and deducted from the balance of the gift
             186      certificate, instrument, or other record; or
             187          (w) misrepresents the geographical origin or location of the supplier's business [in
             188      connection with the sale of cut flowers, flower arrangements, or floral products].
             189          (3) (a) The notice required by Subsection (2)(m) shall:
             190          (i) be a conspicuous statement written in dark bold with at least 12-point type on the
             191      first page of the purchase documentation; and
             192          (ii) read as follows: "YOU, THE BUYER, MAY CANCEL THIS CONTRACT AT
             193      ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY (or time period
             194      reflecting the supplier's cancellation policy but not less than three business days) AFTER THE
             195      DATE OF THE TRANSACTION OR RECEIPT OF THE PRODUCT, WHICHEVER IS
             196      LATER".
             197          (b) A supplier is exempt from the requirements of Subsection (2)(m) if the supplier's
             198      cancellation policy:
             199          (i) is communicated to the buyer; and
             200          (ii) offers greater rights to the buyer than Subsection (2)(m).
             201          (4) (a) A gift certificate, instrument, or other record that does not print an expiration
             202      date in accordance with Subsection (2)(v) does not expire.
             203          (b) A gift certificate, instrument, or other record that does not include printed
             204      information concerning a fee to be charged and deducted from the balance of the gift
             205      certificate, instrument, or other record is not subject to the charging and deduction of the fee.
             206          (c) Subsections (2)(v) and (4)(b) do not apply to a gift certificate, instrument, or other
             207      record useable at multiple, unaffiliated sellers of goods or services if an expiration date is
             208      printed on the gift certificate, instrument, or other record.
             209          Section 2. Section 13-11-6 is amended to read:
             210           13-11-6. Service of process.
             211          (1) In addition to any other method provided by rule or statute, personal jurisdiction


             212      over a supplier may be acquired in a civil action or proceeding instituted in the district court by
             213      the service of process [in the following manner. If a] as provided in Subsection (3).
             214          (2) (a) A supplier that engages in any act or practice in this state governed by this [act]
             215      chapter, or engages in a consumer transaction subject to this [act, he] chapter, may designate an
             216      agent upon whom service of process may be made in [this] the state. [The agent]
             217          (b) A designation of an agent under Subsection (2)(a) shall be in writing and filed with
             218      the Division of Corporations and Commercial Code.
             219          (c) An agent designated under this Subsection (2) shall be a resident of or a corporation
             220      authorized to do business in [this] the state. [The designation shall be in writing and filed with
             221      the Division of Corporations and Commercial Code. If no]
             222          (3) (a) Subject to Subsection (3)(b), process upon a supplier may be served as provided
             223      in Section 16-17-301 if:
             224          (i) a designation is not made and filed[,] under Subsection (2); or [if]
             225          (ii) process cannot be served in [this] the state upon the designated agent[, whether or
             226      not the supplier is a resident of this state or is authorized to do business in this state, process
             227      may be served upon the director of the Division of Corporations and Commercial Code, but
             228      service upon him].
             229          (b) Service upon a supplier is not effective unless the plaintiff promptly mails a copy of
             230      the process and pleadings by registered or certified mail to the defendant at [his] the
             231      defendant's last reasonably ascertainable address. [An]
             232          (c) The plaintiff shall file an affidavit of compliance with this section [shall be filed]:
             233          (i) with the clerk of the court; and
             234          (ii) on or before the return day of the process, if any, or within any future time the court
             235      allows.
             236          Section 3. Section 13-15-2 is amended to read:
             237           13-15-2. Definitions.
             238          As used in this chapter:
             239          (1) (a) "Assisted marketing plan" means the sale or lease of any products, equipment,
             240      supplies, or services that are sold to the purchaser upon payment of an initial required
             241      consideration of [$300] $500 or more for the purpose of enabling the purchaser to start a
             242      business, and in which the seller represents:


             243          (i) that the seller will provide locations or assist the purchaser in finding locations for
             244      the use or operation of vending machines, racks, display cases, or other similar devices, or
             245      currency operated amusement machines or devices, on premises neither owned nor leased by
             246      the purchaser or seller;
             247          (ii) that the seller will purchase any or all products made, produced, fabricated, grown,
             248      or modified by the purchaser, using in whole or in part the supplies, services, or chattels sold to
             249      the purchaser;
             250          (iii) that the seller will provide the purchaser with a guarantee that the purchaser will
             251      receive income from the assisted marketing plan that exceeds the price paid for the assisted
             252      marketing plan, or repurchase any of the products, equipment, supplies, or chattels supplied by
             253      the seller if the purchaser is dissatisfied with the assisted marketing plan; or
             254          (iv) that upon payment by the purchaser of a fee or sum of money, which exceeds
             255      [$300] $500 to the seller, the seller will provide a sales program or marketing program that will
             256      enable the purchaser to derive income from the assisted marketing plan that exceeds the price
             257      paid for the marketing plan.
             258          (b) "Assisted marketing plan" does not include:
             259          (i) the sale of an ongoing business when the owner of that business sells and intends to
             260      sell only that one assisted marketing plan;
             261          (ii) not-for-profit sale of sales demonstration equipment, materials, or samples for a
             262      total price of [$300] $500 or less; or
             263          (iii) the sale of a package franchise or a product franchise defined by and in compliance
             264      with Federal Trade Commission rules governing franchise and business opportunity ventures.
             265          (c) As used in Subsection (1)(a)(iii) "guarantee" means a written agreement, signed by
             266      the purchaser and seller, disclosing the complete details and any limitations or exceptions of
             267      the agreement.
             268          (2) "Business opportunity" means an assisted marketing plan subject to this chapter.
             269          (3) "Division" means the Division of Consumer Protection of the Department of
             270      Commerce.
             271          (4) (a) "Initial required consideration" means the total amount a purchaser is obligated
             272      to pay under the terms of the assisted marketing plan, either prior to or at the time of delivery
             273      of the products, equipment, supplies, or services, or within six months of the commencement


             274      of operation of the assisted marketing plan by the purchaser. If payment is over a period of
             275      time, "initial required consideration" means the sum of the down payment and the total
             276      monthly payments.
             277          (b) "Initial required consideration" does not mean the not-for-profit sale of sales
             278      demonstration equipment, materials, or supplies for a total price of less than [$300] $500.
             279          (5) "Person" means any natural person, corporation, partnership, organization,
             280      association, trust, or any other legal entity.
             281          (6) "Purchaser" means a person who becomes obligated to pay for an assisted
             282      marketing plan.
             283          (7) "Registered trademark" or "service mark" means a trademark, trade name, or
             284      service mark registered with the United States Patent and Trademark Office, or Utah, or the
             285      state of incorporation if a corporation.
             286          (8) "Seller" means a person who sells or offers to sell an assisted marketing plan.
             287          Section 4. Section 13-26-2 is amended to read:
             288           13-26-2. Definitions.
             289          As used in this chapter, unless the context otherwise requires:
             290          (1) "Continuity plan" means a shipment, with the prior express consent of the buyer, at
             291      regular intervals of similar special-interest products. A continuity plan is distinguished from a
             292      subscription arrangement by no binding commitment period or purchase amount.
             293          (2) "Division" means the Division of Consumer Protection.
             294          (3) "Fictitious personal name" means a name other than an individual's true name. An
             295      "individual's true name" is the name taken at birth unless changed by operation of law or by
             296      civil action.
             297          (4) "Material statement" or "material fact" means information that a person of ordinary
             298      intelligence or prudence would consider important in deciding whether or not to accept an offer
             299      extended through a telephone solicitation.
             300          (5) "Premium" means a gift, bonus, prize, award, certificate, or other document by
             301      which a prospective purchaser is given a right, chance, or privilege to purchase or receive
             302      goods or services with a stated or represented value of $25 or more as an inducement to a
             303      prospective purchaser to purchase other goods or services.
             304          (6) "Subscription arrangements," "standing order arrangements," "supplements," and


             305      "series arrangements" mean products or services provided, with the prior express request or
             306      consent of the buyer, for a specified period of time at a price dependent on the duration of
             307      service and to complement an initial purchase.
             308          (7) (a) "Telephone solicitation," "sale," "selling," or "solicitation of sale" means:
             309          (i) a sale or solicitation of goods or services in which:
             310          (A) (I) the seller solicits the sale over the telephone;
             311          (II) the purchaser's agreement to purchase is made over the telephone; and
             312          (III) the purchaser, over the telephone, pays for or agrees to commit to payment for
             313      goods or services prior to or upon receipt by the purchaser of the goods or services;
             314          (B) the solicitor, not exempt under Section 13-26-4 , induces a prospective purchaser
             315      over the telephone, to make and keep an appointment that directly results in the purchase of
             316      goods or services by the purchaser that would not have occurred without the telephone
             317      solicitation and inducement by the solicitor;
             318          (C) the seller offers or promises a premium to a prospective purchaser if:
             319          (I) the seller induces the prospective purchaser to initiate a telephone contact with the
             320      telephone soliciting business; and
             321          (II) the resulting solicitation meets the requirements of Subsection (7)(a); or
             322          (D) the solicitor solicits a charitable donation involving the exchange of any premium,
             323      prize, gift, ticket, subscription, or other benefit in connection with any appeal made for a
             324      charitable purpose by an organization that is not otherwise exempt under Subsection
             325      13-26-4 (2)(b)(iv); or
             326          (ii) a telephone solicitation as defined in Section 13-25a-102 .
             327          (b) "Telephone solicitation," "sale," "selling," or "solicitation of sale" does not include
             328      a sale or solicitation that occurs solely through an Internet website without the use of a
             329      telephone call.
             330          [(b)] (c) A solicitation of sale or telephone solicitation is considered complete when
             331      made, whether or not the person receiving the solicitation agrees to the sale or to make a
             332      charitable donation.
             333          (8) "Telephone soliciting business" means a sole proprietorship, partnership, limited
             334      liability company, corporation, or other association of individuals engaged in a common effort
             335      to conduct telephone solicitations.


             336          (9) "Telephone solicitor" or "solicitor" means a person, partnership, limited liability
             337      company, corporation, or other entity that:
             338          (a) makes a telephone solicitation; or
             339          (b) causes a telephone solicitation to be made.
             340          Section 5. Section 13-42-102 is amended to read:
             341           13-42-102. Definitions.
             342          In this chapter:
             343          (1) "Administrator" means the Division of Consumer Protection.
             344          (2) "Affiliate":
             345          (a) with respect to an individual, means:
             346          (i) the spouse of the individual;
             347          (ii) a sibling of the individual or the spouse of a sibling;
             348          (iii) an individual or the spouse of an individual who is a lineal ancestor or lineal
             349      descendant of the individual or the individual's spouse;
             350          (iv) an aunt, uncle, great aunt, great uncle, first cousin, niece, nephew, grandniece, or
             351      grandnephew, whether related by the whole or the half blood or adoption, or the spouse of any
             352      of them; or
             353          (v) any other individual occupying the residence of the individual; and
             354          (b) with respect to an entity, means:
             355          (i) a person that directly or indirectly controls, is controlled by, or is under common
             356      control with the entity;
             357          (ii) an officer of, or an individual performing similar functions with respect to, the
             358      entity;
             359          (iii) a director of, or an individual performing similar functions with respect to, the
             360      entity;
             361          (iv) subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), a
             362      person that receives or received more than $25,000 from the entity for debt management
             363      services in either the current year or the preceding year or a person that owns more than 10%
             364      of, or an individual who is employed by or is a director of, a person that receives or received
             365      more than $25,000 from the entity for debt management services in either the current year or
             366      the preceding year;


             367          (v) an officer or director of, or an individual performing similar functions with respect
             368      to, a person described in Subsection (2)(b)(i);
             369          (vi) the spouse of, or an individual occupying the residence of, an individual described
             370      in Subsections (2)(b)(i) through (v); or
             371          (vii) an individual who has the relationship specified in Subsection (2)(a)(iv) to an
             372      individual or the spouse of an individual described in Subsections (2)(b)(i) through (v).
             373          (3) "Agreement" means an agreement between a provider and an individual for the
             374      performance of debt-management services.
             375          (4) "Bank" means a financial institution, including a commercial bank, savings bank,
             376      savings and loan association, credit union, and trust company, engaged in the business of
             377      banking, chartered under federal or state law, and regulated by a federal or state banking
             378      regulatory authority.
             379          (5) "Business address" means the physical location of a business, including the name
             380      and number of a street.
             381          (6) "Certified counselor" means an individual certified by a training program or
             382      certifying organization, approved by the administrator, that authenticates the competence of
             383      individuals providing education and assistance to other individuals in connection with
             384      debt-management services.
             385          (7) "Concessions" means assent to repayment of a debt on terms more favorable to an
             386      individual than the terms of the contract between the individual and a creditor.
             387          (8) "Day" means calendar day.
             388          (9) "Debt-management services" means services as an intermediary between an
             389      individual and one or more creditors of the individual for the purpose of obtaining concessions,
             390      but does not include:
             391          (a) legal services provided in an attorney-client relationship if:
             392          (i) the services are provided by an attorney who:
             393          (A) is licensed or otherwise authorized to practice law in this state; and
             394          (B) provides legal services in representing the individual in the individual's relationship
             395      with a creditor; and
             396          (ii) there is no intermediary between the individual and the creditor other than the
             397      attorney or an individual under the direct supervision of the attorney;


             398          (b) accounting services provided in an accountant-client relationship if:
             399          (i) the services are provided by a certified public accountant who:
             400          (A) is licensed to provide accounting services in this state; [or] and
             401          (B) provides accounting services in representing the individual in the individual's
             402      relationship with a creditor; and
             403          (ii) there is no intermediary between the individual and the creditor other than the
             404      accountant or an individual under the direct supervision of the accountant; or
             405          (c) financial-planning services provided in a financial planner-client relationship by a
             406      member of a financial-planning profession [whose members] if:
             407          (i) the administrator, by rule, determines that members are:
             408          [(i)] (A) licensed by this state;
             409          [(ii)] (B) subject to a disciplinary mechanism;
             410          [(iii)] (C) subject to a code of professional responsibility; and
             411          [(iv)] (D) subject to a continuing education requirement[.]; and
             412          (ii) there is no intermediary between the individual and the creditor other than the
             413      financial planner or an individual under the direct supervision of the financial planner.
             414          (10) "Entity" means a person other than an individual.
             415          (11) "Good faith" means honesty in fact and the observance of reasonable standards of
             416      fair dealing.
             417          (12) "Lead generator" means a person who, in the regular course of business, supplies a
             418      provider with the name of a potential customer, directs a communication of an individual to a
             419      provider, or otherwise refers a customer to a provider.
             420          [(12)] (13) "Person" means an individual, corporation, business trust, estate, trust,
             421      partnership, limited liability company, association, joint venture, or any other legal or
             422      commercial entity. The term does not include a public corporation, government, or
             423      governmental subdivision, agency, or instrumentality.
             424          [(13)] (14) "Plan" means a program or strategy in which a provider furnishes
             425      debt-management services to an individual and which includes a schedule of payments to be
             426      made by or on behalf of the individual and used to pay debts owed by the individual.
             427          [(14)] (15) "Principal amount of the debt" means the amount of a debt at the time of an
             428      agreement.


             429          [(15)] (16) "Provider" means a person that provides, offers to provide, or agrees to
             430      provide debt-management services directly or through others.
             431          [(16)] (17) "Record" means information that is inscribed on a tangible medium or that
             432      is stored in an electronic or other medium and is retrievable in perceivable form.
             433          [(17)] (18) "Settlement fee" means a charge imposed on or paid by an individual in
             434      connection with a creditor's assent to accept in full satisfaction of a debt an amount less than
             435      the principal amount of the debt.
             436          [(18)] (19) "Sign" means, with present intent to authenticate or adopt a record:
             437          (a) to execute or adopt a tangible symbol; or
             438          (b) to attach to or logically associate with the record an electronic sound, symbol, or
             439      process.
             440          [(19)] (20) "State" means a state of the United States, the District of Columbia, Puerto
             441      Rico, the United States Virgin Islands, or any territory or insular possession subject to the
             442      jurisdiction of the United States.
             443          [(20)] (21) "Trust account" means an account held by a provider that is:
             444          (a) established in [an insured] a bank in which deposit accounts are insured;
             445          (b) separate from other accounts of the provider or its designee;
             446          (c) designated as a trust account or other account designated to indicate that the money
             447      in the account is not the money of the provider or its designee; and
             448          (d) used to hold money of one or more individuals for disbursement to creditors of the
             449      individuals.
             450          Section 6. Section 13-42-105 is amended to read:
             451           13-42-105. Application for registration -- Form, fee, and accompanying
             452      documents.
             453          (1) An application for registration as a provider shall be in a form prescribed by the
             454      administrator.
             455          (2) Subject to adjustment of dollar amounts pursuant to Subsection 13-42-132 (6), an
             456      application for registration as a provider shall be accompanied by:
             457          (a) the fee established by the administrator in accordance with Section 63J-1-504 ;
             458          (b) the bond required by Section 13-42-113 ;
             459          (c) identification of all trust accounts [required by] subject to Section 13-42-122 and an


             460      irrevocable consent authorizing the administrator to review and examine the trust accounts;
             461          (d) evidence of insurance in the amount of $250,000:
             462          (i) against the risks of dishonesty, fraud, theft, and other misconduct on the part of the
             463      applicant or a director, employee, or agent of the applicant;
             464          (ii) issued by an insurance company authorized to do business in this state and rated at
             465      least A or equivalent by a nationally recognized rating organization approved by the
             466      administrator;
             467          (iii) with a deductible not exceeding $5,000;
             468          (iv) payable [for the benefit of] to the applicant[,] and this state[, and individuals who
             469      are] for the benefit of the residents of this state, as their interests may appear; and
             470          (v) not subject to cancellation by the applicant or the insurer until 60 days after written
             471      notice has been given to the administrator;
             472          (e) a record consenting to the jurisdiction of this state containing:
             473          (i) the name, business address, and other contact information of its registered agent in
             474      this state for purposes of service of process; or
             475          (ii) the appointment of the administrator as agent of the provider for purposes of
             476      service of process; and
             477          (f) if the applicant is organized as a not-for-profit entity or [is exempt from taxation]
             478      has obtained tax exempt status under the Internal Revenue Code, 26 U.S.C. Section 501,
             479      evidence of not-for-profit [and] or tax-exempt status [applicable to the applicant under the
             480      Internal Revenue Code, 26 U.S.C. Section 501], or both.
             481          (3) (a) The administrator may waive or reduce the insurance requirement in Subsection
             482      [ 13-42-105 ](2)(d) if the provider does not:
             483          (i) maintain control of a trust account or receive money paid by an individual pursuant
             484      to a plan for distribution to creditors;
             485          (ii) make payments to creditors on behalf of individuals;
             486          (iii) collect fees by means of automatic payment from individuals; and
             487          (iv) execute any powers of attorney that may be utilized by the provider to collect fees
             488      from or expend funds on behalf of an individual.
             489          (b) A waiver or reduction in insurance requirements allowed by the administrator under
             490      Subsection (3)(a) shall balance the reduction in risk posed by a provider meeting the stated


             491      requirements against any continued need for insurance against employee and director
             492      dishonesty.
             493          Section 7. Section 13-42-106 is amended to read:
             494           13-42-106. Application for registration -- Required information.
             495          An application for registration as a provider shall be signed under penalty of perjury
             496      and include:
             497          (1) the applicant's name, principal business address and telephone number, and all
             498      other business addresses in this state, electronic-mail addresses, and Internet website addresses;
             499          (2) all names under which the applicant conducts business;
             500          (3) the address of each location in this state at which the applicant will provide
             501      debt-management services or a statement that the applicant will have no such location;
             502          (4) the name and home address of each officer and director of the applicant and each
             503      person that owns at least 10% of the applicant;
             504          (5) identification of every jurisdiction in which, during the five years immediately
             505      preceding the application:
             506          (a) the applicant or any of its officers or directors has been licensed or registered to
             507      provide debt-management services; or
             508          (b) individuals have resided when they received debt-management services from the
             509      applicant;
             510          (6) a statement describing, to the extent it is known or should be known by the
             511      applicant, any material civil or criminal judgment or litigation and any material administrative
             512      or enforcement action by a governmental agency in any jurisdiction against the applicant, any
             513      of its officers, directors, owners, or agents, or any person who is authorized to have access to
             514      the trust account required by Section 13-42-122 ;
             515          (7) the applicant's financial statements, audited by an accountant licensed to conduct
             516      audits, for each of the two years immediately preceding the application or, if it has not been in
             517      operation for the two years preceding the application, for the period of its existence;
             518          (8) evidence of accreditation by an independent accrediting organization approved by
             519      the administrator;
             520          (9) evidence that, [within] no later than 12 months after initial employment, each of the
             521      applicant's counselors becomes certified as a certified counselor;


             522          (10) a description of the three most commonly used educational programs that the
             523      applicant provides or intends to provide to individuals who reside in this state and a copy of
             524      any materials used or to be used in those programs;
             525          (11) a description of the applicant's financial analysis and initial budget plan, including
             526      any form or electronic model, used to evaluate the financial condition of individuals;
             527          (12) a copy of each form of agreement that the applicant will use with individuals who
             528      reside in this state;
             529          (13) the schedule of fees and charges that the applicant will use with individuals who
             530      reside in this state;
             531          (14) at the applicant's expense, the results of a criminal records check, including
             532      fingerprints, conducted within the immediately preceding 12 months, covering every officer of
             533      the applicant and every employee or agent of the applicant who is authorized to have access to
             534      the trust account required by Section 13-42-122 ;
             535          (15) the names and addresses of all employers of each director during the 10 years
             536      immediately preceding the application;
             537          (16) a description of any ownership interest of at least 10% by a director, owner, or
             538      employee of the applicant in:
             539          (a) any affiliate of the applicant; or
             540          (b) any entity that provides products or services to the applicant or any individual
             541      relating to the applicant's debt-management services;
             542          (17) a statement of the amount of compensation of the applicant's five most highly
             543      compensated employees for each of the three years immediately preceding the application or, if
             544      it has not been in operation for the three years preceding the application, for the period of its
             545      existence;
             546          (18) the identity of each director who is an affiliate, as defined in Subsection
             547      13-42-102 (2)(a) or (2)(b)(i), (ii), (iv), (v), (vi), or (vii), of the applicant; and
             548          (19) any other information that the administrator reasonably requires to perform the
             549      administrator's duties under Section 13-42-109 .
             550          Section 8. Section 13-42-107 is amended to read:
             551           13-42-107. Application for registration -- Obligation to update information.
             552          An applicant or registered provider shall notify the administrator [within] no later than


             553      10 days after a change in the information specified in Subsection 13-42-105 (2)(d) or (f) or
             554      Subsection 13-42-106 (1), (3), (6), (12), or (13).
             555          Section 9. Section 13-42-110 is amended to read:
             556           13-42-110. Certificate of registration -- Timing.
             557          (1) The administrator shall approve or deny an initial registration as a provider [within]
             558      no later than 120 days after an application is filed. In connection with a request pursuant to
             559      Subsection 13-42-106 (19) for additional information, the administrator may extend the 120-day
             560      period for not more than 60 days. Within seven days after denying an application, the
             561      administrator, in a record, shall inform the applicant of the reasons for the denial.
             562          (2) If the administrator denies an application for registration as a provider or does not
             563      act on an application within the time prescribed in Subsection (1), the applicant may appeal and
             564      request a hearing pursuant to Title 63G, Chapter 4, Administrative Procedures Act.
             565          (3) Subject to Subsection 13-42-111 (4) and Section 13-42-134 , a registration as a
             566      provider is valid for one year.
             567          Section 10. Section 13-42-111 is amended to read:
             568           13-42-111. Renewal of registration.
             569          (1) A provider shall obtain a renewal of its registration annually.
             570          (2) An application for renewal of registration as a provider shall be in a form
             571      prescribed by the administrator, signed under penalty of perjury, and:
             572          (a) be filed no fewer than 30 and no more than 60 days before the registration expires;
             573          (b) be accompanied by the fee established by the administrator in accordance with
             574      Section 63J-1-504 and the bond required by Section 13-42-113 ;
             575          (c) contain the matter required for initial registration as a provider by Subsections
             576      13-42-106 (8) and (9) and a financial statement, audited by an accountant licensed to conduct
             577      audits, for the applicant's fiscal year immediately preceding the application;
             578          (d) disclose any changes in the information contained in the applicant's application for
             579      registration or its immediately previous application for renewal, as applicable;
             580          (e) supply evidence of insurance in an amount equal to the larger of $250,000 or the
             581      highest daily balance in the trust account required by Section 13-42-122 during the six-month
             582      period immediately preceding the application:
             583          (i) against risks of dishonesty, fraud, theft, and other misconduct on the part of the


             584      applicant or a director, employee, or agent of the applicant;
             585          (ii) issued by an insurance company authorized to do business in this state and rated at
             586      least [A] A- or equivalent by a nationally recognized rating organization approved by the
             587      administrator;
             588          (iii) with a deductible not exceeding $5,000;
             589          (iv) payable [for the benefit of] to the applicant[,] and this state[, and individuals who
             590      are] for the benefit of the residents of this state, as their interests may appear; and
             591          (v) not subject to cancellation by the applicant or the insurer until 60 days after written
             592      notice has been given to the administrator;
             593          (f) disclose the total amount of money received by the applicant pursuant to plans
             594      during the preceding 12 months from or on behalf of individuals who reside in this state and
             595      the total amount of money distributed to creditors of those individuals during that period;
             596          (g) disclose, to the best of the applicant's knowledge, the gross amount of money
             597      accumulated during the preceding 12 months pursuant to plans by or on behalf of individuals
             598      who reside in this state and with whom the applicant has agreements; and
             599          (h) provide any other information that the administrator reasonably requires to perform
             600      the administrator's duties under this section.
             601          (3) Except for the information required by Subsections 13-42-106 (7), (14), and (17)
             602      and the addresses required by Subsection 13-42-106 (4), the administrator shall make the
             603      information in an application for renewal of registration as a provider available to the public.
             604          (4) If a registered provider files a timely and complete application for renewal of
             605      registration, the registration remains effective until the administrator, in a record, notifies the
             606      applicant of a denial and states the reasons for the denial.
             607          (5) If the administrator denies an application for renewal of registration as a provider,
             608      the applicant, [within] no later than 30 days after receiving notice of the denial, may appeal and
             609      request a hearing pursuant to Title 63G, Chapter 4, Administrative Procedures Act. Subject to
             610      Section 13-42-134 , while the appeal is pending the applicant shall continue to provide
             611      debt-management services to individuals with whom it has agreements. If the denial is
             612      affirmed, subject to the administrator's order and Section 13-42-134 , the applicant shall
             613      continue to provide debt-management services to individuals with whom it has agreements
             614      until, with the approval of the administrator, it transfers the agreements to another registered


             615      provider or returns to the individuals all unexpended money that is under the applicant's
             616      control.
             617          (6) (a) The administrator may waive or reduce the insurance requirement in Subsection
             618      (2)(e) if the provider does not:
             619          (i) maintain control of a trust account or receive money paid by an individual pursuant
             620      to a plan for distribution to creditors;
             621          (ii) make payments to creditors on behalf of individuals;
             622          (iii) collect fees by means of automatic payment from individuals; and
             623          (iv) execute any powers of attorney that may be utilized by the provider to collect fees
             624      from or expend funds on behalf of an individual.
             625          (b) A waiver or reduction in insurance requirements allowed by the administrator under
             626      Subsection (6)(a) shall balance the reduction in risk posed by a provider meeting the stated
             627      requirements against any continued need for insurance against employee and director
             628      dishonesty.
             629          Section 11. Section 13-42-112 is amended to read:
             630           13-42-112. Registration in another state -- Rulemaking.
             631          (1) (a) Subject to rules made by the administrator, if a provider holds a license or
             632      certificate of registration in another state authorizing it to provide debt-management services,
             633      the provider may submit a copy of that license or certificate and the application for it instead of
             634      an application in the form prescribed by Subsection 13-42-105 (1), Section 13-42-106 , or
             635      Subsection 13-42-111 (2).
             636          (b) The administrator shall accept the application and the license or certificate from the
             637      other state as an application for registration as a provider or for renewal of registration as a
             638      provider, as appropriate, in this state if:
             639          (i) the application in the other state contains information substantially similar to or
             640      more comprehensive than that required in an application submitted in this state;
             641          (ii) the applicant provides the information required by Subsections 13-42-105 (2)(d) and
             642      13-42-106 (1), (3), (7), (10), (12), and (13);
             643          (iii) the applicant, under penalty of perjury, certifies that the information contained in
             644      the application is current or, to the extent it is not current, supplements the application to make
             645      the information current; and


             646          (iv) the applicant files a surety bond or substitute in accordance with Section
             647      13-42-113 or 13-42-114 that is solely payable or available to this state and to individuals who
             648      reside in this state.
             649          (2) The administrator, in accordance with Title 63G, Chapter 3, Utah Administrative
             650      Rulemaking Act, shall make rules designating the states in which a provider may have a license
             651      or certificate that may be submitted to the administrator in compliance with this section.
             652          Section 12. Section 13-42-113 is amended to read:
             653           13-42-113. Bond required.
             654          (1) Except as otherwise provided in Section 13-42-114 , a provider that is required to be
             655      registered under this chapter shall file a surety bond with the administrator, which shall:
             656          (a) be in effect during the period of registration and for two years after the provider
             657      ceases providing debt-management services to individuals in this state; and
             658          (b) run to this state for the benefit of this state and of individuals who reside in this
             659      state when they agree to receive debt-management services from the provider, as their interests
             660      may appear.
             661          (2) Subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), a
             662      surety bond filed pursuant to Subsection (1) shall:
             663          (a) be in the amount of $100,000;
             664          (b) be issued by a bonding, surety, or insurance company authorized to do business in
             665      this state and rated at least [A] A- by a nationally recognized rating organization; and
             666          (c) have payment conditioned [upon] on noncompliance of the provider or its agent
             667      with this chapter.
             668          (3) If the principal amount of a surety bond is reduced by payment of a claim or a
             669      judgment, the provider shall immediately notify the administrator and, [within] no later than 30
             670      days after notice by the administrator, file a new or additional surety bond in an amount to
             671      comply with the $100,000 requirement. If for any reason a surety terminates a bond, the
             672      provider shall immediately file a new surety bond in the amount of $100,000.
             673          (4) The administrator or an individual may obtain satisfaction out of the surety bond
             674      procured pursuant to this section if:
             675          (a) the administrator assesses expenses under Subsection 13-42-132 (2)(a), issues a
             676      final order under Subsection 13-42-133 (1)(b), or recovers a final judgment under Subsection


             677      13-42-133 (1)(d) or (e) or Subsection 13-42-133 (4); or
             678          (b) an individual recovers a final judgment pursuant to Subsection 13-42-135 (1),
             679      Subsection 13-42-135 (2), or Subsection 13-42-135 (3)(a), (b), or (d).
             680          (5) If claims against a surety bond exceed or are reasonably expected to exceed the
             681      amount of the bond, the administrator, on the initiative of the administrator or on petition of the
             682      surety, shall, unless the proceeds are adequate to pay all costs, judgments, and claims,
             683      distribute the proceeds in the following order:
             684          (a) to satisfaction of a final order or judgment under Subsection 13-42-133 (1)(a), (d),
             685      or (e) or Subsection 13-42-133 (4);
             686          (b) to final judgments recovered by individuals pursuant to Subsection 13-42-135 (1),
             687      Subsection 13-42-135 (2), or Subsection 13-42-135 (3)(a), (b) or (d), pro rata;
             688          (c) to claims of individuals established to the satisfaction of the administrator, pro rata;
             689      and
             690          (d) if a final order or judgment is issued under Subsection 13-42-133 (1), to the
             691      expenses charged pursuant to Subsection 13-42-132 (2)(a).
             692          Section 13. Section 13-42-114 is amended to read:
             693           13-42-114. Bond required -- Substitute.
             694          (1) Instead of the surety bond required by Section 13-42-113 , a provider, with the
             695      approval of the administrator and in the amount required by Subsection (2), may deliver to the
             696      administrator[, in the amount required by Subsection 13-42-113 (2), and, except as otherwise
             697      provided in Subsection (1)(c)(i), payable or available to this state and to individuals who reside
             698      in this state when they agree to receive debt-management services from the provider, as their
             699      interests may appear, if the provider or its agent does not comply with this chapter]:
             700          [(a) a certificate of insurance:]
             701          [(i) issued by an insurance company authorized to do business in this state and rated at
             702      least A or equivalent by a nationally recognized rating organization approved by the
             703      administrator; and]
             704          [(ii) with no deductible, or if the provider supplies a bond in the amount of $5,000, a
             705      deductible not exceeding $5,000;]
             706          [(b) a certificate of deposit issued or confirmed by a bank approved by the
             707      administrator, payable upon presentation of a certificate by the administrator stating that the


             708      provider or its agent has not complied with this chapter; or]
             709          [(c) with the approval of the administrator:]
             710          [(i)] (a) an irrevocable letter of credit, issued or confirmed by a bank approved by the
             711      administrator, payable [upon] on presentation of a certificate by the administrator stating that
             712      the provider or its agent has not complied with this chapter; or
             713          [(ii)] (b) bonds or other obligations of the United States or guaranteed by the United
             714      States or bonds or other obligations of this state or a political subdivision of this state, to be:
             715          (i) deposited and maintained with a bank approved by the administrator for this
             716      purpose[.]; and
             717          (ii) delivered by the bank to the administrator on presentation of a certificate by the
             718      administrator stating that the provider or its agent has not complied with this chapter.
             719          (2) If a provider furnishes a substitute pursuant to Subsection (1), [the provisions of]
             720      Subsections 13-42-113 (1), (3), (4), and (5) apply to the substitute.
             721          Section 14. Section 13-42-117 is amended to read:
             722           13-42-117. Prerequisites for providing debt-management services.
             723          (1) Before providing debt-management services, a [registered] provider shall give the
             724      individual an itemized list of goods and services and the charges for each. The list shall be
             725      clear and conspicuous, be in a record the individual may keep whether or not the individual
             726      assents to an agreement, and describe the goods and services the provider offers:
             727          (a) free of additional charge if the individual enters into an agreement;
             728          (b) for a charge if the individual does not enter into an agreement; and
             729          (c) for a charge if the individual enters into an agreement, using the following
             730      terminology, as applicable, and format:
             731              Set-up fee _________________________________________________
             732                              dollar amount of fee
             733              Monthly service fee __________________________________________
             734                          dollar amount of fee or method of determining amount
             735              Settlement fee ______________________________________________
             736                          dollar amount of fee or method of determining amount
             737              Goods and services in addition to those provided in connection with a plan:
             738              _____________ ____________________________________________


             739                  (item) dollar amount or method of determining amount
             740              _____________ ____________________________________________
             741                  (item) dollar amount or method of determining amount.
             742          (2) A provider may not furnish debt-management services unless the provider, through
             743      the services of a certified counselor:
             744          (a) provides the individual with reasonable education about the management of
             745      personal finance;
             746          (b) has prepared a financial analysis[; and] including at least the following matters
             747      affecting the individual's financial condition:
             748          (i) assets;
             749          (ii) income;
             750          (iii) debt, including secured debt; and
             751          (iv) other liabilities; and
             752          (c) if the individual is to make regular, periodic payments to a creditor or a provider:
             753          (i) has prepared a plan for the individual;
             754          (ii) has made a determination, based on the provider's analysis of the information
             755      provided by the individual and otherwise available to it, that the plan is suitable for the
             756      individual and the individual will be able to meet the payment obligations under the plan; and
             757          (iii) believes that each creditor of the individual listed as a participating creditor in the
             758      plan will accept payment of the individual's debts as provided in the plan.
             759          (3) Before an individual assents to an agreement to engage in a plan, a provider shall:
             760          (a) provide the individual with a copy of the analysis and plan required by Subsection
             761      (2) in a record that identifies the provider and that the individual may keep whether or not the
             762      individual assents to the agreement;
             763          (b) inform the individual of the availability, at the individual's option, of assistance by
             764      a toll-free communication system or in person to discuss the financial analysis and plan
             765      required by Subsection (2); and
             766          (c) with respect to all creditors identified by the individual or otherwise known by the
             767      provider to be creditors of the individual, provide the individual with a list of:
             768          (i) creditors that the provider expects to participate in the plan and grant concessions;
             769          (ii) creditors that the provider expects to participate in the plan but not grant


             770      concessions;
             771          (iii) creditors that the provider expects not to participate in the plan; and
             772          (iv) all other creditors.
             773          (4) Before an individual assents to an agreement, the provider shall inform the
             774      individual, in a separate record [that contains nothing else, that is given separately, and] that
             775      the individual may keep whether or not the individual assents to the agreement:
             776          (a) of the name and business address of the provider;
             777          (b) that plans are not suitable for all individuals and the individual may ask the
             778      provider about other ways, including bankruptcy, to deal with indebtedness;
             779          (c) of the amount of time necessary to achieve the results that the provider represents to
             780      be achievable;
             781          (d) if the provider intends to include a settlement offer to any of the individual's
             782      creditors or debt collectors:
             783          (i) of the time by which the provider will make a bona fide settlement offer to any of
             784      the individual's creditors or debt collectors; and
             785          (ii) of the amount of money or the percentage of each outstanding debt that the
             786      individual must accumulate before the provider will make a bona fide settlement offer to each
             787      creditor or debt collector;
             788          [(c)] (e) that establishment of a plan may adversely affect the individual's credit rating
             789      or credit scores;
             790          [(d)] (f) that nonpayment of debt may lead creditors to increase finance and other
             791      charges or undertake collection activity, including litigation;
             792          (g) if the provider requests or requires the individual to place money in an account at
             793      an insured financial institution, that the individual:
             794          (i) owns the funds held in the account;
             795          (ii) may withdraw from the provider's plan at any time without penalty; and
             796          (iii) is entitled to receive all money in the account, other than money that the provider
             797      earns as provided in Section 13-42-123 , at the time the individual withdraws from the
             798      provider's plan;
             799          [(e)] (h) unless it is not true, that the provider may receive compensation from the
             800      creditors of the individual; and


             801          [(f)] (i) that, unless the individual is insolvent, if a creditor settles for less than the full
             802      amount of the debt, the plan may result in the creation of taxable income to the individual, even
             803      though the individual does not receive any money.
             804          (5) If a provider may receive payments from an individual's creditors and the plan
             805      contemplates that the individual's creditors will reduce finance charges or fees for late payment,
             806      default, or delinquency, the provider may comply with Subsection (4) by providing the
             807      following disclosure, surrounded by black lines:
             808     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             809          (1) Debt-management plans are not right for all individuals, and you may ask us to
             810      provide information about other ways, including bankruptcy, to deal with your debts.
             811          (2) Using a debt-management plan may make it harder for you to obtain credit.
             812          (3) We may receive compensation for our services from your creditors.
             813     
_______________________________________

             814     
Name and business address of provider

             815          (6) If a provider will not receive payments from an individual's creditors and the plan
             816      contemplates that the individual's creditors will reduce finance charges or fees for late payment,
             817      default, or delinquency, a provider may comply with Subsection (4) by providing the following
             818      disclosure, surrounded by black lines:
             819     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             820          (1) Debt-management plans are not right for all individuals, and you may ask us to
             821      provide information about other ways, including bankruptcy, to deal with your debts.
             822          (2) Using a debt-management plan may make it harder for you to obtain credit.
             823     
______________________________________

             824     
Name and business address of provider

             825          (7) If an agreement contemplates that creditors will settle debts for less than the full
             826      principal amount of debt owed, a provider may comply with Subsection (4) by providing the
             827      following disclosure, surrounded by black lines:
             828     
IMPORTANT INFORMATION FOR YOU TO CONSIDER

             829          (1) Our program is not right for all individuals, and you may ask us to provide
             830      information about bankruptcy and other ways to deal with your debts.
             831          (2) Nonpayment of your debts under our program may


             832          hurt your credit rating or credit scores;
             833          lead your creditors to increase finance and other charges; and
             834          lead your creditors to undertake activity, including lawsuits, to collect the debts.
             835          (3) Reduction of debt under our program may result in taxable income to you, even
             836      though you will not actually receive any money.
             837     
_________________________________________

             838     
Name and business address of provider

             839          Section 15. Section 13-42-118 is amended to read:
             840           13-42-118. Communication by electronic or other means.
             841          (1) In this section:
             842          (a) "Consumer" means an individual who seeks or obtains goods or services that are
             843      used primarily for personal, family, or household purposes.
             844          (b) "Federal act" means the Electronic Signatures in Global and National Commerce
             845      Act, 15 U.S.C. Section 7001 et seq.
             846          (2) A provider may satisfy the requirements of Section 13-42-117 , 13-42-119 , or
             847      13-42-127 by means of the Internet or other electronic means if the provider obtains a
             848      consumer's consent in the manner provided by Section 101(c)(1) of the federal act.
             849          (3) The disclosures and materials required by Sections 13-42-117 , 13-42-119 , and
             850      13-42-127 shall be presented in a form that is capable of being accurately reproduced for later
             851      reference.
             852          (4) With respect to disclosure by means of an Internet website, the disclosure of the
             853      information required by Subsection 13-42-117 (4) shall appear on one or more screens that:
             854          (a) contain no other information; and
             855          (b) the individual is able to see before proceeding to assent to formation of an
             856      agreement.
             857          (5) At the time of providing the materials and agreement required by Subsections
             858      13-42-117 (3) and (4), Section 13-42-119 , and Section 13-42-127 , a provider shall inform the
             859      individual that [upon] on electronic, telephonic, or written request, it will send the individual a
             860      written copy of the materials, and shall comply with a request as provided in Subsection (6).
             861          (6) If a provider is requested, before the expiration of 90 days after an agreement is
             862      completed or terminated, to send a written copy of the materials required by Subsections


             863      13-42-117 (3) and (4), Section 13-42-119 , or Section 13-42-127 , the provider shall send them at
             864      no charge [within] no later than three business days after the request, but the provider need not
             865      comply with a request more than once per calendar month or if it reasonably believes the
             866      request is made for purposes of harassment. If a request is made more than 90 days after an
             867      agreement is completed or terminated, the provider shall send within a reasonable time a
             868      written copy of the materials requested.
             869          (7) A provider that maintains an Internet website shall disclose on the home page of its
             870      website or on a page that is clearly and conspicuously connected to the home page by a link
             871      that clearly reveals its contents:
             872          (a) its name and all names under which it does business;
             873          (b) its principal business address, telephone number, and electronic-mail address, if
             874      any; and
             875          (c) the names of its principal officers.
             876          (8) Subject to Subsection (9), if a consumer who has consented to electronic
             877      communication in the manner provided by Section 101 of the federal act withdraws consent as
             878      provided in the federal act, a provider may terminate its agreement with the consumer.
             879          (9) If a provider wishes to terminate an agreement with a consumer pursuant to
             880      Subsection (8), it shall notify the consumer that it will terminate the agreement unless the
             881      consumer, [within] no later than 30 days after receiving the notification, consents to electronic
             882      communication in the manner provided in Section 101(c) of the federal act. If the consumer
             883      consents, the provider may terminate the agreement only as permitted by Subsection
             884      13-42-119 (1)(f)[(vii)](iv)(D).
             885          Section 16. Section 13-42-119 is amended to read:
             886           13-42-119. Form and contents of agreement.
             887          (1) An agreement shall:
             888          (a) be in a record;
             889          (b) be dated and signed by the provider and the individual;
             890          (c) include the name of the individual and the address where the individual resides;
             891          (d) include the name, business address, and telephone number of the provider;
             892          (e) be delivered to the individual immediately upon formation of the agreement; and
             893          (f) disclose:


             894          (i) the services to be provided;
             895          (ii) the amount, or method of determining the amount, of all fees, individually
             896      itemized, to be paid by the individual;
             897          (iii) the schedule of payments to be made by or on behalf of the individual, including
             898      the amount of each payment, the date on which each payment is due, and an estimate of the
             899      date of the final payment;
             900          (iv) if a plan provides for regular periodic payments to creditors:
             901          (A) each creditor of the individual to which payment will be made, the amount owed to
             902      each creditor, and any concessions the provider reasonably believes each creditor will offer;
             903      [and]
             904          (B) the schedule of expected payments to each creditor, including the amount of each
             905      payment and the date on which it will be made;
             906          [(v)] (C) each creditor that the provider believes will not participate in the plan and to
             907      which the provider will not direct payment; and
             908          (D) the provider may terminate the agreement for good cause, upon return of
             909      unexpended money of the individual;
             910          (v) if a plan contemplates the settlement of the individual's debt for less than the
             911      principal amount of the debt, an estimate of:
             912          (A) the duration of the plan based on all enrolled debts;
             913          (B) the length of time before the individual may reasonably expect a settlement offer;
             914      and
             915          (C) the amount of savings needed to accrue before the individual may reasonably
             916      expect a settlement offer, expressed as either a dollar amount or a percentage, for each enrolled
             917      debt;
             918          (vi) how the provider will comply with its obligations under Subsection 13-42-127 (1);
             919          [(vii) that the provider may terminate the agreement for good cause, upon return of
             920      unexpended money of the individual;]
             921          [(viii)] (vii) that the individual may [cancel the agreement as provided in Section
             922      13-42-120 ] terminate the agreement at any time by giving written or electronic notice, and that,
             923      if notice of termination is given, the individual will receive all unexpended money that the
             924      provider or its designee has received from or on behalf of the individual for payment of a credit


             925      and, except to the extent they have been earned, the provider's fees;
             926          [(ix)] (viii) that the individual may contact the administrator with any questions or
             927      complaints regarding the provider; and
             928          [(x)] (ix) the address, telephone number, and Internet address or website of the
             929      administrator.
             930          (2) For purposes of Subsection (1)(e), delivery of an electronic record occurs when it is
             931      made available in a format in which the individual may retrieve, save, and print it and the
             932      individual is notified that it is available.
             933          (3) If the administrator supplies the provider with any information required under
             934      Subsection (1)(f)[(x)](ix), the provider may comply with that requirement only by disclosing
             935      the information supplied by the administrator.
             936          (4) An agreement shall provide that:
             937          [(a) the individual has a right to terminate the agreement at any time, without penalty
             938      or obligation, by giving the provider written or electronic notice, in which event:]
             939          [(i) the provider will refund all unexpended money that the provider or its agent has
             940      received from or on behalf of the individual for the reduction or satisfaction of the individual's
             941      debt;]
             942          [(ii) with respect to an agreement that contemplates that creditors will settle debts for
             943      less than the principal amount of debt, the provider will refund 65% of any portion of the
             944      set-up fee that has not been credited against the settlement fee; and]
             945          [(iii) all powers of attorney granted by the individual to the provider are revoked and
             946      ineffective;]
             947          [(b)] (a) the individual authorizes any bank in which the provider or its agent has
             948      established a trust account to disclose to the administrator any financial records relating to the
             949      trust account; and
             950          [(c)] (b) the provider will notify the individual [within] no later than five business days
             951      after learning of a creditor's final decision to reject or withdraw from a plan and that this notice
             952      will include:
             953          (i) the identity of the creditor; and
             954          (ii) the right of the individual to modify or terminate the agreement.
             955          [(5) An agreement may confer on a provider a power of attorney to settle the


             956      individual's debt for no more than 50% of the principal amount of the debt. An agreement may
             957      not confer a power of attorney to settle a debt for more than 50% of that amount, but may
             958      confer a power of attorney to negotiate with creditors of the individual on behalf of the
             959      individual. An agreement shall provide that the provider will obtain the assent of the
             960      individual after a creditor has assented to a settlement for more than 50% of the principal
             961      amount of the debt.]
             962          [(6)] (5) An agreement may not:
             963          (a) provide for application of the law of any jurisdiction other than the United States
             964      and this state;
             965          (b) except as permitted by Section 2 of the Federal Arbitration Act, 9 U.S.C. Section 2,
             966      or Title 78B, Chapter 11, Utah Uniform Arbitration Act, contain a provision that modifies or
             967      limits otherwise available forums or procedural rights, including the right to trial by jury, that
             968      are generally available to the individual under law other than this chapter;
             969          (c) contain a provision that restricts the individual's remedies under this chapter or law
             970      other than this chapter; or
             971          (d) contain a provision that:
             972          (i) limits or releases the liability of any person for not performing the agreement or for
             973      violating this chapter; or
             974          (ii) indemnifies any person for liability arising under the agreement or this chapter.
             975          [(7)] (6) [All rights and obligations specified in Subsection (4) and Section 13-42-120
             976      exist even if not provided in the agreement.] A provision in an agreement which violates
             977      Subsection [(4),] (5)[,] or (6) is void.
             978          Section 17. Section 13-42-120 is repealed and reenacted to read:
             979          13-42-120. Termination of agreement.
             980          (1) An individual who is a party to an agreement may terminate the agreement at any
             981      time, without penalty or obligation, by giving the provider notice in a record.
             982          (2) A provider may terminate an agreement if an individual who is a party to the
             983      agreement fails for 60 days to make a payment or deposit required by the agreement or if other
             984      good cause exists.
             985          (3) If an agreement is terminated:
             986          (a) the provider, no later than seven business days after the termination, shall pay the


             987      individual who is a party to the agreement all money the provider or its designee received from
             988      or on behalf of the individual, other than:
             989          (i) an amount properly disbursed to a creditor; and
             990          (ii) fees earned pursuant to Section 13-42-123 ; and
             991          (b) any power of attorney granted by the individual to the provider is revoked.
             992          Section 18. Section 13-42-121 is amended to read:
             993           13-42-121. Required language.
             994          Unless the administrator, by rule, provides otherwise, the disclosures and documents
             995      required by this chapter shall be in English. If a provider communicates with an individual
             996      primarily in a language other than English, the provider shall furnish a translation [into] in the
             997      other language of the disclosures and documents required by this chapter.
             998          Section 19. Section 13-42-122 is amended to read:
             999           13-42-122. Trust account.
             1000          (1) All money paid to a provider by or on behalf of an individual for distribution to
             1001      creditors pursuant to a plan is held in trust. [Within] No later than two business days after
             1002      receipt, the provider shall deposit the money in a trust account established for the benefit of
             1003      individuals to whom the provider is furnishing debt-management services.
             1004          (2) A provider whose agreement contemplates the settlement of an individual's debt for
             1005      less than the principal amount of the debt may request or require the individual to place money
             1006      in an account to be used to pay a creditor or the provider's fees, or both, if:
             1007          (a) the money is held in an insured account at a bank;
             1008          (b) the individual owns the money held in the account and is paid any interest accrued
             1009      on the account;
             1010          (c) the entity administering the account is not the provider or an affiliate of the
             1011      provider, unless the affiliate is described in Subsection 13-42-102 (2)(b)(iv);
             1012          (d) the entity administering the account does not give or accept any money or other
             1013      compensation in exchange for a referral of business involving debt-management services; and
             1014          (e) the individual may terminate the agreement at any time without penalty and on
             1015      termination must receive all money in the account, other than money earned by the provider in
             1016      compliance with this section.
             1017          (3) If an agreement contemplates the reduction of finance charges or fees for late


             1018      payment, default, or delinquency and the provider complies with Subsection (1), the provider
             1019      may request or require the individual to make payment to be used for both distribution to
             1020      creditors and payment of the provider's fees.
             1021          [(2)] (4) Money held in trust by a provider is not property of the provider or its
             1022      designee. The money is not available to creditors of the provider or designee, except an
             1023      individual from whom or on whose behalf the provider received money, to the extent that the
             1024      money has not been disbursed to creditors of the individual.
             1025          [(3)] (5) A provider shall:
             1026          (a) maintain separate records of account for each individual to whom the provider is
             1027      furnishing debt-management services;
             1028          (b) disburse money paid by or on behalf of the individual to creditors of the individual
             1029      as disclosed in the agreement, except that:
             1030          (i) the provider may delay payment to the extent that a payment by the individual is not
             1031      final; and
             1032          (ii) if a plan provides for regular periodic payments to creditors, the disbursement shall
             1033      comply with the due dates established by each creditor; and
             1034          (c) promptly correct any payments that are not made or that are misdirected as a result
             1035      of an error by the provider or other person in control of the trust account and reimburse the
             1036      individual for any costs or fees imposed by a creditor as a result of the failure to pay or
             1037      misdirection.
             1038          [(4)] (6) A provider may not commingle money in a trust account established for the
             1039      benefit of individuals to whom the provider is furnishing debt-management services with
             1040      money of other persons.
             1041          [(5)] (7) A trust account shall at all times have a cash balance equal to the sum of the
             1042      balances of each individual's account.
             1043          [(6)] (8) If a provider has established a trust account pursuant to Subsection (1), the
             1044      provider shall reconcile the trust account at least once a month. The reconciliation shall
             1045      compare the cash balance in the trust account with the sum of the balances in each individual's
             1046      account. If the provider or its designee has more than one trust account, each trust account
             1047      shall be individually reconciled.
             1048          [(7)] (9) If a provider discovers, or has a reasonable suspicion of, embezzlement or


             1049      other unlawful appropriation of money held in trust, the provider immediately shall notify the
             1050      administrator by a method approved by the administrator. Unless the administrator by rule
             1051      provides otherwise, [within] no later than five days thereafter, the provider shall give notice to
             1052      the administrator describing the remedial action taken or to be taken.
             1053          [(8)] (10) If an individual terminates an agreement or it becomes reasonably apparent
             1054      to a provider that a plan has failed, the provider shall promptly refund to the individual all
             1055      money paid by or on behalf of the individual which has not been paid to creditors, less fees that
             1056      are payable to the provider under Section 13-42-123 .
             1057          [(9)] (11) Before relocating a trust account from one bank to another, a provider shall
             1058      inform the administrator of the name, business address, and telephone number of the new bank.
             1059      As soon as practicable, the provider shall inform the administrator of the account number of the
             1060      trust account at the new bank.
             1061          Section 20. Section 13-42-123 is amended to read:
             1062           13-42-123. Fees and other charges.
             1063          (1) A provider may not impose directly or indirectly a fee or other charge on an
             1064      individual or receive money from or on behalf of an individual for debt-management services
             1065      except as permitted by this section.
             1066          (2) A provider may not impose charges or receive payment for debt-management
             1067      services until the provider and the individual have signed an agreement that complies with
             1068      Sections 13-42-119 and 13-42-128 .
             1069          (3) If an individual assents to an agreement, a provider may not impose a fee or other
             1070      charge for educational [or], counseling, or similar services, [or the like,] except as otherwise
             1071      provided in this [Subsection (3)] section and Subsection 13-42-128 (4). The administrator may
             1072      authorize a provider to charge a fee based on the nature and extent of the [educational or
             1073      counseling] services furnished by the provider.
             1074          (4) [Subject] (a) Subsections (4)(b) through (d) are subject to adjustment of dollar
             1075      amounts pursuant to Subsection 13-42-132 (6)[, the following rules apply:].
             1076          [(a)] (b) If an individual assents to a plan that contemplates that creditors will reduce
             1077      finance charges or fees for late payment, default, or delinquency, the provider may charge:
             1078          (i) a fee not exceeding $50 for consultation, obtaining a credit report, setting up an
             1079      account, and the like; and


             1080          (ii) a monthly service fee, not to exceed $10 times the number of accounts remaining in
             1081      a plan at the time the fee is assessed, but not more than $50 in any month.
             1082          [(b)] (c) If an individual assents to an agreement that contemplates that creditors will
             1083      settle debts for less than the principal amount of the debt, a provider may [charge:] not request
             1084      or receive payment of any fee or consideration for the provider's service unless:
             1085          [(i) subject to Subsection 13-42-119 (4), a fee for consultation, obtaining a credit report,
             1086      setting up an account, and the like, in an amount not exceeding the lesser of $400 and 4% of
             1087      the debt in the plan at the inception of the plan; and]
             1088          [(ii) a monthly service fee, not to exceed $10 times the number of accounts remaining
             1089      in a plan at the time the fee is assessed, but not more than $50 in any month.]
             1090          [(c) A provider may not impose or receive fees under both Subsections (4)(a) and (b).]
             1091          (i) the provider has renegotiated, settled, reduced, or otherwise altered the terms of at
             1092      least one debt under an agreement executed by the individual;
             1093          (ii) the individual has made at least one payment pursuant to that agreement between
             1094      the individual and the creditor or debt collector; and
             1095          (iii) the fee or consideration for any individual debt that is renegotiated, settled,
             1096      reduced, or otherwise altered:
             1097          (A) bears the same proportion to the total fee for renegotiating, settling, reducing, or
             1098      altering the terms of the entire debt as the individual debt amount at the time the debt was
             1099      enrolled in the service bears to the entire debt amount at the time the debt was enrolled in the
             1100      service; or
             1101          (B) is a percentage of the amount saved as a result of the renegotiation, settlement,
             1102      reduction, or alteration, as calculated under Subsection (4)(e), which percentage may not
             1103      change from one individual debt to another.
             1104          (d) Except as otherwise provided in Subsection 13-42-128 (4), if an individual does not
             1105      assent to an agreement, a provider may receive for educational and counseling services it
             1106      provides to the individual a fee not exceeding $100 or, with the approval of the administrator, a
             1107      larger fee. The administrator may approve a fee larger than $100 if the nature and extent of the
             1108      educational and counseling services warrant the larger fee.
             1109          (e) For purposes of Subsection (4)(e)(iii)(B), the amount saved is calculated as the
             1110      difference between the amount owed at the time the debt is enrolled in the service and the


             1111      amount actually paid to satisfy the debt.
             1112          (5) If, before the expiration of 90 days after the completion or termination of
             1113      educational or counseling services, an individual assents to an agreement, the provider shall
             1114      refund to the individual any fee paid pursuant to Subsection (4)(d).
             1115          (6) [(a)] Except as otherwise provided in Subsections (3) and (4), if an agreement
             1116      contemplates that creditors will settle an individual's debts for less than the principal amount of
             1117      the debt[,]:
             1118          (a) compensation for services in connection with settling a debt [may not exceed one of
             1119      the following applicable settlement fee limits in Subsection (6)(b) or (c), the terms of which
             1120      shall be clearly disclosed in the agreement.] shall be reasonable and clearly disclosed in the
             1121      agreement; and
             1122          (b) a fee for settling a debt may be collected only as the debt is settled.
             1123          [(b) (i) With respect to agreements where a flat settlement fee is charged based on the
             1124      overall amount of included debt, total aggregate fees charged may not exceed 17% of the
             1125      principal amount of debt included in the agreement, including any fees charged under
             1126      Subsections (4)(b)(i) and (ii).]
             1127          [(ii) The flat settlement fee authorized under this Subsection (6)(b) shall be assessed in
             1128      equal monthly payments over no less than half of the length of the plan, as estimated at the
             1129      plan's inception, unless:]
             1130          [(A) payment is voluntarily accelerated by the individual in a separate record; and]
             1131          [(B) at least half of the principal amount of overall debt included in the agreement at its
             1132      inception has been settled.]
             1133          [(c) (i) With respect to agreements where fees are calculated as a percentage of the
             1134      amount saved by an individual, a settlement fee may not exceed 30% of the excess of the
             1135      outstanding amount of each debt over the amount actually paid to the creditor, as calculated at
             1136      the time of settlement.]
             1137          [(ii) Settlement fees authorized under this Subsection (6)(c):]
             1138          [(A) may be collected only as debts are settled; and]
             1139          [(B) the total aggregate amount of fees charged to any individual under this chapter,
             1140      including fees charged under Subsections (4)(b)(i) and (ii), may not exceed 20% of the
             1141      principal amount of debt included in the agreement at the agreement's inception.]


             1142          [(d) A provider may not impose or receive fees under both Subsections (6)(b) and (c).]
             1143          (7) Subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), if
             1144      a payment to a provider by an individual under this chapter is dishonored, a provider may
             1145      impose a reasonable charge on the individual, not to exceed the lesser of $25 and the amount
             1146      permitted by law other than this chapter.
             1147          Section 21. Section 13-42-126 is repealed and reenacted to read:
             1148          13-42-126. Retention of records.
             1149          (1) For each individual for whom a provider provides debt-management services, the
             1150      provider shall maintain records for five years after the final payment made by the individual.
             1151          (2) The provider shall produce a copy of the records to the individual within a
             1152      reasonable time after a request for the records.
             1153          (3) The provider may use electronic or other means of storage of the records.
             1154          Section 22. Section 13-42-127 is amended to read:
             1155           13-42-127. Periodic reports and retention of records.
             1156          (1) A provider shall provide the accounting required by Subsection (2):
             1157          (a) [upon] on cancellation or termination of an agreement; and
             1158          (b) before cancellation or termination of any agreement:
             1159          (i) at least once each month; and
             1160          (ii) [within] no later than five business days after a request by an individual, but the
             1161      provider need not comply with more than one request in any calendar month.
             1162          (2) A provider, in a record, shall provide each individual for whom it has established a
             1163      plan an accounting of the following information:
             1164          (a) the amount in an account containing money paid by or on behalf of the individual
             1165      for fees or distribution to a creditor, or both, as of the date one month before the date of the
             1166      accounting;
             1167          [(a)] (b) the amount [of money received from the individual] paid into the account
             1168      since the last report;
             1169          [(b)] (c) the amounts and dates of disbursement made on the individual's behalf, or by
             1170      the individual [upon] on the direction of the provider, since the last report to each creditor
             1171      listed in the plan;
             1172          [(c)] (d) the amounts deducted, as fees or otherwise, from the amount [received from


             1173      the individual] paid into the account since the last report;
             1174          [(d) the amount held in reserve; and]
             1175          (e) if, since the last report, a creditor has agreed to accept as payment in full an amount
             1176      less than the principal amount of the debt owed by the individual:
             1177          (i) the total amount and terms of the settlement;
             1178          (ii) the amount of the debt when the individual assented to the plan;
             1179          (iii) the amount of the debt when the creditor agreed to the settlement; and
             1180          (iv) the calculation of a settlement fee[.]; and
             1181          (f) the amount in the account as of the date of the accounting.
             1182          [(3) A provider shall maintain records for each individual for whom it provides
             1183      debt-management services for five years after the final payment made by the individual and
             1184      produce a copy of them to the individual within a reasonable time after a request for them. The
             1185      provider may use electronic or other means of storage of the records.]
             1186          (3) If an agreement contemplates that a creditor will settle a debt for less than the
             1187      principal amount of the debt and the provider delegates performance of its duties under this
             1188      section to another person, the provider may provide the information required by Subsection
             1189      (2)(e) in a record separate from the record containing the other information required by
             1190      Subsection (2).
             1191          Section 23. Section 13-42-128 is amended to read:
             1192           13-42-128. Prohibited acts and practices.
             1193          (1) A provider may not, directly or indirectly:
             1194          (a) include a secured debt in a plan, except as authorized by law other than this chapter;
             1195          [(a)] (b) misappropriate or misapply money held in trust;
             1196          [(b)] (c) settle a debt on behalf of an individual [for more than 50% of the principal
             1197      amount of the debt owed a creditor], unless the individual assents to the settlement after the
             1198      creditor has assented;
             1199          [(c)] (d) take a power of attorney that authorizes it to settle a debt[, unless the power of
             1200      attorney expressly limits the provider's authority to settle debts for not more than 50% of the
             1201      principal amount of the debt owed a creditor];
             1202          [(d)] (e) exercise or attempt to exercise a power of attorney after an individual has
             1203      terminated an agreement;


             1204          [(e)] (f) initiate a transfer from an individual's account at a bank or with another person
             1205      unless the transfer is:
             1206          (i) a return of money to the individual; or
             1207          (ii) before termination of an agreement, properly authorized by the agreement and this
             1208      chapter, and for:
             1209          (A) payment to one or more creditors pursuant to an agreement; or
             1210          (B) payment of a fee;
             1211          [(f)] (g) offer a gift or bonus, premium, reward, or other compensation to an individual
             1212      for executing an agreement;
             1213          [(g)] (h) offer, pay, or give a gift or bonus, premium, reward, or other compensation to
             1214      a lead generator or other person for referring a prospective customer, if the person making the
             1215      referral:
             1216          (i) has a financial interest in the outcome of debt-management services provided to the
             1217      customer, unless neither the provider nor the person making the referral communicates to the
             1218      prospective customer the identity of the source of the referral; or
             1219          (ii) compensates its employees on the basis of a formula that incorporates the number
             1220      of the individuals the employee refers to the provider;
             1221          [(h)] (i) receive a bonus, commission, or other benefit for referring an individual to a
             1222      person;
             1223          [(i)] (j) structure a plan in a manner that would result in a negative amortization of any
             1224      of an individual's debts, unless a creditor that is owed a negatively amortizing debt agrees to
             1225      refund or waive the finance charge [upon] on payment of the principal amount of the debt;
             1226          [(j)] (k) compensate its employees on the basis of a formula that incorporates the
             1227      number of individuals the employee induces to enter into agreements;
             1228          [(k)] (l) settle a debt or lead an individual to believe that a payment to a creditor is in
             1229      settlement of a debt to the creditor unless, at the time of settlement, the individual[: (i)]
             1230      receives a certification by the creditor that the payment:
             1231          (i) is in full settlement of the debt; or
             1232          (ii) is part of a [payment] settlement plan, the terms of which are included in the
             1233      certification, [which upon completion will result in full settlement of] that, if completed
             1234      according to its terms, will satisfy the debt;


             1235          [(l)] (m) make a representation that:
             1236          (i) the provider will furnish money to pay bills or prevent attachments;
             1237          (ii) payment of a certain amount will permit satisfaction of a certain amount or range of
             1238      indebtedness; or
             1239          (iii) participation in a plan will or may prevent litigation, garnishment, attachment,
             1240      repossession, foreclosure, eviction, or loss of employment;
             1241          [(m)] (n) misrepresent that it is authorized or competent to furnish legal advice or
             1242      perform legal services;
             1243          [(n)] (o) represent in its agreements, disclosures required by this chapter,
             1244      advertisements, or Internet website that it is:
             1245          (i) a not-for-profit entity unless it is organized and properly operating as a
             1246      not-for-profit entity under the law of the state in which it was formed; or
             1247          (ii) a tax-exempt entity unless it has received certification of tax-exempt status from
             1248      the Internal Revenue Service and is properly operating as a not-for-profit entity under the law
             1249      of the state in which it was formed;
             1250          [(o)] (p) take a confession of judgment or power of attorney to confess judgment
             1251      against an individual;
             1252          [(p)] (q) employ an unfair, unconscionable, or deceptive act or practice[, including the
             1253      knowing omission of];
             1254          (r) knowingly omit any material information[;] or material aspect of any provider's
             1255      service, including:
             1256          (i) the amount of money or the percentage of the debt amount that an individual may
             1257      save by using the provider's service;
             1258          (ii) the amount of time necessary to achieve the results that the provider represents as
             1259      achievable;
             1260          (iii) the amount of money or the percentage of each outstanding debt that the individual
             1261      is required to accumulate before the provider will:
             1262          (A) initiate an attempt with the individual's creditors or debt collectors to negotiate,
             1263      settle, or modify the terms of the individual's debt; or
             1264          (B) make a bona fide offer to negotiate, settle, or modify the terms of the individual's
             1265      debt;


             1266          (iv) the effect of the service on:
             1267          (A) an individual's creditworthiness; or
             1268          (B) collection efforts of the individual's creditors or debt collectors;
             1269          (v) the percentage or number of individuals who achieve the results that the provider
             1270      represents are achievable; and
             1271          (vi) whether a provider's service is offered or provided by a nonprofit entity; or
             1272          [(q)] (s) make or use any untrue or misleading statement:
             1273          (i) to the administrator; or
             1274          (ii) in the provision of services subject to this chapter.
             1275          (2) If a provider furnishes debt-management services to an individual, the provider may
             1276      not, directly or indirectly:
             1277          (a) purchase a debt or obligation of the individual;
             1278          (b) receive from or on behalf of the individual:
             1279          (i) a promissory note or other negotiable instrument other than a check or a demand
             1280      draft; or
             1281          (ii) a post-dated check or demand draft;
             1282          (c) lend money or provide credit to the individual, [except as] unless the loan or credit
             1283      is:
             1284          (i) a deferral of a settlement fee at no additional expense to the individual; or
             1285          (ii) through an affiliate that is licensed separately from the provider;
             1286          (d) obtain a mortgage or other security interest from any person in connection with the
             1287      services provided to the individual;
             1288          (e) except as permitted by federal law, disclose the identity or identifying information
             1289      of the individual or the identity of the individual's creditors, except to:
             1290          (i) the administrator, [upon] on proper demand;
             1291          (ii) a creditor of the individual, to the extent necessary to secure the cooperation of the
             1292      creditor in a plan; or
             1293          (iii) the extent necessary to administer the plan;
             1294          (f) except as otherwise provided in Subsection 13-42-123 [(6)](4)(c), provide the
             1295      individual less than the full benefit of a compromise of a debt arranged by the provider;
             1296          (g) charge the individual for or provide credit or other insurance, coupons for goods or


             1297      services, membership in a club, access to computers or the Internet, or any other matter not
             1298      directly related to debt-management services or educational services concerning personal
             1299      finance, except to the extent such services are expressly authorized by the administrator; or
             1300          (h) furnish legal advice or perform legal services, unless the person furnishing that
             1301      advice to or performing those services for the individual is licensed to practice law.
             1302          (3) This chapter does not authorize any person to engage in the practice of law.
             1303          (4) A provider may not receive a gift or bonus, premium, reward, or other
             1304      compensation, directly or indirectly, for advising, arranging, or assisting an individual in
             1305      connection with obtaining, an extension of credit or other service from a lender or service
             1306      provider, except:
             1307          (a) for educational or counseling services required in connection with a
             1308      government-sponsored program[.]; or
             1309          (b) as authorized in Subsection 13-42-123 (4)(d).
             1310          (5) Unless a person supplies goods, services, or facilities generally and supplies them
             1311      to the provider at a cost no greater than the cost the person generally charges to others, a
             1312      provider may not purchase goods, services, or facilities from the person if an employee or a
             1313      person that the provider should reasonably know is an affiliate of the provider:
             1314          (a) owns more than 10% of the person; or
             1315          (b) is an employee or affiliate of the person.
             1316          Section 24. Section 13-42-130 is amended to read:
             1317           13-42-130. Advertising.
             1318          (1) If a provider whose agreements contemplate that creditors will reduce finance
             1319      charges or fees for late payment, default, or delinquency advertises debt-management services,
             1320      it shall disclose, in an easily comprehensible manner, that using a debt-management plan may
             1321      make it harder for the individual to obtain credit.
             1322          (2) If a provider whose agreements contemplate that creditors will settle for less than
             1323      the full principal amount of debt that advertises debt-management services, it shall disclose, in
             1324      an easily comprehensible manner:
             1325          (a) the information specified in Subsections 13-42-117 (4)[(c)](e) and [(d)] (f); and
             1326          (b) the provider's settlement fee structure, consistent with the limitations of Section
             1327      13-42-123 .


             1328          Section 25. Section 13-42-131 is amended to read:
             1329           13-42-131. Provider liability for the conduct of other persons -- Prohibited
             1330      conduct of person providing service to provider.
             1331          (1) If a provider delegates any of its duties or obligations under an agreement or this
             1332      chapter to another person, including an independent contractor, the provider is liable for
             1333      conduct of the person which, if done by the provider, would violate the agreement or this
             1334      chapter.
             1335          (2) A lead generator or other person that provides services to or for a provider may not
             1336      engage in an unfair, unconscionable, or deceptive act or practice, including the knowing
             1337      omission of any material information, with respect to an individual who the lead generator or
             1338      other person has reason to believe is or may become a customer of the provider.
             1339          Section 26. Section 13-42-132 is amended to read:
             1340           13-42-132. Powers of administrator.
             1341          (1) The administrator may act on its own initiative or in response to complaints and
             1342      may receive complaints, take action to obtain voluntary compliance with this chapter, refer
             1343      cases to the attorney general, and seek or provide remedies as provided in this chapter.
             1344          (2) The administrator may investigate and examine, in this state or elsewhere, by
             1345      subpoena or otherwise, the activities, books, accounts, and records of a person that provides or
             1346      offers to provide debt-management services, or a person to which a provider has delegated its
             1347      obligations under an agreement or this chapter, to determine compliance with this chapter.
             1348      Information that identifies individuals who have agreements with the provider may not be
             1349      disclosed to the public. In connection with the investigation, the administrator may:
             1350          (a) charge the person the reasonable expenses necessarily incurred to conduct the
             1351      examination;
             1352          (b) require or permit a person to file a statement under oath as to all the facts and
             1353      circumstances of a matter to be investigated; and
             1354          (c) seek a court order authorizing seizure from a bank at which the person maintains [a
             1355      trust] an account [required] contemplated by Section 13-42-122 , any or all money, books,
             1356      records, accounts, and other property of the provider that is in the control of the bank and
             1357      relates to individuals who reside in this state.
             1358          (3) The administrator may adopt rules to implement the provisions of this chapter in


             1359      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             1360          (4) The administrator may enter into cooperative arrangements with any other federal
             1361      or state agency having authority over providers and may exchange with any of those agencies
             1362      information about a provider, including information obtained during an examination of the
             1363      provider.
             1364          (5) The administrator shall establish fees in accordance with Section 63J-1-504 to be
             1365      paid by providers for the expense of administering this chapter.
             1366          (6) The administrator, by rule, shall adopt dollar amounts instead of those specified in
             1367      Sections 13-42-102 , 13-42-105 , 13-42-109 , 13-42-113 , 13-42-123 , 13-42-133 , and 13-42-135
             1368      to reflect inflation, as measured by the United States Bureau of Labor Statistics Consumer
             1369      Price Index for All Urban Consumers or, if that index is not available, another index adopted
             1370      by rule by the administrator. The administrator shall adopt a base year and adjust the dollar
             1371      amounts, effective on July 1 of each year, if the change in the index from the base year, as of
             1372      December 31 of the preceding year, is at least 10%. The dollar amount shall be rounded to the
             1373      nearest $100, except that the amounts in Section 13-42-123 shall be rounded to the nearest
             1374      dollar.
             1375          (7) The administrator shall notify registered providers of any change in dollar amounts
             1376      made pursuant to Subsection (6) and make that information available to the public.
             1377          Section 27. Section 13-42-133 is amended to read:
             1378           13-42-133. Administrative remedies.
             1379          (1) The administrator may enforce this chapter and rules adopted under this chapter by
             1380      taking one or more of the following actions:
             1381          (a) ordering a provider, lead generator, person administering an account pursuant to
             1382      Subsection 13-42-122 (2), or [a] director, employee, or other agent of a provider to cease and
             1383      desist from any violations;
             1384          (b) ordering a provider, lead generator, person administering an account pursuant to
             1385      Subsection 13-42-122 (2), or [a] person that has caused a violation to correct the violation,
             1386      including making restitution of money or property to a person aggrieved by a violation;
             1387          (c) subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6),
             1388      imposing on a provider, lead generator, person administering an account pursuant to
             1389      Subsection 13-42-122 (2), or [a] other person that [has caused] violates or causes a violation an


             1390      administrative fine not exceeding $10,000 for each violation;
             1391          (d) prosecuting a civil action to:
             1392          (i) enforce an order; or
             1393          (ii) obtain restitution or [an injunction or other] equitable relief, or both; or
             1394          (e) intervening in an action brought under Section 13-42-135 .
             1395          (2) Subject to adjustment of the dollar amount pursuant to Subsection 13-42-132 (6), if
             1396      a person violates or knowingly authorizes, directs, or aids in the violation of a final order
             1397      issued under Subsection (1)(a) or (b), the administrator may impose an administrative fine not
             1398      exceeding $20,000 for each violation.
             1399          (3) The administrator may maintain an action to enforce this chapter in any county.
             1400          (4) The administrator may recover the reasonable costs of enforcing the chapter under
             1401      Subsections (1) through (3), including [attorney's] attorney fees based on the hours reasonably
             1402      expended and the hourly rates for attorneys of comparable experience in the community.
             1403          (5) In determining the amount of an administrative fine to impose under Subsection (1)
             1404      or (2), the administrator shall consider the seriousness of the violation, the good faith of the
             1405      violator, any previous violations by the violator, the deleterious effect of the violation on the
             1406      public, the net worth of the violator, and any other factor the administrator considers relevant to
             1407      the determination of the administrative fine.
             1408          (6) All money received through administrative fines imposed under this chapter shall
             1409      be deposited in the Consumer Protection Education and Training Fund created by Section
             1410      13-2-8 .
             1411          Section 28. Section 13-42-134 is amended to read:
             1412           13-42-134. Suspension, revocation, or nonrenewal of registration.
             1413          (1) In this section, "insolvent" means:
             1414          (a) having generally ceased to pay debts in the ordinary course of business other than as
             1415      a result of good-faith dispute;
             1416          (b) being unable to pay debts as they become due; or
             1417          (c) being insolvent within the meaning of the federal bankruptcy law, 11 U.S.C.
             1418      Section 101 et seq.
             1419          (2) The administrator may suspend, revoke, or deny renewal of a provider's registration
             1420      if:


             1421          (a) a fact or condition exists that, if it had existed when the registrant applied for
             1422      registration as a provider, would have been a reason for denying registration;
             1423          (b) the provider has committed a material violation of this chapter or a rule or order of
             1424      the administrator under this chapter;
             1425          (c) the provider is insolvent;
             1426          (d) the provider [or], an employee or affiliate of the provider, a lead generator for the
             1427      provider, a person administering an account for the provider pursuant to Subsection
             1428      13-42-122 (2), or a person to whom the provider has delegated its obligations under an
             1429      agreement or this chapter has refused to permit the administrator to make an examination
             1430      authorized by this chapter, failed to comply with Subsection 13-42-132 (2)(b) [within] no later
             1431      than 15 days after request, or made a material misrepresentation or omission in complying with
             1432      Subsection 13-42-132 (2)(b); or
             1433          (e) the provider has not responded within a reasonable time and in an appropriate
             1434      manner to communications from the administrator.
             1435          (3) If a provider becomes insolvent, the provider shall continue to provide
             1436      debt-management services to an individual with whom the provider has an agreement until:
             1437          (a) with the administrator's approval, the provider transfers the agreement to another
             1438      registered provider; or
             1439          (b) the provider returns to the individual all unexpended money that is under the
             1440      provider's control.
             1441          [(3)] (4) If a provider does not comply with Subsection 13-42-122 [(6)](8) or if the
             1442      administrator otherwise finds that the public health or safety or general welfare requires
             1443      emergency action, the administrator may order a summary suspension of the provider's
             1444      registration, effective on the date specified in the order.
             1445          [(4)] (5) If the administrator suspends, revokes, or denies renewal of the registration of
             1446      a provider, the administrator may seek a court order authorizing seizure of any or all of the
             1447      money in a trust account required by Section 13-42-122 , books, records, accounts, and other
             1448      property of the provider which are located in this state.
             1449          [(5)] (6) If the administrator suspends or revokes a provider's registration, the provider
             1450      may appeal and request a hearing pursuant to Title 63G, Chapter 4, Administrative Procedures
             1451      Act.


             1452          Section 29. Section 13-42-135 is amended to read:
             1453           13-42-135. Private enforcement.
             1454          (1) If an individual voids an agreement pursuant to Subsection 13-42-125 (2), the
             1455      individual may recover in a civil action all money paid or deposited by or on behalf of the
             1456      individual pursuant to the agreement, except amounts paid to creditors, in addition to the
             1457      recovery under Subsections (3)(c) and (d).
             1458          (2) If an individual voids an agreement pursuant to Subsection 13-42-125 (1), the
             1459      individual may recover in a civil action three times the total amount of the fees, charges,
             1460      money, and payments made by the individual to the provider, in addition to the recovery under
             1461      Subsection (3)(d).
             1462          (3) Subject to Subsection (4), an individual with respect to whom a provider or other
             1463      person violates this chapter may recover in a civil action from the provider, the person, and any
             1464      person that caused the violation:
             1465          (a) compensatory damages for injury, including noneconomic injury, caused by the
             1466      violation;
             1467          (b) except as otherwise provided in Subsection (4) and subject to adjustment of the
             1468      dollar amount pursuant to Subsection 13-42-132 (6), with respect to a violation of Section
             1469      13-42-117 , 13-42-119 , 13-42-120 , 13-42-121 , 13-42-122 , 13-42-123 , 13-42-124 , 13-42-126 , or
             1470      13-42-127 , or Subsection 13-42-128 (1), (2), or (4), the greater of the amount recoverable under
             1471      Subsection (3)(a) or $5,000;
             1472          (c) punitive damages; and
             1473          (d) reasonable [attorney's] attorney fees and costs.
             1474          (4) In a class action, except for a violation of Subsection 13-42-128 (1)[(e)](f), the
             1475      minimum damages provided in Subsection (3)(b) do not apply.
             1476          [(5) In addition to the remedy available under Subsection (3), if a provider violates an
             1477      individual's rights under Section 13-42-120 , the individual may recover in a civil action all
             1478      money paid or deposited by or on behalf of the individual pursuant to the agreement, except for
             1479      amounts paid to creditors.]
             1480          [(6)] (5) A provider is not liable under this section for a violation of this chapter if the
             1481      provider proves that the violation was not intentional and resulted from a good-faith error
             1482      notwithstanding the maintenance of procedures reasonably adapted to avoid the error. An error


             1483      of legal judgment with respect to a provider's obligations under this chapter is not a good-faith
             1484      error. If, in connection with a violation, the provider has received more money than authorized
             1485      by an agreement or this chapter, the defense provided by this Subsection [(6)] (5) is not
             1486      available unless the provider refunds the excess [within] no later than two business days of
             1487      learning of the violation.
             1488          [(7)] (6) The administrator shall assist an individual in enforcing a judgment against
             1489      the surety bond or other security provided under Section 13-42-113 or 13-42-114 .
             1490          Section 30. Section 13-42-137 is amended to read:
             1491           13-42-137. Statute of limitations.
             1492          (1) An action or proceeding brought pursuant to Subsection 13-42-133 (1), (2), or (3)
             1493      shall be commenced [within] no later than four years after the conduct that is the basis of the
             1494      administrator's complaint.
             1495          (2) An action brought pursuant to Section 13-42-135 shall be commenced [within] no
             1496      later than two years after the latest of:
             1497          (a) the individual's last transmission of money to a provider;
             1498          (b) the individual's last transmission of money to a creditor at the direction of the
             1499      provider;
             1500          (c) the provider's last disbursement to a creditor of the individual;
             1501          (d) the provider's last accounting to the individual pursuant to Subsection
             1502      13-42-127 (1);
             1503          (e) the date on which the individual discovered or reasonably should have discovered
             1504      the facts giving rise to the individual's claim; or
             1505          (f) termination of actions or proceedings by the administrator with respect to a
             1506      violation of the chapter.
             1507          (3) The period prescribed in Subsection (2)(e) is tolled during any period during which
             1508      the provider or, if different, the defendant has materially and willfully misrepresented
             1509      information required by this chapter to be disclosed to the individual, if the information so
             1510      misrepresented is material to the establishment of the liability of the defendant under this
             1511      chapter.
             1512          Section 31. Section 13-42-139 is amended to read:
             1513           13-42-139. Relation to Electronic Signatures in Global and National Commerce


             1514      Act.
             1515          This chapter modifies, limits, and supersedes the [federal] Electronic Signatures in
             1516      Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify,
             1517      limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize
             1518      electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C.
             1519      Section 7003(b).


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