(a) A provider may not, directly or indirectly:
Misappropriate or misapply money held in trust;
Settle a debt on behalf of an individual without the individual's agreement to thesettlement terms pursuant to a settlement agreement or other valid contractual agreement executed by the individual;
Exercise or attempt to exercise a power of attorney after an individual has terminatedan agreement;
Initiate a transfer from an individual's account at a bank or with another person unless the transfer is:
A return of money to the individual; or
Before termination of an agreement, properly authorized by the agreement and thispart 2, and for:
Payment to one or more creditors pursuant to a plan; or
Payment of a fee;
Offer a gift or bonus, premium, reward, or other compensation to an individual forexecuting an agreement;
Offer, pay, or give a gift or bonus, premium, reward, or other compensation to aperson for referring a prospective customer, except for a sales lead, if the person making the referral has a financial interest in the outcome of debt-management services provided to the customer, unless neither the provider nor the person making the referral communicates to the prospective customer the identity of the source of the referral;
Receive a bonus, commission, or other benefit for referring an individual to a person;
Structure a plan in a manner that would result in a negative amortization of any of anindividual's debts, unless a creditor that is owed a negatively amortizing debt agrees to refund or waive the finance charge upon payment of the principal amount of the debt;
Compensate its employees on the basis of a formula that incorporates the number ofindividuals the employee induces to enter into agreements;
Settle a debt or lead an individual to believe that a payment to a creditor is insettlement of a debt to the creditor unless, at the time of settlement, the individual receives a certification by the creditor that the payment is in full settlement of the debt;
Make a representation that:
The provider will furnish money to pay bills or prevent attachments;
Payment of a certain amount will permit satisfaction of a certain amount or range ofindebtedness; or
Participation in a plan will or may prevent litigation, collection activity, garnishment, attachment, repossession, foreclosure, eviction, or loss of employment;
Misrepresent that it is authorized or competent to furnish legal advice or performlegal services;
Represent that it is a not-for-profit entity unless it is organized and properly operating as a not-for-profit under the law of the state in which it was formed or that it is a taxexempt entity unless it has received certification of tax-exempt status from the federal internal revenue service; except that, if the provider represents that it is a not-for-profit entity and the provider does not have tax-exempt status under section 501 (c) (3) of the federal "Internal Revenue Code of 1986", as amended, the provider shall state, in a clear and conspicuous manner and in close proximity to the representation: "We are not an educational, charitable, or religious organization granted tax-exempt status by the Internal Revenue Service."
Take a confession of judgment or power of attorney to confess judgment against anindividual;
Employ an unfair, unconscionable, or deceptive act or practice, including the knowing omission of any material information; or
Advise, encourage, or suggest to the individual not to make a payment to creditorsunder the plan.
(b) If a provider furnishes debt-management services to an individual, the provider may not, directly or indirectly:
Purchase a debt or obligation of the individual;
Receive from or on behalf of the individual:
A promissory note or other negotiable instrument other than a check or a demanddraft; or
A post-dated check or demand draft;
Lend money or provide credit to the individual, except as a deferral of a settlementfee at no additional expense to the individual;
Obtain a mortgage or other security interest from any person in connection with theservices provided to the individual;
Except as permitted by federal law, disclose the identity or identifying information ofthe individual or the identity of the individual's creditors, except to:
The administrator, upon proper demand;
A creditor of the individual, to the extent necessary to secure the cooperation of thecreditor in a plan; or
The extent necessary to administer the plan;
Except as otherwise provided in section 5-19-223 (d)(2), provide the individual lessthan the full benefit of a compromise of a debt arranged by the provider;
Charge the individual for or provide credit or other insurance, coupons for goods orservices, membership in a club, access to computers or the internet, or any other matter not directly related to debt-management services or educational services concerning personal finance; or
Furnish legal advice or perform legal services, unless the person furnishing that advice to or performing those services for the individual is licensed to practice law.
This part 2 does not authorize any person to engage in the practice of law.
A provider may not receive a gift or bonus, premium, reward, or other compensation,directly or indirectly, for advising, arranging, or assisting an individual in connection with obtaining an extension of credit or other service from a lender or service provider, except for educational or counseling services required in connection with a government-sponsored program.
Unless a person supplies goods, services, or facilities generally and supplies them tothe provider at a cost no greater than the cost the person generally charges to others, a provider may not purchase goods, services, or facilities from the person if an employee or a person that the provider should reasonably know is an affiliate of the provider: (1) Owns more than ten percent of the person; or
(2) Is an employee or affiliate of the person.
Source: L. 2017: Entire article added with relocations, (HB 17-1238), ch. 260, p. 1161, § 4, effective August 9.
Editor's note: This section is similar to former § 12-14.5-228 as it existed prior to 2017.