1. The bond, letter of credit or certificate of deposit filed pursuant to NRS 599B.100 must be held in trust for consumers injured by the seller.
2. Any consumer who is injured by the bankruptcy of the seller or his or her breach of any agreement entered into in his or her capacity as a registrant may bring and maintain an action to recover against the bond, letter of credit or certificate of deposit.
3. In addition to the remedy provided by subsection 2, a consumer may file with the Division a claim against a bond, letter of credit or certificate of deposit filed pursuant to NRS 599B.100 if he or she:
(a) Has purchased or received goods or services from a registrant;
(b) Was harmed by that registrant’s breach of any agreement entered into in his or her capacity as a registrant; and
(c) Can show that he or she is entitled to a refund pursuant to subsection 1 of NRS 599B.190.
No other person is entitled to bring an action against the bond, letter of credit or certificate of deposit pursuant to this subsection.
4. The Division shall audit each claim to determine whether the consumer is entitled to receive a refund pursuant to subsection 1 of NRS 599B.190. The Division may request the consumer and the registrant, or either of them, to provide information to assist in the audit.
5. After the Division has completed its audit, it shall schedule a hearing and notify the registrant and the consumer of its intent to take action or to decline to take action. If the Division decides that it will take action against the bond, letter of credit or certificate of deposit, it shall notify the registrant not less than 10 days before the date set for the hearing to appear and show cause why the Division should not take the intended action. If the Division decides that it will not take action against the bond, letter of credit or certificate of deposit of a registrant on behalf of the consumer, the Division shall notify the consumer not less than 10 days before the date set for the hearing to appear and show cause why the Division should not decline to take action.
6. If, upon hearing, the Commissioner determines that there are sufficient grounds to take the intended action against the bond, letter of credit or certificate of deposit, or if the registrant or the consumer fails to appear and show cause why the Division should not take the intended action, the Commissioner shall take the action provided for in the Division’s notice of intended action.
7. The Division shall not distribute or cause to be distributed to the consumer more than the actual amount of money that the consumer paid for the product, service or premium. The Division shall not distribute or cause to be distributed to the consumer the value of a premium if the value exceeds the amount paid by the consumer.
8. Except as otherwise provided in subsection 10, if the total amount of money awarded to consumers against a bond does not exceed the amount of that bond, the surety on the bond shall distribute the money from the bond to the consumers according to the terms of the order of the Commissioner and is thereby relieved of all liability pursuant to the bond.
9. If the total amount of money awarded to consumers against a bond exceeds the amount of that bond, or if the security is held in the form of a letter of credit or a certificate of deposit, the surety on the bond or the issuer of the letter of credit or certificate of deposit shall deposit the amount of the security with the Division and is thereby relieved of all liability pursuant thereto. Except as otherwise provided in subsection 10, the Division shall distribute to each consumer his or her pro rata share of the proceeds of the bond, letter of credit or certificate of deposit.
10. Before distributing the proceeds of the bond, letter of credit or certificate of deposit to the consumer, the Division:
(a) Shall allow the registrant a reasonable amount of time within which to resolve the claims.
(b) Is entitled to deduct from the proceeds of the bond, letter of credit or certificate of deposit the Division’s or Commissioner’s costs of hearing, auditing and determining the claim, including attorney’s fees.
11. A consumer who receives less than a full refund may bring an action in a court of competent jurisdiction against the registrant to recover the unpaid balance.
12. The Commissioner may adopt regulations regarding the distribution of the money to claimants pursuant to this section, including the conduct of hearings relating to such distributions.
(Added to NRS by 1993, 2096; A 1995, 938; R temp. 2009, 2732; R temp. 2011, 2652; R temp. 2013, 1054; R temp. 2015, 3653; R temp. 2017, 2254; R temp. 2019, 2501, expires by limitation on June 30, 2021)