HB 336 -- Uniform Debt-Management Services Act

Sponsor:  Burnett

This bill establishes the Uniform Debt-Management Services Act to
regulate debt-management services.  In its main provisions, the
bill:

(1)  Requires a debt-service company to register with the
Attorney General by submitting detailed information including its
financial condition, the identity of its principals, locations at
which the service will be offered, a copy of the form used for
agreements with debtors, and its business history in other
jurisdictions;

(2)  Requires a debt-service company to carry an insurance policy
against fraud, dishonesty, and theft in an amount of at least
$250,000 and provide a security bond of at least $50,000 which
has the Attorney General as a beneficiary;

(3)  Requires a debt-service company to renew its registration
annually;

(4)  Requires a debt-service company to disclose its services and
any fees as well as any risks or benefits of entering into the
debt-management service agreement;

(5)  Allows for a penalty-free, three-day cancellation of the
agreement by the debtor or cancellation within 30 days, subject
to specified fees;

(6)  Allows a debt-service company to terminate the agreement if
the required payments are more than 60 days late;

(7)  Requires a debt-service company to keep any debtor payments
in a separate trust account that may not be used to hold any
other company funds;

(8)  Prohibits a debt-service company from misappropriating trust
funds, settling for more than 50% of a debt with a creditor
without a debtor's consent, or representing that a settlement has
occurred without certification from the creditor;

(9)  Authorizes the Attorney General to investigate debt-service
companies, order an individual to cease and desist debt
counseling services, bring civil actions, and assess civil
penalties of up to $10,000;

(10)  Allows an individual to bring a civil action for
compensatory damages, including triple damages, if a debt-service
company obtains payments not authorized in the bill; and

(11)  Specifies that a proceeding brought by the Attorney General
must commence within four years of the action and within two
years for a proceeding brought by an individual.

The bill becomes effective August 28, 2010.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:24 am