HB 1763 -- 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 and to pay a fee as established by the Attorney
General;

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

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

(4)  Requires a debt-service company to provide an itemized list
of goods and the charges for each 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
an individual fails to make the required payments for 60 days;

(7)  Requires a debt-service company to keep a debtor's 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 the principal amount of a
debt without the debtor's and creditor's consent, or settling a
debt or leading an individual to believe that a settlement has
occurred without a 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, 2011.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:11 pm