M.C.L.A.
Ch. 445, Prec. 445.1821
P.A.1994,
NO. 160, IMD. EFF. JUNE 13, 1994
AN ACT to prohibit certain methods, acts, and practices of credit services organizations; to prescribe remedies and penalties; and to repeal certain acts and parts of acts.
M.C.L.A. 445.1822
Michigan
Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit
Services Protection Act (Refs & Annos)
445.1822. Definitions
Sec. 2. As used in this act:
(a) "Buyer" means a person who is solicited to purchase
or who purchases the services of a credit services organization.
(b) "Credit services organization" means, except as
otherwise provided in subdivision (c), a person who, in return for
consideration, attempts to sell, provide, or perform 1 or more of the
following:
(i) The
improvement of a person's credit record, history, or rating.
(ii) The obtainment
of an extension of credit.
(iii) Advice or
assistance regarding the improvement or repair of a person's credit record,
history, or rating.
(iv) Advice or
assistance regarding the obtainment of an extension of credit.
(v) Advice or
assistance regarding foreclosure of a real estate mortgage.
(vi) Serve as an
intermediate between a debtor and a creditor on behalf of the debtor regarding
credit that was extended prior to any agreement to have the credit services
organization serve as an intermediate.
(c) Credit services organization does not include any of the
following:
(i) A person who
is licensed in this state or otherwise authorized to make loans or extend
credit under any state statute while engaged in the regular course of business
under that state statute, other than Act No. 326 of the Public Acts of 1966,
being sections 438.31 to 438.33 of the Michigan
Compiled Laws.
(ii) A federal or
state chartered bank, credit union, savings bank, or savings and loan
institution, an entity of the federally chartered farm credit system, or any
solely owned subsidiary thereof.
(iii) A person
licensed under the occupational code, Act No. 299 of the Public Acts of 1980,
being sections 339.101 to 339.2721 of the Michigan
Compiled Laws, when engaged in the regular course of business.
(iv) A person licensed to practice law in this state if the
person renders services within the course of that person's practice as an
attorney and does not engage in the business of a credit services organization
on a regular and continuing basis.
(v) A judicial
officer or other person acting under court order.
(vi) A consumer
reporting agency, as defined in section 603 of the fair credit reporting act,
title VI of the consumer credit protection act, Public Law 90- 321, 15 U.S.C. 1681a,
while engaged in the regular course of the credit reporting business.
(vii) A debt
management business licensed under the debt management act, Act No. 148 of the
Public Acts of 1975, being sections 451.411 to 451.437 of the Michigan
Compiled Laws, while engaged in the regular course of business under
the debt management act.
(viii) An
investment adviser or broker-dealer registered under the uniform securities
act, Act No. 265 of the Public Acts of 1964, being sections 451.501 to 451.818 of the Michigan
Compiled Laws.
(ix) A nonprofit
corporation that is exempt from taxation under section 501c(3) of the
(x) A finance
subsidiary of a manufacturing corporation.
(d) "Extension of credit" means the right to defer
payment of debt or to incur debt.
(e) "Person" means an individual, partnership,
corporation, association, or other legal entity.
CREDIT(S)
P.A.1994, No. 160, § 2,
Imd. Eff. June 13, 1994.
M.C.L.A. 445.1823
Michigan
Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit
Services Protection Act (Refs & Annos)
445.1823. Credit services organizations;
prohibited activities
Sec. 3. A credit
services organization, a salesperson, agent, or representative of a credit
services organization, or an independent contractor who sells or attempts to
sell the services of a credit services organization shall not do any of the
following:
(a) Charge or receive
from a buyer who is seeking a loan or extension of credit any money or other
valuable consideration before the closing of the loan or extension of credit.
(b) Charge a buyer or
receive from a buyer of services money or other valuable consideration before
completing performance of all services the credit services organization has
agreed to perform for the buyer.
(c) Charge a buyer or
receive from a buyer money or other valuable consideration solely for referral
to a retail seller who will or may extend credit to the buyer if the credit
that is or may be extended to the buyer is substantially the same as that
available to the general public.
(d) Make or use a false
or misleading representation in the offer or sale of the services of a credit
services organization.
(e) Engage, directly or
indirectly, in a fraudulent or deceptive act, practice, or course of business
in connection with the offer or sale of the services of a credit services
organization including, but not limited to, both of the following:
(i) Guaranteeing
or otherwise stating that the organization is able to delete an adverse credit
history unless the representation clearly discloses, in a manner equally as
conspicuous as the guarantee, that this can be done only if the credit history
is inaccurate or obsolete and is not claimed to be accurate by the creditor who
submitted the information.
(ii) Guaranteeing
or otherwise stating that the organization is able to obtain an extension of
credit regardless of the buyer's previous credit problems or credit history
unless the representation clearly discloses, in a manner equally as conspicuous
as the guarantee, the eligibility requirements for obtaining an extension of
credit.
(f) Fail to perform the
agreed services within 90 days following the date the buyer signs the contract
for services.
(g) Counsel or advise a buyer to make a statement that is known,
or should be known, to be untrue or misleading to a consumer credit reporting
agency, a person who has extended credit to a buyer, or to a person to whom the
buyer is applying for an extension of credit.
(h) Remove, assist, or advise the buyer to remove adverse
information from the buyer's credit record which is accurate and not obsolete.
(i) Create, assist, or advise the buyer to create a new credit
record by using a different name, address, social security number, or employer
identification number.
(j) Submit a buyer's dispute to a consumer credit reporting agency
without the buyer's knowledge.
(k) Provide a service to a buyer that is not pursuant to a written
contract that complies with this section.
M.C.L.A.
445.1824
Michigan
Compiled Laws Annotated Currentness
Chapter 445. Trade and Commerce
Credit
Services Protection Act (Refs & Annos)
445.1824. Actions
Sec. 4. (1) Except as
provided in subsection (2), the attorney general, a county prosecutor, or a
buyer may bring an action to do 1 or more of the following:
(a) Enjoin a person who
is engaged or is about to engage in a method, act, or practice that violates
this act.
(b) Obtain a declaratory
judgment that a method, act, or practice violates this act.
(c) Recover actual
damages consisting of an amount not less than the amount paid by the buyer to
the credit services organization, plus reasonable attorney fees and court
costs. The court may also award the buyer any punitive damages that it
considers proper.
(2) A person shall not
bring an action under this act more than 4 years after the date of execution of
the contract for services to which the action relates.
(3) In an action under
this act, the burden of proving an exemption under section 2(c) [FN1] is on the person claiming the
exemption.
(4) This act does not
limit or prohibit any other legal remedy available to the attorney general, a
county prosecutor, or a buyer.
M.C.L.A.
445.1825
Chapter 445. Trade and Commerce
Credit
Services Protection Act (Refs & Annos)
445.1825. Violations; penalties; recovery of
fees and other charges
Sec. 5. (1) A person who
violates this act is guilty of a misdemeanor punishable by imprisonment for not
more than 90 days, or a fine of not more than $1,000.00, or both. Each
transaction in violation of this act constitutes a separate offense.
(2) A credit services
organization that violates this act is barred from recovering any fees or other
charges from a buyer.
Case Law
I identified no significant cases construing this statutes.