NH ST T.
XXXI,
Chapter
359-D. Credit Services Organizations
Title XXXI. Trade and Commerce (Refs & Annos)
Chapter
359-D. Credit Services Organizations (Refs & Annos)
359-D:1 Short Title.
This chapter may be cited as the "credit services regulation
act".
359-D:2 Definitions.
In this chapter:
II. (a) "Credit
services organization" means any person, who, with respect to the
extension of consumer credit by others, sells, provides, or performs, or
represents that he can or will sell, provide, or perform, in return for the
payment of money or other valuable consideration, a service for the express or
implied purpose of:
(1) Improving a buyer's credit record, credit history, or credit rating.
(2) Obtaining an extension of
consumer credit for a buyer.
(3) Providing advice or
assistance to a buyer with regard to the buyer's credit record,
credit history, or credit rating.
(b) "Credit services
organization" does not include:
(1) A depository institution
whose deposits are insured by the Federal Deposit Insurance Corporation, the
Federal Savings and Loan Insurance Corporation, or the National Credit Union
Administration Board, or a depository institution chartered by this state.
(2) Any nonprofit organization
exempt from taxation under section 501(c)(3) of the Internal Revenue Code.
(3) A real estate broker
licensed by this state and acting within the course and scope of his license.
(4) An attorney licensed by
this state or another state rendering services within the course and scope of
that license.
(5) Any broker-dealer
registered with the Securities and Exchange Commission or the Commodity Futures
Trading Commission acting within the course and scope of the regulations of
these commissions.
(6) Any consumer reporting
agency, as defined in RSA 359-B:3, VI, acting within the course and scope of that
chapter.
(7) Any person authorized to
make loans or extensions of credit under the laws of this state or the
III. "Extension of
credit" means the right to defer payment of debt or to incur debt and
defer its payment, offered or granted primarily for personal, family, or
household purposes.
IV. "Person" means any individual, partnership,
corporation, trust, estate, cooperative, association, or other entity.
359-D:3 Prohibited
Practices.
A credit services organization, its salespersons, agents, and
representatives, shall not:
I. Charge or receive any money or other valuable consideration
prior to the full and complete performance of the services which the credit
services organization has agreed to perform for the buyer, unless the credit
services organization has, in conformity to RSA 359-D:8,
either obtained a surety bond issued by a surety company admitted to do
business in this state or established a trust account at a federally insured
bank or savings and loan association located in this state. If a credit
services organization is in compliance, the salespersons, agents, and
representatives who sell the services of such organization shall not be
required to obtain the surety bond or establish the trust account provided for
by this chapter.
II. Charge or receive
any money or other valuable consideration solely for referral of the buyer to a
retail seller who will or may extend credit to the buyer, if the credit which
is or will be extended to the buyer is upon substantially the same terms as
those available to the general public.
III. Make, or counsel or advise any buyer to make, any statement
which is untrue or misleading and which is known, or which by the exercise or
reasonable care should be known, to be untrue or misleading, to a consumer
credit reporting agency or to any person who has extended credit to a buyer or
to whom a buyer is applying for an extension of credit, with respect to a
buyer's credit worthiness, credit standing, or credit capacity.
IV. Make or use any untrue or misleading representations in the
offer or sale of the services of a credit services organization or engage,
directly or indirectly, in any act, practice, or course of business which
operates or would operate as a fraud or deception upon any person in connection
with the offer or sale of the services of a credit services organization.
359-D:4 Information
Statement Required.
Prior to the execution of a contract or agreement between the
buyer and a credit services organization or prior to the receipt by the credit
services organization of any money or other valuable consideration, whichever
occurs first, the credit services organization shall provide the buyer a
statement in writing, containing all the information required by RSA 359-D:5.
The credit services organization shall maintain on file or microfilm for a
period of 2 years an exact copy of the statement, personally signed by the
buyer, acknowledging receipt of a copy of the statement.
359-D:5 Contents of
Information Statement.
The information statement shall include all of the following:
I. A complete and accurate statement of the buyer's right to
review any file on the buyer maintained by any consumer credit reporting
agency, and the right of the buyer to receive a copy of that file. The
statement shall include the statement that a copy of the buyer's file will be
furnished free of charge by the consumer credit reporting agency if requested
within 30 days of the buyer receiving notice of a denial of credit, and the
approximate price the buyer will be charged by the credit reporting agency for
a copy of the file.
II. A complete and accurate statement of the buyer's right to
dispute the completeness or accuracy of any item contained in any file on the
buyer maintained by any consumer credit reporting agency, as provided by RSA 359- D:6.
III. A complete and detailed description of the services to be
performed by the credit services organization for or on behalf of the buyer and
the total amount the buyer will have to pay, or become obligated to pay, for
the services.
IV. If the credit services organization is required to obtain a
surety bond or establish a trust account according to RSA 359-D:3, I,
the statement shall set forth both of the following:
(a) The buyer's right to proceed against the bond or trust account under the circumstances and in the manner set forth in RSA 359-D:8.
(b) The name and address of the
surety company which issued the bond, or the name and address of the depository
and the trustee and the account number of the trust account.
359-D:6 Requirements
for Contracts.
I. Every contract between the buyer and a credit services
organization for the purchase of the services of the credit services
organization shall be in writing, dated, and signed by the buyer, and shall
include all of the following:
(a) A conspicuous statement in size equal to at least 10 point bold type, in immediate proximity to the space reserved for the signature of the buyer, as follows: "You, the buyer, may cancel this contract at any time prior to midnight of the fifth day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right."
(b) The terms and conditions of
payment, including the total of all payments to be made by the buyer, whether
to the credit services organization or to some other person.
(c) A full and detailed
description of the services to be performed by the credit services organization
for the buyer, including all guarantees and all promises of full or partial
refunds, the estimated date by which such services are to
be performed, or estimated length of time for performing such services.
(d) The credit services
organization's principal business address and the name and address of its
agent, other than the secretary of state, in this state, authorized to receive
service of process.
II. The contract shall be accompanied by a completed form in
duplicate, captioned "Notice of Cancellation," which shall be
attached to the contract and easily detachable, and which shall contain in type
of at least 10 point the following statement written in the same language as
used in the contract:
"Notice of Cancellation"
"You may cancel this contract, without any penalty or
obligation, within 5 days from the date the contract is signed.
"If you cancel, any payment made by you under this contract
will be returned within 5 days following receipt by the seller of your
cancellation notice.
"To cancel this contract, mail or deliver a signed and dated
copy of this cancellation notice, or any other written notice, to
________________ at ___________________________________________ not later than
(name of seller) (address of seller) (place of business)
midnight __________.
(date)
"I hereby cancel this transaction."
__________ ___________________________________
(date) (purchaser's signature)
III. A copy of the fully completed contract and all other
documents the credit services organization requires the buyer to sign shall be
given to the buyer at the time they are signed.
359-D:7 Breach of
Contract.
The seller's breach of a contract under this chapter or of any
obligation arising therefrom shall constitute a violation of this chapter.
359-D:8 Requirements
for Surety Bonds.
If a credit services organization is required to obtain a surety
bond or establish a trust account according to RSA 359-D:3,
the following procedures shall be applicable:
I. If a bond is obtained, a copy of it shall be filed with the
office of the secretary of state. If a trust account is maintained,
notification of the depository, the trustee, and the account number shall be
filed with the office of the secretary of state.
II. The bond or trust account required shall be in favor of the
state for the benefit of any person who is damaged by any violation of this
chapter. The bond or trust account shall also be in favor of any person damaged
by such practices.
III. Any person claiming against the bond or trust account for a
violation of this chapter may maintain an action at law against the credit
services organization and against the surety or trustee. The surety or trustee
shall be liable only for actual damages and not the punitive damages permitted
under RSA 359-D:11.
The aggregate liability of the surety or trustee to all persons damaged by a
credit services organization's violation of this chapter shall in no event
exceed the amount of the trust account or bond.
IV. The bond or the trust account shall be in an amount equal to 5
percent of the total amount of the fees charged buyers by the credit services
organization under the contracts entered into between the credit services
organization and such buyers during the previous 12 months, but in no case
shall the bond be less than $5,000 or more than $25,000. The amount required
shall be adjusted once a year, no later than the tenth day of the first month
of the credit services organization's fiscal year.
359-D:9 Claiming Waiver
of Rights or Exemption.
I. Any waiver by a buyer of the provisions of this chapter shall
be deemed contrary to public policy and shall be void and unenforceable. Any
attempt by a credit services organization to have a buyer waive rights given by
this chapter shall constitute a violation of this chapter.
II. In any proceeding involving this chapter, the burden of
proving an exemption or an exception from a definition is upon the person
claiming it.
359-D:10 Penalties.
I. Any person who violates any provision of this chapter is guilty
of a misdemeanor. The superior court shall have jurisdiction in equity to
restrain and enjoin the violation of any provision of this chapter.
II. The duty to institute actions for violation of this chapter,
including equity proceedings to restrain and enjoin such a violation, is hereby
vested in the consumer protection and antitrust bureau of the department of
justice. The attorney general may prosecute misdemeanor actions or institute
equity proceedings, or both.
III. This section shall not be deemed to prohibit the enforcement
by any person of any right provided by this or any other law.
IV. The misdemeanor provision of this section does not apply to a
seller's breach of a contract subject to this chapter.
359-D:11 Damages.
Any buyer injured by a
violation of this chapter or by the credit services organization's breach of a
contract subject to this chapter may bring any action for recovery of damages.
Judgment shall be entered for actual damages, but in no case less than the
amount paid by the buyer to the credit services organization, plus reasonable
attorney's fees and costs. An award, if the trial court deems it proper, may be
entered for punitive damages
Case Law
I identified no significant cases construing this statute.