DC CODE § 28-4601
Chapter
46. Consumer Credit Service Organizations.
Division V. Local Business Affairs
Title 28. Commercial Instruments and Transactions.
Subtitle
II. Other Commercial Transactions.
Chapter 46. Consumer Credit Service Organizations.
§ 28-4601. Definitions.
For the purposes of this chapter the term:
(1) "Consumer" means any person who is solicited to purchase or who purchases the services of a consumer credit service organization.
(2)(A) "Consumer credit
service organization" means any person who, with respect to the extension
of credit by others, sells, provides, performs, or represents that he or she
can sell, provide, or perform, in return for the payment of money or other
valuable consideration, any of the following services:
(i)
Improvement of a consumer's credit record, history, or rating;
(ii) Obtain an extension of
credit for a consumer; or
(iii)
Provide advice or assistance to a consumer regarding any matter related to the
consumer's personal, household, or family credit.
(B) A consumer credit service
organization shall include a salesperson, agent, or representative of a
consumer credit service organization.
(C) A consumer credit service
organization shall include an independent agent who sells or attempts to sell
the services of a consumer credit service organization.
(D) A consumer credit service
organization does not include:
(i)
Any person authorized to make a loan or extension of credit under the laws of
the District of Columbia ("District") or the United States who is
subject to regulation and supervision by the District or the United States, or
a lender approved by the United States Secretary of Housing and Urban
Development for participation in any mortgage insurance program under the
National Housing Act, approved June 27, 1934 (48 Stat. 1246; 12 U.S.C. 1701 et seq.);
(ii) Any bank, savings bank, or
savings and loan institution whose deposits or accounts are eligible for
insurance by the Federal Deposit Insurance Corporation or the Federal Savings
and Loan Insurance Corporation, or a subsidiary of any bank, savings bank, or
savings and loan institution with deposits or accounts that are eligible for
insurance by the Federal Deposit Insurance Corporation or the Federal Savings
and Loan Corporation;
(iii)
Any credit union doing business in the District pursuant to the Federal Credit
Union Act, approved August 1, 1964 (78 Stat. 377; § 26-501 et seq.);
(iv) Any nonprofit organization
exempt from taxation under Section 501(c)(3) of the Internal Revenue Code of 1954,
approved August 16, 1954 (68A Stat. 3; 26 U.S.C. 1 et seq.);
(v) Any person who operates a
collection agency pursuant to the laws of the District;
(vi) Any person licensed to
practice law in the District if the person renders consumer credit services within
the course and scope of his or her practice;
(vii) Any broker-dealer
registered with the United States Securities and Exchange Commission or the
United States Commodity Futures Trading Commission if the broker-dealer is
acting within the scope of the applicable federal securities or commodity
futures laws and regulations; or
(viii) Any consumer reporting
agency as defined in the Federal Fair Credit Reporting Act ("Fair Credit
Reporting Act"), approved October 26, 1970 (84 Stat. 1128; 15 U.S.C. sec. 1681-1681t).
(3) "Extension of credit" means the right to defer
payment of a debt or to incur a debt and defer payment of the debt as offered
or granted primarily for personal, family, or household purposes.
(4) "Person" means any individual, corporation, firm,
agency, company, joint venture, association, organization,
partnership, society, or joint stock company.
§ 28-4602. Registration
statement.
(a) A consumer credit service organization that operates in the
District shall:
(1) Register with the Mayor by filing, on a form prescribed by the Mayor, a registration statement and paying a registration fee of $300; and
(2) Pay an annual fee of $200
before April 2 of each subsequent year or at any other time established by
regulation.
(b) If there is a change in any of the information provided in the
registration statement, the registrant shall report the change in writing to
the Mayor within 10 days of the change.
(c) If, in the opinion of the Mayor, the registration statement
fails to disclose sufficient information required by this chapter or the rules
issued pursuant to this chapter, the registrant shall file in writing any
additional information requested by the Mayor. The Mayor
shall not accept the registration statement until all the requested information
is furnished.
§ 28-4603. Prohibited
acts.
A consumer credit service organization shall not:
(1) Charge or receive money or other valuable consideration prior to completion of the services the consumer credit service organization has agreed to perform for a consumer, unless the consumer credit service organization has obtained a surety bond or established a trust account as required by § 28-4604;
(2) Charge or receive money or
other valuable consideration solely for referral of a consumer to a retail
seller who may extend credit to the consumer if the credit that is to be
extended to the consumer is based upon substantially the same terms as credit
available to the general public;
(3) Make any statement or
counsel or advise a consumer to make any statement regarding the consumer's
creditworthiness, credit standing, or credit capacity that the consumer credit
service organization knows or reasonably should have known is false or
misleading to the following:
(A) A credit reporting agency;
(B) A person who has extended
credit to a consumer; or
(C) A
person to whom a consumer is applying for an extension of credit;
(4) In connection with the
offer or sale of the services:
(A) Make or use a false or
misleading representation;
(B) Fail to disclose a material
fact, policy, or method; or
(C) Directly or indirectly
engage in an act or course of business to defraud or deceive a consumer;
(5) Make or use as a part of
its trade name, or employ in any communication, correspondence, notice,
advertisement, circular, or other writing or publication, the word
"repair" in a manner that reasonably conveys the impression or belief
that the organization is able to provide a consumer with an immediate
correction or rehabilitation of the consumer's credit problem;
(6)
Attempt to waive any provision of this chapter or coerce, influence, or direct
a consumer to waive any provision of this chapter or any rule issued pursuant
to this chapter; or
(7) Fail
or refuse to comply with any provision of this chapter or any rule issued
pursuant to this chapter.
§ 28-4604. Bond
requirements.
(a) A consumer credit service organization that charges or
receives money or other valuable consideration prior to completion of services
under a contract or agreement shall obtain a surety bond or establish a trust
account that guarantees a refund to a consumer of any money or other valuable
consideration paid by the consumer. The bond shall be in the amount of $25,000
and issued by a surety company legally allowed to do business in the District. A
trust account established to guarantee a refund to a consumer shall have a
minimum balance of $25,000 and be deposited at a federally insured bank or
savings and loan association located in the District.
(b) Funds from the bank account or surety bond shall be used to
refund payment to a consumer who cancels a contract, to pay any damages
assessed against a consumer credit service organization in an action arising
from a violation of this chapter, or to settle a consumer complaint filed with
the Mayor against a consumer credit service organization.
§ 28-4605. Disclosure;
written agreement required.
(a) Prior to the execution of a contract or agreement between a
consumer and a consumer credit service organization or prior to the receipt by
the consumer credit service organization of any money or other valuable
consideration, whichever occurs first, the consumer credit service organization
shall provide the consumer with a statement that contains the information
required pursuant to subsection (b) of this section. The consumer credit service
organization shall maintain for 3 years a copy of the statement signed by the
consumer acknowledging receipt of the statement required by subsection (b) of
this section.
(b) The information statement shall include the following:
(1) A complete and accurate statement of a consumer's right to review any file relating to the consumer that is maintained by the consumer credit reporting agency, as provided under the Fair Credit Reporting Act (15 U.S.C. 1681- 1681t);
(2) A statement that a consumer may review his or her consumer
credit reporting agency's file at no charge if a request is made to the
consumer credit reporting agency within 30 days after receiving notice that
credit has been denied;
(3) The approximate amount that the consumer credit service
organization will charge a consumer to review his or her consumer credit
reporting agency's file if a request has not been made within 30 days after
receiving notice that credit has been denied;
(4) A statement of a consumer's right to dispute the completeness
or accuracy of any information contained in any file on the consumer maintained
by a consumer credit service organization as allowed by applicable District or
federal law;
(5) A complete and detailed
description of the services to be performed by the consumer credit service
organization for a consumer and the total amount the consumer will be charged
for the services;
(6) A statement that asserts a
consumer's right to recover under a bond or trust account established pursuant
to this chapter;
(7)(A) The name and address of
the trust account depository and the trustee and the account number of the
trust account; or
(B) The
name and address of the surety company that issued the bond and the account
number and date of the surety bond; and
(8) A statement that asserts a
consumer's right to file a dispute directly with the consumer credit reporting
agency in accordance with the provisions of the Fair Credit Reporting Act.
(c) Any contract between a consumer and the consumer credit
service organization for the purchase of the services of the consumer credit
service organization shall be in writing, dated, signed by the consumer, and
include the following:
(1) The terms and conditions of payment, including the total of all the payments to be made by the consumer, regardless of whether the payments are to be made to the consumer credit service organization or to another person;
(2) A full and detailed
description of the services to be performed by the consumer credit service
organization for the consumer, including:
(A) A statement concerning the
specific detrimental information with respect to a consumer's credit that the
credit service organization proposes to remedy;
(B) Any guarantee or promise of
full or partial refund; and
(C) The estimated completion
date or estimated length of time necessary for completion
of the services; and
(3) The address of the consumer
credit service organization's principal place of business and the name and
address of the organization's registered agent authorized to receive service of
process.
(d) The contract shall be accompanied by a notice of cancellation
that shall include the following:
(1) Notice of a consumer's right to cancel a contract within 5 calendar days of signing the contract;
(2) A provision that states
that a consumer may cancel by personally delivering a copy of a signed and
dated cancellation notice or by sending a notice of a cancellation by certified
mail, return receipt requested, to the consumer credit service organization;
and
(3) A provision that a consumer
is entitled to receive a reimbursement within 10 days of receipt of the
cancellation notice.
(e) The consumer credit service organization shall provide a
consumer with a copy of the information statement, contract, disclosure statement, notice of cancellation, and any other document required by this
chapter or the rules issued pursuant to this chapter.
§ 28-4606. Enforcement.
(a) Except as provided in this chapter, no registration pursuant
to section 3 [§ 28-4602] shall be suspended or revoked without a hearing pursuant to title 1 of the
District of Columbia Administrative Procedure Act ("APA"), approved
October 21, 1968 (82 Stat. 1204; § 2-501 et
seq.).
(b) In any proceeding pursuant to this chapter, the burden of
proving an exemption or exception is upon the person who claims the exemption
or exception.
(c) This section does not prohibit the enforcement by any person
of a right provided by this chapter or any other applicable District or federal
law, rule, or regulation.
§ 28-4607. Penalties.
(a) Any person who violates any provision of this chapter shall be
fined not more than $500 per violation, imprisoned for not more than 1 year, or
both.
(b) Civil fines, penalties, and fees may be imposed as alternative
sanctions for any infraction of the provisions of this act [this chapter] or
the rules authorized by this chapter, pursuant to subchapters I and II of
Chapter 18 of Title 2.
(c) Any consumer injured by a violation of this chapter may bring
an action for recovery of damages within 3 years after the signing of the
contract. Judgment shall be entered for actual damages and shall in no case be
less than the amount paid by the consumer to the consumer credit service
organization, plus reasonable attorney's fees and actual costs incurred to
recover the damages. An award may also be entered for punitive damages.
(d) The remedies provided pursuant to this chapter are in addition
to the remedies available pursuant to any other law.
§ 28-4608. Rulemaking.
(a) The Mayor shall issue proposed rules, pursuant to subchapter I
of Chapter 5 of Title 2, to implement the provisions of this chapter. The
proposed rules shall be submitted to the Council for a 45-day period of review,
excluding Saturdays, Sundays, legal holidays, and days of Council recess. If
the Council does not approve or disapprove the proposed rules, in whole or in
part, by resolution within this 45-day review period, the proposed rules shall
be deemed approved. Nothing in this section shall affect any requirements
imposed upon the Mayor by subchapter I of Chapter 5 of Title 2.
(b) The proposed rules shall include, but not be limited to the
following:
(1) Registration requirements;
(2) Sample disclosure
provisions;
(3) Contract and notice of
cancellation forms; and
(4) A schedule of civil fines.
(c) The Mayor may issue emergency rules without prior Council
approval, which shall be effective for not more than 90 days and are consistent
with subchapter I of Chapter 5 of Title 2.
Current through March 1,
2007.
END OF DOCUMENT
Case Law
I
identified no cases construing the act.