13-11-12. Advertising and marketing practices.
667 words·~3 min read·
/nd/title-13/chapter-13-11-debt-settlement-providers/13-11-12·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
1. A debt-settlement provider may not represent, expressly or by implication, any results
or outcomes of its debt-settlement services in any advertising, marketing, or other
communication to consumers unless the debt-settlement provider possesses
substantiation for the representation at the time the representation is made.
2. A debt-settlement provider may not make, expressly or by implication, any unfair or
deceptive representations, or any omissions of material facts, in any of its advertising
or marketing communications concerning debt-settlement services. 3. All advertising and marketing communications concerning debt-settlement services
must disclose the following material information clearly and conspicuously:
Debt-settlement services are not appropriate for everyone. Failure to pay your monthly
bills in a timely manner will result in increased balances and will harm your credit
rating. Not all creditors may agree to reduce principal balance, and they may pursue
collection, including lawsuits.
13-11-13. Contracts, books, and records. 1. Upon request, each debt-settlement provider shall furnish to the commissioner a copy
of the contract entered between the debt-settlement provider and the debtor. The
debt-settlement provider shall furnish the debtor with a copy of the written contract at
the time of execution which sets forth the charges, if any, agreed upon for the services
of the debt-settlement provider. 2. Each debt-settlement provider shall maintain records and accounts that will enable any
debtor contracting with the debt-settlement provider, at any reasonable time, to
ascertain the status of all the debtor's accounts with the debt-settlement service
provider, including the amount of any fees paid by the debtor, amount held in trust, if
applicable, settlement offers made and received on each of the debtor's accounts, and
legally enforceable settlements reached with the debtor's creditors. Within seven days
after a request for that information by the debtor, the debt-settlement provider shall
furnish a statement showing the total amount received and the total disbursements to
each creditor to any individual. Each debt-settlement provider shall issue a receipt for
each payment made by the debtor at a debt-settlement provider office. Each
debt-settlement provider shall prepare and retain in the file of each debtor a written
analysis of the debtor's income and expenses to substantiate that the plan of payment
is feasible and practical.
13-11-14. Trust funds - Requirements and restrictions. 1. All funds received by a debt-settlement provider or the provider's agent from and for
the purpose of paying bills, invoices, or accounts of a debtor constitute trust funds
owned by and belonging to the debtor from whom the funds were received. All such
funds received by the debt-settlement provider must be separated from the funds of
the debt-settlement provider not later than the end of the business day following
receipt by the debt-settlement provider. All such funds must be kept separate and
apart at all times from funds belonging to the debt-settlement provider or any of its
officers, employees, or agents and may be used for no purpose other than paying bills,
invoices, or accounts of the debtor. On or before the close of the business day
following receipt, all such trust funds received at the main or branch offices of a
debt-settlement provider must be deposited in a bank in an account in the name of the
debt-settlement provider-designated trust account, or by some other appropriate name
indicating that the funds are not the funds of the debt-settlement provider or its
officers, employees, or agents. 2. At least once every month, the debt-settlement provider shall render an accounting to
the debtor that itemizes the total amount received from the debtor, the total amount
paid each creditor, the amount of charges deducted, and any amount held in reserve,
if applicable, and the status of each of the debtor's enrolled accounts. In addition, a
debt-settlement provider shall provide such an accounting to a debtor within seven
days after written demand, but not more than three times per six-month period. 3. This chapter does not require the establishment of a trust account if no consumer
funds other than earned settlement fees are held or controlled by a debt-settlement
provider.