2013 Indiana Code TITLE 28. FINANCIAL INSTITUTIONS ARTICLE 1. DEPARTMENT OF FINANCIAL INSTITUTIONS CHAPTER 29. DEBT MANAGEMENT COMPANIES
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IC 28-1-29
Chapter 29. Debt Management Companies
IC 28-1-29-0.5
Inapplicability; attorneys; depository financial institutions;
third-party bill paying services
Sec. 0.5. (a) This chapter does not apply to:
(1) an attorney at law authorized to practice in Indiana; or
(2) persons under the supervision and control of an attorney at
law authorized to practice in Indiana;
to the extent the attorney's debt management services are incidental
to the attorney's practice of law.
(b) This chapter does not apply to a depository financial
institution (as defined in IC 28-1-1-6).
(c) This chapter does not apply to a third-party bill paying service
with which the customer contracts solely for the customer's
convenience of paying routine bills, in an arrangement in which the
customer retains full control over all funds deposited. The types of
payments made by a bill paying service are exempt from this chapter
as long as the company's actions are not an attempt, as determined by
the director, to circumvent limitations under this chapter.
As added by P.L.35-2010, SEC.118. Amended by P.L.216-2013,
SEC.19.
IC 28-1-29-1
Definitions
Sec. 1. The following words, when used in this chapter, shall have
the meaning ascribed to them unless the context clearly requires a
different meaning:
(1) "Person" includes individuals, sole proprietorships,
partnerships, limited liability companies, trusts, joint ventures,
corporations, unincorporated organizations, other entities, and
their affiliates, however organized.
(2) "Debt management company" is any person doing business
as a budget counseling, credit counseling, debt management, or
debt pooling service or holding the person out, by words of
similar import, as providing services to debtors in the
management of their debts, and having a written agreement with
the debtor to disburse money or anything of value. The term
includes the following:
(A) A person that simply holds any money, funds, check,
personal check, money order, personal money order, draft,
or any other instrument for the transmission of money.
(B) A person or an entity known as a "budget service
company".
The term does not include a person that provides debt
settlement services (as defined in IC 24-5-15-2.5).
(3) "License" means a license issued under the provisions of
this chapter.
(4) "Licensee" means any person to whom a license has been
issued pursuant to the provisions of this chapter.
(5) "Contract debtor" means a debtor who has entered into a
written agreement with a licensee.
(6) "Debt" means an obligation arising out of personal, family,
or household use.
(7) "Debtor" means an individual whose principal debts and
obligations arise out of personal, family, or household use and
not out of business purpose transactions.
(8) "Department" means the members of the department of
financial institutions.
(9) "Indiana contract debtor" means a contract debtor whose
principal residence is located in Indiana.
(10) "Affiliate" means a person that, directly or indirectly,
through one (1) or more intermediaries:
(A) controls;
(B) is controlled by; or
(C) is under common control with;
a person subject to this chapter.
(11) "Fee" means the total amount of money charged to a
contract debtor by a debt management company for the
administration of a debt management plan.
(12) "Plan" means a written debt repayment program in which
a debt management company furnishes debt management
services to a contract debtor and that includes a schedule of
payments to be made by or on behalf of the contract debtor and
used to pay debts owed by the contract debtor.
(13) "Principal amount of the debt" means the total amount of
a debt at the time the contract debtor enters into an agreement.
(14) "Agreement" means an agreement between a debt
management company and a debtor for the performance of debt
management services.
(15) "Trust account" means an account held by a licensee that
is:
(A) established in a bank insured by the Federal Deposit
Insurance Corporation;
(B) separate from other accounts held by the licensee;
(C) except as otherwise permitted under section 9(a) of this
chapter, maintained specifically for the benefit of the
licensee's Indiana contract debtors;
(D) designated as a trust account indicating that the money
in the trust account is not the money of the licensee; and
(E) used to hold money of one (1) or more Indiana contract
debtors for disbursement to creditors of the Indiana contract
debtors.
(16) "Month" means a calendar month.
(17) "Day" means a calendar day.
(18) "Concessions" means assent to repayment of a debt on
terms more favorable to a contract debtor than the terms of the
contract between that debtor and a creditor.
(19) "Good faith" means honesty in fact and the observance of
reasonable standards of fair dealing.
(20) "Control of a related interest" refers to a situation in which
a person, directly or indirectly, or through or in concert with
one (1) or more other persons, possesses any of the following:
(A) The ownership of, control of, or power to vote at least
twenty-five percent (25%) of the voting securities of a
related interest.
(B) The control in any manner of the election of a majority
of the directors of a related interest.
(C) The power to exercise a controlling influence over the
management or policies of a related interest. For purposes of
this clause, a person is presumed to have control, including
the power to exercise a controlling influence over the
management or policies of the related interest, if the person:
(i) is an executive officer or a director of the related
interest and directly or indirectly owns, controls, or has the
power to vote more than ten percent (10%) of any class of
voting securities of the related interest; or
(ii) directly or indirectly owns, controls, or has the power
to vote more than ten percent (10%) of any class of voting
securities of the related interest and no other person owns,
controls, or has the power to vote a greater percentage of
that class of voting securities.
(21) "Lead generator" means a person that, in the regular course
of business:
(A) supplies a debt management company with the name of
a potential contract debtor;
(B) directs an individual to contact or communicate with a
debt management company; or
(C) otherwise refers a debtor to a debt management
company.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.14-1992, SEC.107; P.L.42-1993, SEC.46;
P.L.196-1996, SEC.1; P.L.90-2008, SEC.27; P.L.35-2010, SEC.119;
P.L.89-2011, SEC.36; P.L.216-2013, SEC.20.
IC 28-1-29-2
Administration of chapter
Sec. 2. The department shall adopt such rules and regulations as
it deems advisable for the administration of this chapter, and to
provide such forms and procedures as it determines to be necessary
to carry out the provisions of such chapter.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.42-1993, SEC.47.
IC 28-1-29-3
License required; persons operating in Indiana; evidence of
compliance; fees; violations; renewal; tax warrant list
Sec. 3. (a) No person shall operate a debt management company
in Indiana without having obtained a license from the department.
For purposes of this section, a person is operating in Indiana if:
(1) the person or any of the person's employees or agents are
located in Indiana; or
(2) the person:
(A) contracts with debtors who are residents of Indiana; or
(B) solicits business from residents of Indiana by
advertisements or other communications sent or delivered
through any of the following means:
(i) Mail.
(ii) Personal delivery.
(iii) Telephone.
(iv) Radio.
(v) Television.
(vi) The Internet or other electronic communications.
(vii) Any other means of communication.
(b) The director may request evidence of compliance with this
section at:
(1) the time of application;
(2) the time of renewal of a license; or
(3) any other time considered necessary by the director.
(c) For purposes of subsection (b), evidence of compliance with
this section may include:
(1) criminal background checks, including a national criminal
history background check (as defined in IC 10-13-3-12) by the
Federal Bureau of Investigation for any individual described in
section 5(b)(2), 5(b)(3), or 5(b)(4) of this chapter;
(2) credit histories; and
(3) other background checks considered necessary by the
director.
If the director requests a national criminal history background check
under subdivision (1) for an individual described in that subdivision,
the director shall require the individual to submit fingerprints to the
department or to the state police department, as appropriate, at the
time evidence of compliance is requested under subsection (b). The
individual to whom the request is made shall pay any fees or costs
associated with the fingerprints and the national criminal history
background check. The national criminal history background check
may be used by the director to determine the individual's compliance
with this section. The director or the department may not release the
results of the national criminal history background check to any
private entity.
(d) The fee for a license or renewal of a license shall be fixed by
the department under IC 28-11-3-5 and shall be nonrefundable. The
department may impose a fee under IC 28-11-3-5 for each day that
a renewal fee and any related documents that are required to be
submitted with a renewal application are delinquent.
(e) If a person knowingly acts as a debt management company in
violation of this chapter, any agreement the person has made under
this chapter is void and the debtor under the agreement is not
obligated to pay any fees. If the debtor has paid any amounts to the
person, the debtor, or the department on behalf of the debtor, may
recover the payment from the person that violated this section.
(f) A license issued under this section, except in a transaction
approved under section 3.1 of this chapter, is not assignable or
transferable. In order to remain in force, a license issued under this
section must be renewed every year in the manner prescribed by the
director of the department. The director of the department shall
prescribe the form of the renewal application. In order to be accepted
for processing, a renewal application must be accompanied by the
following:
(1) The license renewal fee imposed under subsection (d).
(2) The licensee's most recent audited financial statements
covering the licensee's immediately preceding fiscal year, as
prepared by an independent certified public accountant in
compliance with the requirements set forth in section 5(d) of
this chapter. If the licensee's financial statements for the
immediately preceding fiscal year are not available at the time
of renewal, the licensee has one hundred twenty (120) days
after the end of the immediately preceding fiscal year to file the
financial statements.
(3) All other information and documents requested by the
director of the department.
(g) If the department of state revenue notifies the department that
a person is on the most recent tax warrant list, the department shall
not issue or renew the person's license until:
(1) the person provides to the department a statement from the
department of state revenue that the person's tax warrant has
been satisfied; or
(2) the department receives a notice from the commissioner of
the department of state revenue under IC 6-8.1-8-2(k).
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.42-1993, SEC.48; P.L.172-1997, SEC.18;
P.L.63-2001, SEC.12 and P.L.134-2001, SEC.13; P.L.10-2006,
SEC.33 and P.L.57-2006, SEC.33; P.L.213-2007, SEC.44;
P.L.217-2007, SEC.42; P.L.90-2008, SEC.28; P.L.35-2010,
SEC.120; P.L.89-2011, SEC.37; P.L.172-2011, SEC.132;
P.L.216-2013, SEC.21.
IC 28-1-29-3.1
Change in control of licensee; application to department;
timeframe for department's decision; conditions for approval; duty
of licensee to report transfer of securities; director's discretion to
require new license
Sec. 3.1. (a) As used in this section, "control" means possession
of the power directly or indirectly to:
(1) direct or cause the direction of the management or policies
of a licensee, whether through the beneficial ownership of
voting securities, by contract, or otherwise; or
(2) vote at least twenty-five percent (25%) of the voting
securities of a licensee, whether the voting rights are derived
through the beneficial ownership of voting securities, by
contract, or otherwise.
(b) An organization or an individual acting directly, indirectly, or
through or in concert with one (1) or more other organizations or
individuals may not acquire control of any licensee unless the
department has received and approved an application for change in
control. The department has not more than one hundred twenty (120)
days after receipt of an application to issue a notice approving the
proposed change in control. The application must contain the name
and address of the organization, individual, or individuals who
propose to acquire control and any other information required by the
director.
(c) The period for approval under subsection (b) may be extended:
(1) in the discretion of the director for an additional thirty (30)
days; and
(2) not more than two (2) additional times for not more than
forty-five (45) days each time if:
(A) the director determines that the organization, individual,
or individuals who propose to acquire control have not
submitted substantial evidence of the qualifications
described in subsection (d);
(B) the director determines that any material information
submitted is substantially inaccurate; or
(C) the director has been unable to complete the
investigation of the organization, individual, or individuals
who propose to acquire control because of any delay caused
by or the inadequate cooperation of the organization,
individual, or individuals.
(d) The department shall issue a notice approving the application
only after it is satisfied that both of the following apply:
(1) The organization, individual, or individuals who propose to
acquire control are qualified by competence, experience,
character, and financial responsibility to control and operate the
licensee in a legal and proper manner.
(2) The interests of the owners and creditors of the licensee and
the interests of the public generally will not be jeopardized by
the proposed change in control.
(e) The director may determine, in the director's discretion, that
subsection (b) does not apply to a transaction if the director
determines that the direct or beneficial ownership of the licensee will
not change as a result of the transaction.
(f) The president or other chief executive officer of a licensee
shall report to the director any transfer or sale of securities of the
licensee that results in direct or indirect ownership by a holder or an
affiliated group of holders of at least ten percent (10%) of the
outstanding securities of the licensee. The report required by this
subsection must be made not later than ten (10) days after the
transfer of the securities on the books of the licensee.
(g) Depending on the circumstances of the transaction, the
director may reserve the right to require the organization, individual,
or individuals who propose to acquire control of a licensee to apply
for a new license under section 3 of this chapter, instead of acquiring
control of the licensee under this section.
As added by P.L.89-2011, SEC.38. Amended by P.L.6-2012,
SEC.193.
IC 28-1-29-4
Suspension or revocation of license; order to show cause; order of
suspension or revocation; relinquishment of license; existing
contracts; emergency order for revocation
Sec. 4. (a) The department may issue to a licensee an order to
show cause why the licensee's license should not be revoked or
suspended for a period determined by the department.
(b) An order issued under subsection (a) must:
(1) include:
(A) a statement of the place, date, and time for a meeting
with the department, which date may not be less than ten
(10) days from the date of the order;
(B) a description of the action contemplated by the
department; and
(C) a statement of the facts or conduct supporting the
issuance of the order; and
(2) be accompanied by a notice stating that the licensee is
entitled to:
(A) a reasonable opportunity to be heard; and
(B) show the licensee's compliance with all lawful
requirements for retention of the license;
at the meeting described in subdivision (1)(A).
(c) After the meeting described in subsection (b)(1)(A), the
department may revoke or suspend the license if the department finds
that:
(1) the licensee has repeatedly and willfully violated:
(A) this chapter or any rule, order, or guidance document
adopted or issued by the department; or
(B) any other state or federal law, regulation, or rule
applicable to debt management companies;
(2) the licensee does not meet the licensing qualifications set
forth in section 5 of this chapter;
(3) the licensee obtained the license for the benefit of, or on
behalf of, a person who does not qualify for the license;
(4) the licensee knowingly or intentionally made material
misrepresentations to, or concealed material information from,
the department; or
(5) facts or conditions exist that, had they existed at the time the
licensee applied for the license, would have been grounds for
the department to deny the issuance of the license.
(d) Whenever the department revokes or suspends a license, the
department shall enter an order to that effect and notify the licensee
of:
(1) the revocation or suspension;
(2) if a suspension has been ordered, the duration of the
suspension;
(3) the procedure for appealing the revocation or suspension
under IC 4-21.5-3-5; and
(4) any other terms and conditions that apply to the revocation
or suspension.
Not later than five (5) days after the entry of the order, the
department shall deliver to the licensee a copy of the order and the
findings supporting the order.
(e) Any person holding a license to operate a debt management
company may relinquish the license by notifying the department in
writing of the relinquishment. However, a relinquishment under this
subsection does not affect the person's liability for acts previously
committed and coming within the scope of this chapter.
(f) If the director determines it to be in the public interest, the
director may pursue revocation of a license of a licensee that has
relinquished the license under subsection (e).
(g) If a person's license is revoked, suspended, or relinquished, the
revocation, suspension, or relinquishment does not impair or affect
any obligation owed by any person under any existing agreement or
contract.
(h) If the director of the department has just cause to believe an
emergency exists from which it is necessary to protect the interests
of the public, the director may proceed with the revocation of a
license through an emergency or another temporary order under
IC 4-21.5-4.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.42-1993, SEC.49; P.L.176-1996, SEC.15;
P.L.196-1996, SEC.2; P.L.80-1998, SEC.10; P.L.213-2007, SEC.45;
P.L.217-2007, SEC.43; P.L.35-2010, SEC.121; P.L.27-2012,
SEC.71.
IC 28-1-29-4.1
Failure to file renewal application or pay renewal fee; revocation
or suspension of license
Sec. 4.1. (a) A license issued by the department under this chapter
shall be revoked or suspended by the department if the licensee fails
to:
(1) file any renewal application prescribed by the director; or
(2) pay any license renewal fee described under section 3 of this
chapter;
within sixty (60) days after the date the renewal is due.
(b) A person whose license is revoked or suspended under this
section may:
(1) pay all delinquent fees and apply for reinstatement of the
license; or
(2) appeal the revocation or suspension to the department for an
administrative review under IC 4-21.5-3.
Pending the decision resulting from a hearing under IC 4-21.5-3
concerning a license revocation or suspension, the license remains in
force.
As added by P.L.176-1996, SEC.16. Amended by P.L.35-2010,
SEC.122; P.L.89-2011, SEC.39.
IC 28-1-29-4.5
Collection agencies or process servers; licenses; restriction
Sec. 4.5. After August 31, 1981, the department may not issue a
license to any person who is an employee of, owner of, or affiliated
in any way with a collection agency or a process serving business.
Any person who was granted a license before September 1, 1981, is
not affected by the restriction imposed in this section.
As added by Acts 1981, P.L.256, SEC.1. Amended by P.L.42-1993,
SEC.50.
IC 28-1-29-4.6
Repealed
(Repealed by P.L.196-1996, SEC.5.)
IC 28-1-29-5
License application; findings by the department; felonies; financial
statements; denial; hearing
Sec. 5. (a) Every person doing business as a debt management
company shall make application to the department for a license to
engage in such business. Such application shall be in the form
prescribed by the director and shall contain such information as the
director may require.
(b) The department may not issue a license unless the department
finds that the financial responsibility, character, and fitness of:
(1) the applicant and any significant affiliate of the applicant;
(2) each executive officer, director, or manager of the applicant,
or any other individual having a similar status or performing a
similar function for the applicant;
(3) if known, each person directly or indirectly owning of
record or owning beneficially at least ten percent (10%) of the
outstanding shares of any class of equity security of the
applicant; and
(4) each of the applicant's:
(A) employees; or
(B) agents;
authorized to initiate transactions involving the trust account
required under section 9 of this chapter;
warrant belief that the business will be operated honestly and fairly
under this chapter. The department is entitled to request evidence of
an applicant's financial responsibility, character, and fitness.
(c) An application submitted under this section must indicate
whether any individuals described in subsection (b)(2), (b)(3), or
(b)(4):
(1) are, at the time of the application, under indictment for a
felony under Indiana law or the laws of any other jurisdiction;
or
(2) have been convicted of a felony under Indiana law or the
laws of any other jurisdiction.
(d) Unless waived upon written request to and approval by the
director, an application submitted to the department under this
section must include copies of the applicant's audited financial
statements for the applicant's most recently concluded fiscal year
and, if available, for the applicant's two (2) fiscal years immediately
preceding the applicant's most recently concluded fiscal year,
including a:
(1) balance sheet;
(2) statement of income or loss;
(3) statement of changes in shareholder equity; and
(4) statement of changes in financial position.
A financial statement required to be submitted under this subsection
must be prepared by an independent certified public accountant
authorized to do business in the United States in accordance with
AICPA Statements on Standards for Accounting and Review
Services (SSARS).
(e) The department may deny an application under this section if
the director of the department determines that the application was
submitted for the benefit of, or on behalf of, a person who does not
qualify for a license.
(f) Upon written request, an applicant is entitled to a hearing
under IC 4-21.5 on the question of the qualifications of the applicant
for a license.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.42-1993, SEC.52; P.L.80-1998, SEC.11;
P.L.10-2006, SEC.34 and P.L.57-2006, SEC.34; P.L.213-2007,
SEC.46; P.L.217-2007, SEC.44; P.L.90-2008, SEC.29; P.L.35-2010,
SEC.123; P.L.216-2013, SEC.22.
IC 28-1-29-6 Version a
Bond
Note: This version of section effective until 7-1-2014. See also
following version of this section, effective 7-1-2014.
Sec. 6. Each application for a license shall be accompanied by
proof that the applicant has executed a bond, payable to the
department, in an amount determined by the director and in
accordance with the standards adopted by the director. Said bond
shall also indemnify any person damaged by failure on the part of the
licensee to conduct the business in accordance with the provisions of
this chapter.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by Acts 1981, P.L.256, SEC.3; P.L.42-1993, SEC.53;
P.L.35-2010, SEC.124.
IC 28-1-29-6 Version b
Surety bond; requirements; amount; renewal; termination;
liability; notices
Note: This version of section effective 7-1-2014. See also
preceding version of this section, effective until 7-1-2014.
Sec. 6. (a) Each application for a license must be accompanied by
proof that the applicant has executed a surety bond in accordance
with this section.
(b) A surety bond issued under this section must:
(1) be in a form prescribed by the director;
(2) be in effect during the term of the license issued under this
chapter;
(3) remain in effect during the two (2) years after the licensee
ceases offering debt management services to individuals in
Indiana;
(4) be payable to the department for the benefit of:
(A) the state; and
(B) individuals who reside in Indiana when they agree to
receive debt management services from the licensee;
(5) be in an amount equal to:
(A) fifty thousand dollars ($50,000), in the case of an initial
surety bond issued under this section; or
(B) the amount prescribed under subsection (d), beginning
with the first renewal of a license under this chapter;
(6) be issued by a bonding, surety, or insurance company
authorized to do business in Indiana and rated at least "A-" by
at least one (1) nationally recognized investment rating service;
and
(7) have payment conditioned upon the licensee's or any of the
licensee's employees' or agents' noncompliance with or violation
of this chapter or other applicable federal or state laws or
regulations.
(c) The director may adopt rules or guidance documents with
respect to the requirements for a surety bond as necessary to
accomplish the purposes of this chapter.
(d) Beginning with the first renewal of a license under this
chapter, each year that a licensee continues to offer debt management
services to individuals in Indiana, the licensee shall file a new or an
additional surety bond in an amount that ensures that the licensee's
surety bond under this section is equal to the greater of the following:
(1) fifty thousand dollars ($50,000); or
(2) the average of the highest daily balance of funds held in
trust for Indiana residents for each month during the licensee's
most recently concluded fiscal year, not to exceed one hundred
thousand dollars ($100,000).
(e) If the principal amount of a surety bond required under this
section is reduced by payment of a claim or judgment, the licensee
for whom the bond is issued shall immediately notify the director of
the reduction and, not later than thirty (30) days after notice by the
director, file a new or an additional surety bond in an amount set by
the director. The amount of the new or additional bond set by the
director must be at least the amount of the bond before payment of
the claim or judgment.
(f) If for any reason a surety terminates a bond issued under this
section, the licensee shall immediately notify the department and file
a new surety bond in an amount as prescribed in subsection (b)(5).
(g) Cancellation of a surety bond issued under this section does
not affect any liability incurred or accrued during the period when
the surety bond was in effect.
(h) The director may obtain satisfaction from a surety bond issued
under this section if the director incurs expenses, issues a final order,
or recovers a final judgment under this chapter.
(i) Notices required under this section must be in writing and
delivered by certified mail, return receipt requested and postage
prepaid, or by overnight delivery using a nationally recognized
carrier.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by Acts 1981, P.L.256, SEC.3; P.L.42-1993, SEC.53;
P.L.35-2010, SEC.124; P.L.216-2013, SEC.23.
IC 28-1-29-7
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 28-1-29-7.5
Felonies; civil actions; enforcement actions; notice to department
Sec. 7.5. (a) This section applies if, after a person has been issued
a license or renewal license under this chapter, any individuals
described in section 5(b)(2), 5(b)(3), or 5(b)(4) of this chapter have
been convicted of a felony under Indiana law or the laws of any other
jurisdiction.
(b) If this section applies, the licensee shall provide to the
department the information required under section 5(c) of this
chapter:
(1) not later than thirty (30) days after any person described in
subsection (a) has been convicted of the felony; or
(2) if the licensee's next license renewal fee under section 3(d)
of this chapter is due before the date described in subdivision
(1), along with the licensee's next license renewal fee under
section 3(d) of this chapter.
(c) Not later than thirty (30) days after a licensee has been served
with notice of a civil action that is for the violation of this chapter by
the licensee (or by an employee or agent of the licensee) and that is
brought by or on behalf of a debtor who resides or resided in Indiana
on:
(1) the date an agreement that is the subject of the civil action
was entered into; or
(2) the date the civil action is filed;
the licensee shall provide written notice of the civil action to the
department.
(d) Not later than thirty (30) days after a licensee receives notice
of any enforcement action initiated against the licensee (or an
employee or agent of the licensee) by a federal or state regulatory or
law enforcement agency, the licensee shall notify the director in
writing of the notice received.
As added by P.L.213-2007, SEC.47; P.L.217-2007, SEC.45.
Amended by P.L.90-2008, SEC.30; P.L.35-2010, SEC.125;
P.L.42-2011, SEC.62; P.L.216-2013, SEC.24.
IC 28-1-29-7.7
Budget analysis and plan; written statement to debtor; creditor's
reduction of amount owed; disclosure of tax implications
Sec. 7.7. (a) A licensee may not furnish debt management services
to a debtor unless:
(1) the licensee has prepared a budget analysis; and
(2) if the debtor is to make regular, periodic payments, the
licensee:
(A) has prepared a plan for the debtor;
(B) has made a determination, based on the licensee's
analysis of the information provided by the debtor and
otherwise available to the licensee, that the plan is suitable
for the debtor and the debtor will be able to meet the
payment obligations under the plan; and
(C) believes that each creditor of the debtor listed as a
participating creditor in the plan will accept payment of the
debtor's debts as provided in the plan.
(b) Before a debtor enters into an agreement with a licensee to
engage in a plan, the licensee shall:
(1) provide the debtor with a copy of the budget analysis and
plan required by subsection (a) in a form that identifies the
licensee and that the debtor may keep whether or not the debtor
enters into the agreement;
(2) inform the debtor of the availability, at the debtor's option,
of assistance provided through a toll free communication
system or in person, where reasonably available to residents in
Indiana, regarding the budget analysis and plan required by
subsection (a); and
(3) with respect to all creditors identified by the debtor or
otherwise known by the licensee to be creditors of the debtor,
provide the debtor with a list of:
(A) creditors that the licensee expects to participate in the
plan and grant concessions;
(B) creditors that the licensee expects to participate in the
plan but not grant concessions; and
(C) creditors that the licensee expects not to participate in
the plan.
(c) Before a debtor enters into an agreement with a licensee, the
licensee shall, in a written form that is provided to the debtor
separately, that contains no other information, and that the debtor
may keep whether or not the debtor enters into the agreement,
provide the following information to the debtor in clear and
conspicuous type, surrounded by black lines:
"IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) Debt management plans are not right for all individuals, and
you may ask us to provide information about other ways,
including bankruptcy, to deal with your debts.
(2) We may receive compensation for our services from your
creditors.
_________________________________________
(Name and business address of licensee)".
(d) If during the term of a debt management agreement a creditor
that is a participating creditor in the plan agrees to reduce the amount
owed by the debtor, the licensee must, not later than fourteen (14)
days after the date the creditor agrees to the reduction, provide the
following disclosure in clear and conspicuous type, surrounded by
black lines:
"IMPORTANT INFORMATION FOR YOU TO CONSIDER
(1) (Description of the terms of the reduction).
(2) Reduction of debt as described in item (1) above may result
in taxable income to you, even though you will not actually
receive any money.".
As added by P.L.35-2010, SEC.126. Amended by P.L.89-2011,
SEC.40; P.L.27-2012, SEC.72; P.L.216-2013, SEC.25.
IC 28-1-29-8
Agreement between licensee and debtor; contents; delivery; notice
to creditors; payments; cancellation; budget analysis; term of
agreement; other business operations; other products and services;
toll free communication system; good faith required
Sec. 8. (a) An agreement between a licensee and a debtor must:
(1) be in a written form;
(2) be dated and signed by the licensee and the debtor;
(3) include the name of the debtor and the address where the
debtor resides;
(4) include the name, business address, and telephone number
of the licensee;
(5) be delivered to the debtor immediately upon formation of
the agreement; and
(6) disclose the following:
(A) The services to be provided.
(B) The amount or method of determining the amount of all
fees, individually itemized, to be paid by the debtor.
(C) The schedule of payments to be made by or on behalf of
the debtor, including the amount of each payment, the date
on which each payment is due, and an estimate of the date of
the final payment.
(D) If a plan provides for regular periodic payments to
creditors:
(i) each creditor of the debtor to which payment will be
made, the amount owed to each creditor, and any
concessions the licensee reasonably believes each creditor
will offer; and
(ii) the schedule of expected payments to each creditor,
including the amount of each payment and the date on
which the payment will be made.
(E) Each creditor that the licensee believes will not
participate in the plan and to which the licensee will not
direct payment.
(F) The manner in which the licensee will comply with the
licensee's obligations under section 9(k) of this chapter.
(G) A statement that:
(i) the licensee may terminate the agreement for good
cause, upon return of unexpended money of the debtor;
and
(ii) the debtor may contact the department with any
questions or complaints regarding the licensee.
(H) The address, telephone number, and Internet address or
web site of the department.
(b) For purposes of subsection (a)(5), delivery of an electronic
record occurs when:
(1) the record is made available in a format in which the debtor
may retrieve, save, and print the record; and
(2) the debtor is notified that the record is available.
(c) An agreement must provide that:
(1) the debtor has a right to terminate the agreement at any time
without penalty, notwithstanding the close-out fee as permitted
by section 8.3(d) of this chapter, or obligation, by giving the
licensee written or electronic notice, in which event:
(A) the licensee shall refund all unexpended money that the
licensee or the licensee's agent has received from or on
behalf of the debtor for the reduction or satisfaction of the
debtor's debt; and
(B) all powers of attorney granted by the debtor to the
licensee are revoked and ineffective;
(2) the debtor authorizes any bank insured by the Federal
Deposit Insurance Corporation in which the licensee or the
licensee's agent has established a trust account to disclose to the
department any financial records relating to the trust account;
(3) the licensee shall notify the debtor within five (5) days after
learning of a creditor's final decision to reject or withdraw from
a plan under the agreement; and
(4) the notice under subdivision (3) must include:
(A) the identity of the creditor; and
(B) a statement that the debtor has the right to modify or
terminate the agreement.
(d) All creditors included in the plan must be notified of the
debtor's and licensee's relationship.
(e) A licensee shall give to the contract debtor a dated receipt for
each payment, at the time of the payment, unless the payment is
made by check, money order, or automated clearinghouse withdrawal
as authorized by the contract debtor.
(f) A licensee shall, upon cancellation by a contract debtor of the
agreement, notify immediately in writing all creditors in the debt
management plan of the cancellation by the contract debtor.
(g) A licensee may not enter into an agreement with a debtor
unless a thorough, written budget analysis of the debtor indicates that
the debtor can reasonably meet the payments required under a
proposed plan. The following must be included in the budget
analysis:
(1) Documentation and verification of all income considered.
All income verification must be dated not more than sixty (60)
days before the completion of the budget analysis.
(2) Monthly living expense figures, which must be reasonable
for the particular family size and part of Indiana. If expenditure
reductions are part of the planned budget for the debtor, details
of the expected savings must be documented in the debtor's file
and set forth in the budget provided to the debtor.
(3) Documentation and verification, by a current credit bureau
report, current debtor account statements, or direct
documentation from the creditor, of monthly debt payments and
balances to be paid outside the plan.
(4) Documentation and verification, by a current credit bureau
report, current debtor account statements, or direct
documentation from the creditor, of the monthly debt payments
and current balances to be paid through the plan.
(5) The date of the budget analysis and the signature of the
debtor.
(h) A licensee may not enter into an agreement with a contract
debtor for a period longer than sixty (60) months.
(i) A licensee may provide services under this chapter in the same
place of business in which another business is operating, or from
which other products or services are sold, if the director issues a
written determination that:
(1) the operation of the other business; or
(2) the sale of other products and services;
from the location in question is not contrary to the best interests of
the licensee's contract debtors.
(j) A licensee without a physical location in Indiana may:
(1) solicit sales of; and
(2) sell;
additional products and services to Indiana residents if the director
issues a written determination that the proposed solicitation or sale
is not contrary to the best interests of contract debtors.
(k) A licensee shall maintain a toll free communication system,
staffed at a level that reasonably permits a contract debtor to speak
to a counselor, debt specialist, or customer service representative, as
appropriate, during ordinary business hours.
(l) A debt management company shall act in good faith in all
matters under this chapter.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by Acts 1981, P.L.256, SEC.4; P.L.42-1993, SEC.54;
P.L.196-1996, SEC.3; P.L.63-2001, SEC.13 and P.L.134-2001,
SEC.14; P.L.213-2007, SEC.48; P.L.217-2007, SEC.46; P.L.3-2008,
SEC.220; P.L.90-2008, SEC.31; P.L.1-2009, SEC.148; P.L.35-2010,
SEC.127; P.L.89-2011,
P.L.216-2013, SEC.26.
SEC.41;
P.L.27-2012,
SEC.73;
IC 28-1-29-8.3
Fees and charges; plan, written agreement, and payment to
creditor required; set up fee; monthly service fee; close-out fee;
department approval for additional charges; fees not considered
debt
Sec. 8.3. (a) Except as otherwise permitted by this section, a
licensee may not:
(1) impose, directly or indirectly, a fee or other charge on a
debtor; or
(2) receive money from or on behalf of a debtor for debt
management services.
(b) A licensee may not impose charges or receive payment for
debt management services until:
(1) the licensee and the debtor have agreed upon a plan and
have signed an agreement that complies with sections 8 and 9.5
of this chapter; and
(2) at least one (1) payment has been made to a creditor under
the plan.
All creditors must be notified of the debtor's and licensee's
relationship.
(c) If a debtor assents to a plan, the licensee may charge the
following:
(1) A set up fee of not more than fifty dollars ($50) for
consultation, obtaining a credit report, and setting up an
account. Acceptance of a plan payment by a creditor constitutes
agreement by the creditor to the plan. A set up fee under this
subdivision may not be collected until the debtor, or the
licensee on behalf of the debtor, has made at least one (1)
payment to a creditor under the plan.
(2) Subject to subsection (d), a monthly service fee of the lesser
of the following:
(A) Not more than fifteen percent (15%) of the amount the
licensee receives from the contract debtor for payment to the
contract debtor's creditors for the applicable month.
However, if the amount calculated under this clause is less
than five dollars ($5) for a particular month, the licensee
may charge a monthly service fee of five dollars ($5) for that
month.
(B) Seventy-five dollars ($75).
The monthly service fee under this subdivision may be charged
for any one (1) month or part of a month. The amount of a set
up fee under subdivision (1) may not be included in the
calculation of the monthly service fee.
(d) Upon cancellation by a contract debtor or termination of
payments by a contract debtor, a licensee may withhold for the
licensee's own benefit not more than one hundred dollars ($100),
which may be accrued as a close-out fee.
(e) A licensee may not charge a contract debtor more than one (1)
set up fee or one (1) close-out fee unless the contract debtor leaves
the services of the licensee for more than six (6) months.
(f) With respect to any additional charge not specifically provided
for in this section, the licensee must submit a written explanation of
the charge to the department indicating how the charge would be
assessed and the value or benefit conferred on the contract debtor in
connection with the charge. Supporting documents may be required
by the department. The department shall determine whether the
charge:
(1) would be imposed in relation to some benefit conferred on
the consumer; and
(2) is reasonable in relation to the benefit conferred.
An additional charge is not permitted unless approved by the
department.
(g) For purposes of this chapter, the terms of an agreement
commence on the date on which the agreement is made.
(h) A licensee may assess a charge of not more than twenty-five
dollars ($25) for each return by a bank or other depository institution
of a dishonored check, negotiable order of withdrawal, or share draft
issued by the contract debtor.
(i) Any fee charged by the licensee to the debtor under this section
for services rendered by the licensee, other than the fees described
under subsection (e), is not considered a debt owed by the debtor to
the licensee.
As added by P.L.35-2010, SEC.128. Amended by P.L.89-2011,
SEC.42; P.L.6-2012, SEC.194; P.L.27-2012, SEC.74; P.L.216-2013,
SEC.27.
IC 28-1-29-8.6
Repealed
(Repealed by P.L.216-2013, SEC.28.)
IC 28-1-29-8.8
Debtor's failure to make payment; cancellation of agreement;
letter of continuation; return of money to contract debtor
Sec. 8.8. (a) If a contract debtor fails to make a payment to a
licensee within ninety (90) days after the date a payment is due under
an agreement, the agreement may be considered canceled by the
licensee unless:
(1) one (1) or more creditors included in the contract debtor's
plan object to the termination; or
(2) subject to subsection (b), the contract debtor files a letter of
continuation.
(b) A contract debtor may file a letter of continuation of an
agreement even if the contract debtor did not make a payment within
ninety (90) days after a payment was due. All of the following apply
to a letter of continuation of an agreement:
(1) A contract debtor may file only one (1) letter of continuation
with a licensee for each twelve (12) month period the agreement
is in effect.
(2) A letter of continuation must contain a detailed explanation
of the reason or reasons for the missed payment.
(3) If an agreement for which a letter of continuation that meets
the requirements of this subsection is filed, the agreement
remains in effect and subject to cancellation for any future
failure to make a payment as described in this section.
(4) A contract debtor may not file a letter of continuation with
a licensee during the first six (6) months an agreement is in
effect.
(5) If one (1) or more creditors included in the contract debtor's
plan agree to continue the plan based on the explanation
provided under subdivision (2), the contract debtor and the
licensee shall modify the agreement then in effect between the
contract debtor and the licensee to reflect the changes agreed to
under the letter of continuation.
(c) If a licensee or a contract debtor terminates an agreement, the
licensee shall immediately return to the contract debtor any money
of the contract debtor held in trust for the benefit of the contract
debtor.
As added by P.L.35-2010, SEC.130. Amended by P.L.216-2013,
SEC.29.
IC 28-1-29-9
Trust account; separate account for Indiana contract debtors
required; commingling with funds of nonresidents with approval
of director; requirements and restrictions; required balance;
reconciliation procedures; embezzlement; relocating account;
signatories; monthly accountings; completion or termination of
contract
Sec. 9. (a) All money paid to a licensee by or on behalf of an
Indiana contract debtor for distribution to creditors under a plan shall
be held in trust in a separate account maintained specifically for the
benefit of the licensee's Indiana contract debtors. However, as an
alternative to maintaining a separate trust account specifically for the
benefit of the licensee's Indiana contract debtors, a licensee may
submit a request to the director for approval to maintain a trust
account that holds both money paid to the licensee by or on behalf of
Indiana contract debtors and money paid to the licensee by or on
behalf of contract debtors who do not reside in Indiana. The request
must include documentation of the licensee's account reconciliation
procedures sufficient to demonstrate to the director that the licensee
will be able to:
(1) comply with the reconciliation requirements set forth in
subsection (e) with respect to each Indiana contract debtor
whose money is held in the account; and
(2) accurately determine the appropriate surety bond level under
section 6(d) of this chapter at the time of each renewal of the
licensee's license under this chapter.
Upon approval by the director of a request described in this
subsection, the licensee shall maintain the documentation described
in subdivisions (1) and (2) for review by department examiners
during the course of the department's routine examinations under this
chapter. Before the close of the same banking day that funds are
received from an Indiana contract debtor, the licensee shall deposit
the money in the trust account required under this section.
(b) A licensee shall do the following:
(1) Maintain separate records of account for each contract
debtor to whom the licensee is furnishing debt management
services in Indiana.
(2) Disburse money paid by or on behalf of a contract debtor to
creditors of the contract debtor as disclosed in the agreement
between the licensee and the contract debtor.
(3) Make remittances not later than thirty (30) days after initial
receipt of funds from a contract debtor. After the initial receipt
of funds, remittances, less fees and costs, shall be made not
later than thirty (30) days after receipt of funds, unless the
reasonable payment of one (1) or more of the contract debtor's
obligations requires that the funds be held for a longer period to
accumulate a sum certain. For purposes of this section, the
close-out fee set forth in section 8.3(d) of this chapter is not
considered an obligation of the contract debtor.
(4) Retain for charges in the trust account required under this
section an amount less than or equal to the sum of one (1)
month's fees for the licensee's Indiana contract debtors whose
money is held in the account, as permitted by section 8.3(c)(2)
of this chapter, plus a close-out fee, as permitted by section
8.3(d) of this chapter, for each of the licensee's Indiana contract
debtors whose money is held in the account, unless a greater
amount is approved in writing by the department.
(5) Promptly:
(A) correct any payments on behalf of a contract debtor that
are not made or that are misdirected as a result of an error by
the licensee or other person in control of the trust account;
and
(B) reimburse the contract debtor for any costs or fees
imposed by a creditor as a result of the failure to pay or
misdirection.
(c) A licensee may not commingle the licensee's own funds with
money in the trust account established under this section for the
benefit of the licensee's Indiana contract debtors.
(d) The trust account required under this section must at all times
have a cash balance equal to at least the sum of the balances of each
individual account maintained for each Indiana contract debtor
whose money is held in the trust account.
(e) The licensee shall reconcile the trust account required under
this section at least every thirty (30) days after receipt of the bank
statement. The reconciliation must compare the cash balance in the
trust account for all the licensee's Indiana contract debtors whose
money is held in the account with the sum of the balances in each of
those Indiana contract debtor's individual accounts. If the licensee or
the licensee's designee has more than one (1) trust account under this
section, each trust account must be individually reconciled. If the
cash balance held in a trust account for the benefit of the licensee's
Indiana contract debtors reflects a shortage when compared with the
sum of the balances in each of those Indiana contract debtor's
individual accounts, the licensee shall immediately provide written
notice to the department of that fact and of any remedial action taken
by the licensee. If the cash balance held in a trust account for the
benefit of the licensee's Indiana contract debtors reflects a surplus
when compared with the sum of the balances in each of those Indiana
contract debtor's individual accounts, the licensee shall attempt to
remedy the surplus and shall retain, for review by department
examiners, documentation of the actions taken.
(f) If a licensee or a licensee's employee discovers, or has a
reasonable suspicion of, embezzlement or other unlawful
appropriation of money held in trust, the licensee or the licensee's
employee shall immediately notify the department in writing. Unless
the department by regulation, rule, policy, or guidance provides
otherwise, the licensee shall give notice to the department describing
the remedial action taken or to be taken not later than five (5) days
after the licensee or the licensee's employee discovers, or has a
reasonable suspicion of, the embezzlement or other unlawful
appropriation.
(g) If a contract debtor terminates an agreement or it becomes
reasonably apparent to a licensee that a plan has failed, the licensee
shall, not later than fifteen (15) days after the effective date of the
termination of the agreement or the date on which it becomes
apparent to the licensee that the plan has failed, as applicable, refund
to the contract debtor all money paid by or on behalf of the contract
debtor that has not been paid to creditors less the fee that is payable
to the licensee under section 8.3(d) of this chapter.
(h) Before relocating a trust account from one (1) bank to another,
a licensee shall inform the department of the name, business address,
and telephone number of the new bank. As soon as practicable, the
licensee shall inform the department of the account number of the
trust account at the new bank.
(i) Before adding or replacing any signatory on the trust account
required under this section, the licensee shall:
(1) ensure that the new signatory is qualified based on a
background check consistent with section 3(c) of this chapter;
and
(2) maintain, for review by department examiners,
documentation of the background check conducted.
(j) At least once each month while an agreement between a
licensee and a contract debtor is in effect, the licensee shall render to
the contract debtor an accounting statement that includes the
following:
(1) The following information with respect to the month for
which the accounting statement is prepared:
(A) The total amount received from the contract debtor.
(B) The total amount paid to each creditor on behalf of the
contract debtor.
(C) The amount of any charges deducted by the licensee.
(D) Any amount held in reserve on behalf of the contract
debtor.
(2) A statement that the contract debtor's plan is regulated by
the department, along with the department's contact
information, including the department's address, Internet web
site address, and toll free telephone number.
A licensee shall also provide an accounting statement described in
this subsection to a contract debtor not later than seven (7) days after
written demand by the contract debtor for such a statement.
However, the licensee is not required to provide more than three (3)
such requested accountings per six (6) month period.
(k) Upon the completion or termination of a contract between a
licensee and a contract debtor, the licensee shall provide to the
contract debtor a statement:
(1) indicating that the licensee no longer holds funds in trust for
the contract debtor; and
(2) listing the name and address of:
(A) any creditors paid in full; and
(B) any creditors remaining unpaid.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.196-1996, SEC.4; P.L.213-2007, SEC.49;
P.L.217-2007, SEC.47; P.L.35-2010, SEC.131; P.L.89-2011,
SEC.43; P.L.6-2012, SEC.195; P.L.27-2012, SEC.75; P.L.216-2013,
SEC.30.
IC 28-1-29-9.5
Prohibited acts; unauthorized practice of law; compensation
prohibited
Sec. 9.5. (a) A licensee may not, directly or indirectly, do any of
the following:
(1) Misappropriate or misapply money held in trust.
(2) Exercise or attempt to exercise a power of attorney after a
contract debtor has terminated an agreement.
(3) Initiate a transfer to or from a contract debtor's account at a
bank or with another person unless the transfer is:
(A) a return of money to the contract debtor; or
(B) before the termination of an agreement, properly
authorized by the agreement and this chapter, and for:
(i) payment to one (1) or more creditors under an
agreement; or
(ii) payment of a fee.
(4) Offer a gift or bonus, premium, reward, or other
compensation to a debtor for executing an agreement.
(5) Offer, pay, or give:
(A) a gift or bonus;
(B) a premium;
(C) a reward; or
(D) other compensation;
to a lead generator or another person for referring a prospective
customer if the person making the referral has a financial
interest in the outcome of debt management services provided
to the customer.
(6) Receive a bonus, a commission, or other benefit for
referring a debtor to a person.
(7) Structure a plan in a manner that would result in a negative
amortization of any of a debtor's debts, unless a creditor that is
owed a negatively amortizing debt agrees to refund or waive the
finance charge upon payment of the principal amount of the
debt.
(8) Compensate the licensee's employees on the basis of a
formula that incorporates the number of debtors the employee
induces to enter into agreements. It is not a violation of this
subsection for a licensee to use the number of successfully
completed debt management plans as a criterion for
compensation for the licensee's employees.
(9) Settle a debt or lead a contract debtor to believe that a
payment to a creditor is in settlement of a debt to the creditor
unless, at the time of settlement, the contract debtor receives a
certification by the creditor that the payment is in full
settlement of the debt.
(10) Make a representation that:
(A) the licensee will furnish money to pay bills or prevent
attachments;
(B) payment of a certain amount will permit satisfaction of
a certain amount or range of indebtedness; or
(C) participation in a plan will or may prevent litigation,
garnishment, attachment, repossession, foreclosure, eviction,
or loss of employment.
(11) Misrepresent that the licensee is authorized or competent
to furnish legal advice or perform legal services.
(12) Represent in the licensee's agreements, disclosures
required by this chapter, advertisements, or Internet web site
that the licensee is:
(A) a nonprofit entity unless the licensee is organized and
properly operating as a nonprofit entity under the law of the
state in which the entity was formed; or
(B) a tax exempt entity unless the entity has received
certification of tax exempt status from the Internal Revenue
Service and is properly operating as a nonprofit entity under
the law of the state in which the entity was formed.
(13) Take a confession of judgment or power of attorney to
confess judgment against a contract debtor.
(14) Employ an unfair, unconscionable, or deceptive act or
practice, including the knowing omission of any material
information.
(b) If a licensee furnishes debt management services to a debtor,
the licensee may not, directly or indirectly, do any of the following:
(1) Purchase a debt or obligation of the debtor.
(2) Receive from or on behalf of the debtor:
(A) a promissory note or other negotiable instrument other
than a check or a demand draft; or
(B) a postdated check or demand draft.
(3) Lend money or provide credit to the debtor.
(4) Obtain a mortgage or other security interest from any person
in connection with the services provided to the debtor.
(5) Except as permitted by federal law, disclose the identity or
identifying information of the debtor or the identity of the
debtor's creditors, except:
(A) to the department, upon proper demand;
(B) to a creditor of the debtor, to the extent necessary to
secure the cooperation of the creditor in a plan; or
(C) to the extent necessary to administer the plan.
(6) Charge the debtor for or provide credit or other insurance,
coupons for goods or services, membership in a club, access to
computers or the Internet, or any other matter not directly
related to debt management services or educational services
concerning personal finance, except as permitted under section
8(j) of this chapter.
(7) Furnish legal advice or perform legal services unless the
person furnishing the advice or performing the services is
licensed to practice law.
(c) This chapter does not authorize any person to engage in the
practice of law.
(d) A licensee may not receive a gift, bonus, premium, reward, or
other compensation, directly or indirectly, for advising, arranging, or
assisting a debtor in connection with obtaining an extension of credit
or other service from a lender or service provider.
As added by P.L.35-2010, SEC.132. Amended by P.L.216-2013,
SEC.31.
IC 28-1-29-9.7
Advertising
Sec. 9.7. A licensee:
(1) may not use false, misleading, or deceptive advertising; and
(2) shall meet the following conditions in advertising:
(A) An advertisement may not include a statement that states
or implies that no financial problem is too great for the
licensee to solve.
(B) An advertisement may not include a statement that states
or implies that the licensee will use the licensee's own cash
to pay the debtor's accounts.
(C) All advertisements must contain the statement "We do
not lend money.".
(D) All advertisements must contain the true name and
address of the licensee.
As added by P.L.35-2010, SEC.133.
IC 28-1-29-10
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 28-1-29-10.5
Record keeping and retention; examinations and investigations;
payment of costs; records outside Indiana; court order compelling
compliance; confidentiality; department's authority to enter into
cooperative regulatory agreements; examination of vendors
Sec. 10.5. (a) A licensee shall maintain in the licensee's business
any books, accounts, and records that enable the department to
determine whether the licensee is complying with this chapter. The
books, accounts, and records shall be preserved for at least two (2)
years after making the final entry of any agreement recorded in the
books, accounts, and records. A licensee is subject to IC 28-1-2-30.5
with respect to any records maintained by the licensee.
(b) In administering this chapter and in order to determine
whether this chapter is being complied with by a person engaging in
acts subject to this chapter, the department may examine the records
of a person and may make investigations of a person as necessary to
determine compliance. Records subject to examination under this
section include the following:
(1) Training, operating, and policy manuals.
(2) Minutes of:
(A) management meetings; and
(B) other meetings.
(3) Other records that the department determines are necessary
to perform the department's investigation or examination.
(c) The department may also administer oaths or affirmations,
subpoena witnesses, compel a witness's attendance, adduce evidence,
and require the production of any matter that is relevant to the
investigation. The department shall determine whether:
(1) the records maintained are sufficient; and
(2) the person has made the required information reasonably
available.
(d) If the department:
(1) investigates; or
(2) examines the books and records of;
a person that is subject to this chapter, the person shall pay all
reasonably incurred costs of the investigation or examination in
accordance with the fee schedule adopted by the department under
IC 28-11-3-5. Any costs required to be paid under this subsection
shall be paid not later than sixty (60) days after the person receives
a notice from the department of the costs being assessed. The
department may impose a fee, in an amount fixed by the department
under IC 28-11-3-5, for each day that the assessed costs are not paid,
beginning on the first day after the sixty (60) day period described in
this subsection.
(e) The department shall be given free access to the records
wherever located. If the person's records are located outside Indiana,
at the discretion of the director, the records shall be made available
to the department at a convenient location within Indiana, or the
person shall pay the reasonable and necessary expenses for the
department or the department's representative to examine the records
where the records are maintained.
(f) If a person fails to:
(1) obey a subpoena without a lawful excuse; or
(2) give testimony;
the department may apply to a civil court for an order compelling
compliance.
(g) The department shall not make public the name or identity of
a person whose acts or conduct the department investigates under
this section or the facts disclosed in the investigation. However, this
subsection does not apply to disclosures of enforcement proceedings
under this chapter.
(h) The department may:
(1) enter into a cooperative arrangement with another federal or
state agency having authority over debt management
companies; and
(2) exchange with the agency information about a person
subject to this chapter, including information obtained during
an examination of the person.
(i) If a person doing business as a debt management company
contracts with an outside vendor to provide a service that would
otherwise be undertaken internally by the person doing business as
a debt management company and be subject to the department's
routine examination procedures, the person that provides the service
to the person doing business as a debt management company shall,
at the request of the director, submit to an examination by the
department. If the director determines that an examination under this
subsection is necessary or desirable, the examination may be made
at the expense of the person to be examined. If the person to be
examined under this subsection refuses to permit the examination to
be made, the director may order any person doing business as a debt
management company that receives services from the person refusing
the examination to:
(1) discontinue receiving one (1) or more services from the
person refusing the examination; or
(2) otherwise cease conducting business with the person
refusing the examination.
As added by P.L.35-2010, SEC.134.
IC 28-1-29-11
Impounding books, records, and accounts
Sec. 11. Upon affidavit of any person, or other information that
the licensee has failed to comply with the provisions of this chapter,
and after a preliminary investigation indicates probable cause that a
violation has occurred, the department shall have authority to
impound such books, records, and accounts as it deems necessary.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.263-1985, SEC.108; P.L.42-1993, SEC.56.
IC 28-1-29-12
Repealed
(Repealed by P.L.35-2010, SEC.209.)
IC 28-1-29-13
Enforcement by the department; civil penalties; department's
recovery of costs; factors for determining amount of civil penalty;
violation a Class A misdemeanor
Sec. 13. (a) The department may enforce this chapter and rules
adopted under this chapter by taking one (1) or more of the following
actions:
(1) Order a debt management company or a director, employee,
or other agent of a debt management company to cease and
desist from any violations.
(2) Order a debt management company or a person that has
caused a violation to correct the violation, including making
restitution of money or property to a person aggrieved by a
violation.
(3) Prosecute a civil action to:
(A) enforce an order;
(B) obtain restitution, an injunction, or other equitable relief;
or
(C) accomplish both clauses (A) and (B).
(b) Subject to subsection (c), if the department determines, after
notice and an opportunity to be heard, that a person has violated this
chapter, the department may, in addition to or instead of all other
remedies available under this section, impose upon the person a civil
penalty not greater than ten thousand dollars ($10,000) per violation.
(c) If a person violates or knowingly authorizes, directs, or aids in
the violation of a final order issued under subsection (a)(1) or (a)(2),
the department may impose a civil penalty of not more than twenty
thousand dollars ($20,000) for each violation.
(d) The department may maintain an action in any county to
enforce this chapter.
(e) The department may recover the reasonable costs of enforcing
this chapter under subsections (a) through (d), including attorney's
fees.
(f) In determining the amount of a civil penalty to impose under
subsection (b) or (c), the department shall consider:
(1) the seriousness of the violation;
(2) the good faith of the person who violated this chapter;
(3) any previous violations by the person who violated this
chapter;
(4) the deleterious effect of the violation on the public;
(5) the net worth of the person who violated this chapter; and
(6) any other factor the department considers relevant to the
determination of a civil penalty.
(g) In addition to the revocation provision of section 4 of this
chapter, a person who violates section 3, 5, 6, 8, 8.3, 9, or 9.5 of this
chapter commits a Class A misdemeanor, and the license of the
licensee shall be revoked on the date of the conviction of an offense.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by Acts 1978, P.L.2, SEC.2815; P.L.42-1993, SEC.58;
P.L.35-2010, SEC.135; P.L.89-2011, SEC.44.
IC 28-1-29-14
Review of department decisions; applicability of laws governing
administrative orders and procedures; venue
Sec. 14. Any applicant for a license aggrieved by a decision of the
department pursuant to this chapter may file a petition for review as
prescribed in IC 4-21.5. Except as otherwise provided, IC 4-21.5
applies to and governs all agency action taken by the department
under this chapter. All proceedings for administrative review under
IC 4-21.5-3 or judicial review under IC 4-21.5-5 shall be held in
Marion County.
(Formerly: Acts 1971, P.L.397, SEC.1; Acts 1972, P.L.10, SEC.6.)
As amended by P.L.7-1987, SEC.160; P.L.42-1993, SEC.59;
P.L.35-2010, SEC.136.
IC 28-1-29-15
Providing materials and agreements electronically; consumer's
consent required; disclosures through Internet web site; debtor's
right to request written copy
Sec. 15. (a) As used in this section, "consumer" means an
individual who seeks or obtains goods or services that are used
primarily for personal, family, or household purposes.
(b) As used in this section, "federal act" means the Electronic
Signatures in Global and National Commerce Act (15 U.S.C. 7001
et seq., as amended).
(c) A licensee may satisfy the requirements of section 7.7, 8, or 9
of this chapter by means of the Internet or other electronic means if
the licensee obtains a consumer's consent in the manner provided by
Section 101(c)(1) of the federal act.
(d) The disclosures and materials required by section 7.7, 8, or 9
of this chapter shall be presented in a form that is capable of being
accurately reproduced for later reference.
(e) With respect to disclosure by means of an Internet web site,
the disclosure of the information required by section 7.7 of this
chapter must appear on one (1) or more screens that:
(1) contain no other information; and
(2) the debtor must see before proceeding to assent to formation
of an agreement.
(f) At the time of providing the materials and agreement required
by sections 7.7, 8, and 9 of this chapter, a licensee shall inform the
debtor that upon electronic, telephonic, or written request, the
licensee shall:
(1) send the debtor a written copy of the materials; and
(2) comply with a request as provided in subsection (g).
(g) If a licensee is requested, after an agreement is completed or
terminated, to send a written copy of the materials required by
section 7.7, 8, or 9 of this chapter, the licensee shall send the
materials at no charge to the debtor not later than three (3) business
days after the request. However, the licensee is not required to
comply with a request more than once per calendar month or if the
licensee reasonably believes the request is made for purposes of
harassment.
(h) A licensee that maintains an Internet web site shall disclose on
the home page of the licensee's web site or on a page that is clearly
and conspicuously connected to the home page by a link that clearly
reveals the following:
(1) The licensee's name and all names under which the licensee
does business.
(2) The licensee's principal business address, telephone number,
and electronic mail address, if any.
(3) The names of the licensee's principal officers.
(i) A licensee may not terminate the licensee's agreement because
a consumer who has consented to electronic communication in the
manner provided by Section 101 of the federal act withdraws consent
as provided in the federal act.
As added by P.L.35-2010, SEC.137.
IC 28-1-29-16
Disclosures and documents to be in English; translation required
if another language used
Sec. 16. Unless the department provides otherwise in a rule, the
disclosures and documents required by this chapter must be in
English. If a licensee communicates with a debtor primarily in a
language other than English, the licensee shall furnish a translation
of the disclosures and documents required by this chapter from the
other language into English.
As added by P.L.35-2010, SEC.138.
IC 28-1-29-17
Soliciting or accepting contributions from debtors prohibited
Sec. 17. Unless a fee is specifically authorized under the chapter,
a licensee may not solicit or accept a voluntary contribution from a
contract debtor for any service provided to the contract debtor.
As added by P.L.35-2010, SEC.139.
IC 28-1-29-18
Delegation of duties; liability of licensee; violations by lead
generators
Sec. 18. (a) If a licensee delegates any of the licensee's duties or
obligations under an agreement or this chapter to another person,
including an independent contractor or a lead generator, the licensee
is liable for any conduct of the person which, if done by the licensee,
would violate the agreement or this chapter.
(b) A lead generator or another person that:
(1) provides services to or for a licensee; and
(2) violates this chapter;
commits a deceptive act that is actionable under IC 24-5-0.5 and
subject to the penalties of IC 24-5-0.5.
As added by P.L.35-2010, SEC.140. Amended by P.L.216-2013,
SEC.32.
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