Plain English Breakdown
The bill expands protections but relies on definitions found elsewhere in the full legislation, which are not included here.
Fair Debt Settlement Practices Act
This law expands existing rules for debt settlement companies to protect commercial financing recipients and defined debtors, in addition to individual consumers.
What This Bill Does
- Expands current consumer protections to include commercial financing recipients and defined debtors.
- Prohibits debt settlement providers from using false, deceptive, or misleading acts when offering services.
- Requires providers to give clients specific disclosures and an unsigned copy of the proposed contract before signing.
- Bans unfair, abusive, or deceptive practices related to payment processor activities.
- Allows clients to cancel their service contracts at any time without paying a fee or penalty.
Who It Names or Affects
- Individual consumers who use debt settlement services.
- Commercial financing recipients as defined by the law.
- Debtors as defined by the law.
- Companies that provide debt settlement services and payment processing.
Terms To Know
- Commercial financing recipients
- Entities receiving commercial financing, now covered under these rules as defined in the bill.
- Debt settlement provider
- A company that provides debt settlement services and is subject to prohibitions on false or deceptive practices.
Limits and Unknowns
- The official text does not provide the specific definitions for 'commercial financing recipients' or 'debtors,' only stating they are defined.
- The effective date of the law is not listed in the provided source material.
- While the bill passed both chambers, the final status regarding executive action (such as a governor's signature) is not shown.