§ 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; returned payment charge; fees not considered debt

Indiana § 28-1-29-8.3

• Jurisdiction: Indiana
• Art. 1: DEPARTMENT OF FINANCIAL INSTITUTIONS
• Ch. 29: Debt Management Companies

Text

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 during 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 returned payment by a bank or other depository
institution of a dishonored check, electronic funds transfer, 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.

Legislative History

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; P.L.186-2015, SEC.34; P.L.69-2018, SEC.48.