§ 19-14.8-28. Prohibited acts and practices.
(a) A provider may not, directly or indirectly:
(1) Misappropriate or misapply money held in trust;
(2) Settle a debt on behalf of an individual for more than fifty percent (50%) of the
principal amount of the debt owed a creditor, unless the individual assents to the
settlement after the creditor has assented;
(3) Take a power of attorney that authorizes it to settle a debt, unless the power of
attorney expressly limits the providers authority to settle debts for not more than
fifty percent (50%) of the principal amount of the debt owed a creditor;
(4) Exercise or attempt to exercise a power of attorney after an individual has terminated
an agreement;
(5) Initiate a transfer from an individual's account at a bank or with another person
unless the transfer is:
(A) A return of money to the individual; or
(B) Before termination of an agreement, properly authorized by the agreement and this
chapter, and for:
(i) Payment to one or more creditors pursuant to a plan; or
(ii) Payment of a fee;
(6) Offer a gift or bonus, premium, reward, or other compensation to an individual for
executing an agreement;
(7) Offer, pay, or give a gift or bonus, premium, reward, or other compensation to a 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, unless
neither the provider nor the person making the referral communicates to the prospective
customer the identity of the source of the referral;
(8) Receive a bonus, commission, or other benefit for referring an individual to a person;
(9) Structure a plan in a manner that would result in a negative amortization of any of
an individual'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;
(10) Compensate its employees on the basis of a formula that incorporates the number of
individuals the employee induces to enter into agreements;
(11) Settle a debt or lead an individual to believe that a payment to a creditor is in
settlement of a debt to the creditor unless, at the time of settlement, the individual
receives a certification by the creditor that the payment is in full settlement of
the debt;
(12) Make a representation that:
(A) The provider 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;
(13) Misrepresent that it is authorized or competent to furnish legal advice or perform
legal services;
(14) Represent that it is a not-for-profit entity unless it is organized and properly operating
as a not-for-profit under the law of the state in which it was formed or that it is
a tax-exempt entity unless it has received certification of tax-exempt status from
the Internal Revenue Service;
(15) Take a confession of judgment or power of attorney to confess judgment against an
individual; or
(16) Employ an unfair, unconscionable, or deceptive act or practice, including the knowing
omission of any material information.
(b) If a provider furnishes debt-management services to an individual, the provider may
not, directly or indirectly:
(1) Purchase a debt or obligation of the individual;
(2) Receive from or on behalf of the individual:
(A) A promissory note or other negotiable instrument other than a check or a demand draft;
or
(B) A post-dated check or demand draft;
(3) Lend money or provide credit to the individual, except as a deferral of a settlement
fee at no additional expense to the individual;
(4) Obtain a mortgage or other security interest from any person in connection with the
services provided to the individual;
(5) Except as permitted by federal law, disclose the identity or identifying information
of the individual or the identity of the individual's creditors, except to:
(A) The director, upon proper demand;
(B) A creditor of the individual, to the extent necessary to secure the cooperation of
the creditor in a plan; or
(C) The extent necessary to administer the plan;
(6) Except as otherwise provided in § 19-14.8-23(f), provide the individual less than the full benefit of a compromise of a debt arranged
by the provider;
(7) Charge the individual 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; or
(8) Furnish legal advice or perform legal services, unless the person furnishing that
advice to or performing those services for the individual is licensed to practice
law.
(c) This chapter does not authorize any person to engage in the practice of law.
(d) A provider may not receive a gift or bonus, premium, reward, or other compensation,
directly or indirectly, for advising, arranging, or assisting an individual in connection
with obtaining, an extension of credit or other service from a lender or service provider,
except for educational or counseling services required in connection with a government-sponsored
program.
(e) Unless a person supplies goods, services, or facilities generally and supplies them
to the provider at a cost no greater than the cost the person generally charges to
others, a provider may not purchase goods, services, or facilities from the person
if an employee or a person that the provider should reasonably know is an affiliate
of the provider:
(1) Owns more than ten percent (10%) of the person; or
(2) Is an employee or affiliate of the person.