1.This Act may be cited as the
Debt Settlement Consumer Protection
Act of 2010
.
2.Regulation of debt
settlement services
(a)The Consumer Credit
Protection Act (15 U.S.C. 1601 et seq.) is amended by adding at the end the
following:
<enum>X</enum><header>Debt settlement
services</header>
<section id="ID65530f2b0c23493e95bce68682752acc"><enum>1001.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph id="id36CCB20C2E5947F4B51518CBE0CBC19B"><enum>(1)</enum><header>Attorney
general of a State</header><text>The term <term>attorney general of a
State</term> means the attorney general or other chief law enforcement officer
of a State.</text>
</paragraph><paragraph id="IDb5d3001a045846858ac3813d807d4480"><enum>(2)</enum><header>Commission</header><text>The
term <term>Commission</term> means the Federal Trade Commission.</text>
</paragraph><paragraph id="IDc424effefeb3408c9be1a93cb393b1e3"><enum>(3)</enum><header>Consumer</header><text>The
term <term>consumer</term> means any person.</text>
</paragraph><paragraph id="IDe9255bb1d0774c8f9e6617e9fc9cd087"><enum>(4)</enum><header>Consumer
settlement account</header><text>The term <term>consumer settlement
account</term> means any account or other means or device in which payments,
deposits, or other transfers from a consumer are held or transferred to a debt
settlement provider for the accumulation of the consumer’s funds in
anticipation of proffering an adjustment or settlement of a debt or obligation
of the consumer to a creditor on behalf of the consumer.</text>
</paragraph><paragraph id="id0D5A7210B9AC472AAEC9B92205477F8F"><enum>(5)</enum><header>Debt settlement
program</header><text>The term <term>debt settlement program</term> means the
actions and activities undertaken by a debt settlement provider and a consumer
in connection with the provision of debt settlement service.</text>
</paragraph><paragraph id="ID1d87aeab51f74f069aca649792bea65e"><enum>(6)</enum><header>Debt settlement
provider</header>
<subparagraph id="id044DA30AFB784A799FB1A9B5AEC22AF5"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraph (B), the term
<term>debt settlement provider</term> means any person or entity engaging in,
or holding itself out as engaging in, the business of providing debt settlement
services in exchange for a fee or compensation, or any person who solicits for
or acts on behalf of any person or entity engaging in, or holding itself out as
engaging in, the business of providing debt settlement services in exchange for
any fee or compensation.</text>
</subparagraph><subparagraph id="id845969F4FCA440879C5D46BF38C1EBEA"><enum>(B)</enum><header>Exception</header><text>The
term <term>debt settlement provider</term> does not include the
following:</text>
<clause id="ID1cebb9672d7d4db39b15b4307529b6b9"><enum>(i)</enum><text>Attorneys
when—</text>
<subclause id="id5C09133A3E0843EF80698DFDE8A1D0A2"><enum>(I)</enum><text>acting in the
ordinary practice of their professions;</text>
</subclause><subclause id="id2208A5D8C4F040A1B1A87107FF8E804C"><enum>(II)</enum><text>acting through
any entity in the ordinary practice of their profession;</text>
</subclause><subclause id="idED4C3E50CF9049F1BA3CE2131503B4E0"><enum>(III)</enum><text>acting in the
States where they are licensed to practice their profession; and</text>
</subclause><subclause id="idA6308228A315499C93CC85707CF9339A"><enum>(IV)</enum><text>not holding
themselves out as debt settlement providers or providing debt settlement
service.</text>
</subclause></clause><clause id="ID487cb37e02eb4a3a9bf956a8e5792a38"><enum>(ii)</enum><text>Escrow agents,
accountants, broker dealers in securities, or investment advisors in
securities, when acting—</text>
<subclause id="idC1639465C0124F2BBD8B36C081A86F7D"><enum>(I)</enum><text>in the ordinary
practice of their professions; and</text>
</subclause><subclause id="idD2E1F9D9E6D84035AFC5E0A02EC56BB0"><enum>(II)</enum><text>through any
entity in the ordinary practice of their profession.</text>
</subclause></clause><clause id="ID70668ab2ea2742ee97ffb917791b3a24"><enum>(iii)</enum><text>Any bank, agent
of a bank, trust company, savings and loan association, savings bank, credit
union, crop credit association, development credit corporation, industrial
development corporation, title insurance company, or insurance company
operating or organized under the laws of a State or the United States.</text>
</clause><clause id="id0AFC2115EA6D4640B8CF35012BE2E31F"><enum>(iv)</enum><text>Mortgage
servicers (as such term is defined in section 6(i) of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2605(i)(2)) carrying out mortgage
loan modifications.</text>
</clause><clause id="ID46a7cc1c8e76487dbb7f024738fa423e"><enum>(v)</enum><text>Any person who
performs credit services for such person's employer while receiving a regular
salary or wage when the employer is not engaged in the business of offering or
providing debt settlement service.</text>
</clause><clause id="ID7840dd0122814178842c57eca21d634c"><enum>(vi)</enum><text>An organization
that is described in section 501(c)(3) and subject to section 501(q) of the
Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such
Code.</text>
</clause><clause id="ID92acc062f4aa45b490ab08103bb468bb"><enum>(vii)</enum><text>Public officers
while acting in their official capacities and persons acting under court
order.</text>
</clause><clause id="ID294a729c9c964c999bf62ec60ef59548"><enum>(viii)</enum><text>Any person
while performing services incidental to the dissolution, winding up, or
liquidating of a partnership, corporation, or other business enterprise.</text>
</clause></subparagraph></paragraph><paragraph id="ID6552cb5ebc164115bccfa29432390790"><enum>(7)</enum><header>Debt settlement
service</header>
<subparagraph id="id0B8243A034CF488EA25ECF3157FEDE0F"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraph (B), the term
<term>debt settlement service</term> means—</text>
<clause id="ID20502384244140b09c4835121f1a2500"><enum>(i)</enum><text>offering to
provide advice or service, or to act or acting as an intermediary between or on
behalf of a consumer and one or more of a consumer’s creditors, where the
primary purpose of the advice, service, or action is to obtain a settlement,
adjustment, or satisfaction of the consumer’s debt to a creditor in an amount
less than the full amount of the principal amount of the debt or in an amount
less than the current outstanding balance of the debt; or</text>
</clause><clause id="IDf7cff1ca399445809e08078a1bad426d"><enum>(ii)</enum><text>offering to
provide services related to or providing services advising, encouraging,
assisting, or counseling a consumer to accumulate funds for the primary purpose
of proposing, obtaining, or seeking to obtain a settlement, adjustment, or
satisfaction of the consumer’s debt to a creditor in an amount less than the
full amount of the principal amount of the debt or in an amount less than the
current outstanding balance of the debt.</text>
</clause></subparagraph><subparagraph id="ID4d2e81931d8c4f42922034e71730830d"><enum>(B)</enum><header>Exception</header><text>The
term <term>debt settlement service</term> does not include services of an
attorney in providing information, advice, or legal representation with respect
to filing a case or proceeding under title 11, United States Code.</text>
</subparagraph></paragraph><paragraph id="ID30414b541607477eb8ba14ccb8cd1738"><enum>(8)</enum><header>Enrollment
fee</header><text>The term <term>enrollment fee</term> means any fee,
obligation, or compensation paid or to be paid by the consumer to a debt
settlement provider in consideration of or in connection with establishing a
contract or other agreement with a consumer related to the provision of debt
settlement service.</text>
</paragraph><paragraph id="ID9ebc4e4078b84124a5c662031cc0f0d3"><enum>(9)</enum><header>Maintenance
fee</header><text>The term <term>maintenance fee</term> means any fee,
obligation, or compensation paid or to be paid by a consumer on a periodic
basis to a debt settlement provider in consideration of maintaining the
relationship and services to be provided by a debt settlement provider in
accordance with a contract with a consumer related to the provision of debt
settlement service.</text>
</paragraph><paragraph id="ID4a8f2f4201c54f5da6d2f9a81f266f7e"><enum>(10)</enum><header>Principal
amount of the debt</header><text>The term <term>principal amount of the
debt</term> means the total amount or outstanding balance owed by a consumer to
one or more creditors for a debt that is included in a contract for debt
settlement service at the time when the consumer enters into a contract for
debt settlement service pursuant to section 1002(a).</text>
</paragraph><paragraph id="ID616777b0292946b7b182cf07fe5b3c9c"><enum>(11)</enum><header>Settlement
fee</header><text>The term <term>settlement fee</term> means any fee,
obligation, or compensation paid or to be paid by a consumer to a debt
settlement provider in consideration of or in connection with an agreement or
other arrangement on the part of a creditor to accept less than the principal
amount of the debt as satisfaction of the creditor’s claim against the
consumer.</text>
</paragraph></section><section id="IDeb793d23317647768a82aae5316fdcb3"><enum>1002.</enum><header>Required
acts</header>
<subsection id="ID22ba42a4ad19417f85884609478b6a65"><enum>(a)</enum><header>Contract
required</header>
<paragraph id="idCB97A2326F324F4FBB3608B56A1D7C5B"><enum>(1)</enum><header>In
general</header><text>A debt settlement provider may not provide a debt
settlement service to a consumer or receive any fee from a consumer for a debt
settlement service without a written contract described in paragraph (2) that
is signed by the consumer.</text>
</paragraph><paragraph id="ID3fc5b2e00c6348b6bd8786e0cdca9f97"><enum>(2)</enum><header>Contract
contents</header><text>A contract described in this paragraph is a contract
between a debt settlement provider and a consumer for debt settlement services
that includes the following:</text>
<subparagraph id="ID374eb94e4d1f438d8d6c9524a0d6ea0f"><enum>(A)</enum><text>The name and
address of the consumer.</text>
</subparagraph><subparagraph id="ID735119d2134e4419b17738373128d90f"><enum>(B)</enum><text>The date of
execution of the contract.</text>
</subparagraph><subparagraph id="IDba6680e4264d46e4b3461a4c4323c84f"><enum>(C)</enum><text>The legal name of
the debt settlement provider, including any other business names used by the
debt settlement provider.</text>
</subparagraph><subparagraph id="IDc2a207d20f8f4b5aa756d9b19b3b562f"><enum>(D)</enum><text>The corporate
address and regular business address, including a street address, of the debt
settlement provider.</text>
</subparagraph><subparagraph id="ID27eeaf802a8242f1ae25d77278dcecdb"><enum>(E)</enum><text>The license or
registration number under which the debt settlement provider is licensed or
registered if the consumer resides in a State that requires a debt settlement
provider to obtain a license or registration as a condition of providing debt
settlement service in that State.</text>
</subparagraph><subparagraph id="ID91d7ef609dec488695abc656adfa5efa"><enum>(F)</enum><text>The telephone
number at which the consumer may speak with a representative of the debt
settlement provider during normal business hours.</text>
</subparagraph><subparagraph id="IDe14f7355a400435c9ec2d6edd1b89f6b"><enum>(G)</enum><text>A complete list
of the consumer’s accounts, debts, and obligations covered under the debt
settlement service covered by the contract, including the name of each creditor
and principal amount of each debt.</text>
</subparagraph><subparagraph id="ID13e1ebdea4914a79984d9f5792421f37"><enum>(H)</enum><text>A description of
the services to be provided by the debt settlement provider, including the
expected timeframe for settlement for each account, debt, or obligation
included in subparagraph (G).</text>
</subparagraph><subparagraph id="IDd1b5a305fa9c4f4281cec897c02ddeab"><enum>(I)</enum><text>A clear and
conspicuous itemized list of all fees, including any enrollment fee and
settlement fees to be paid by the consumer to the debt settlement provider, and
the date, approximate date, or circumstances under which each fee will become
due.</text>
</subparagraph><subparagraph id="IDd9a6469e71f94dc6aebe29fb72bafe67"><enum>(J)</enum><text>A clear and
conspicuous statement of a good faith estimate of the total amount of all fees
to be collected by the debt settlement provider from the consumer for the
provision of debt settlement service under the contract.</text>
</subparagraph><subparagraph id="ID6b93b23a8ae2493e97f174cfd8852de4"><enum>(K)</enum><text>A clear and
conspicuous statement of the proposed savings goals for the consumer, stating
the amount to be saved per month or other period, the time period over which
the savings goals extend, and the total amount of the savings expected to be
paid by the consumer pursuant to the terms of the contract.</text>
</subparagraph><subparagraph id="ID30160caa1819482fac9db7411b8112c1"><enum>(L)</enum><text>A notice to the
consumer that unless the consumer is insolvent, if a creditor settles a debt
for an amount less than the consumer’s current outstanding balance at the time
of settlement, the consumer may incur a tax liability.</text>
</subparagraph><subparagraph id="IDc85ba236e5ee49f9b9d7117536d35a8e"><enum>(M)</enum><text>A written notice
to the consumer, which includes a form that the consumer may use and the
address to which the form may be returned to the debt settlement provider, that
the consumer may cancel the contract pursuant to the provisions of section
1006.</text>
</subparagraph><subparagraph id="ID568bd02af83d4847b58e7dc5d6d14c9c"><enum>(N)</enum><text>A clear and
conspicuous written notice to the consumer that—</text>
<clause id="id16D483FE81D64F63BC83140B0135827C"><enum>(i)</enum><text>the consumer may
cancel the contract—</text>
<subclause id="id1C10E4DC40AD4EF7BFF0880000997D6C"><enum>(I)</enum><text>within 90 days
of—</text>
<item id="idBFE04E109EE84C32AE315359C29F58C6"><enum>(aa)</enum><text>the execution of
the contract; or</text>
</item><item id="id566D4DF65D9C4A0A95524403F5BEF71E"><enum>(bb)</enum><text>the provision of
the notice of the right to cancel and cancellation form; or</text>
</item></subclause><subclause id="id33FBD43F550A4163A0C421DB177B9B7B"><enum>(II)</enum><text>at any time in
the event of a violation of this title on the part of the debt settlement
provider; and</text>
</subclause></clause><clause id="ID316f8b2892704d5bbedb1b3962fd3e21"><enum>(ii)</enum><text>in the case the
consumer cancels the contract as described in clause (i)—</text>
<subclause id="idF51D153CECA54045B8A37BCB2CE4E280"><enum>(I)</enum><text>the consumer will
be entitled to a full refund—</text>
<item id="id81137FECC33A439D8DBB2561486CFCA5"><enum>(aa)</enum><text>of
all fees and compensation paid by the consumer to the debt settlement provider,
except any settlement fee; and</text>
</item><item id="idD7E47739BBAF4DBFA6F6D10F8A7088FA"><enum>(bb)</enum><text>of
all funds provided by the consumer to the debt settlement provider for a
consumer settlement account, except for funds actually paid to a creditor on
behalf of the consumer, under the terms of the contract for debt settlement
service; and</text>
</item></subclause><subclause id="IDe9332b7b28184758ac5b9c32ed3d4157"><enum>(II)</enum><text>all powers of
attorney granted to the debt settlement provider by the consumer will be
revoked and voided.</text>
</subclause></clause></subparagraph></paragraph></subsection><subsection id="IDbae326467f6b4f20bf567164709c16cb"><enum>(b)</enum><header>Notification
required</header><text>A debt settlement provider shall, before the earlier of
the date of entering into a written contract with a consumer for debt
settlement services or rendering debt settlement services to a consumer,
provide to the consumer in writing the following:</text>
<paragraph id="IDa8a699bcb86e46b79f776446000fb1c7"><enum>(1)</enum><text>An individualized
financial analysis of the consumer, including an assessment of the consumer’s
income, expenses, and debts.</text>
</paragraph><paragraph id="id2F5B23AD846747909CE4AEA8BA7CE3C3"><enum>(2)</enum><text>A description of
the debt settlement service being offered to the consumer by the debt
settlement provider, including the following:</text>
<subparagraph id="id73CDEB534C424801BD8336FCF254D6E5"><enum>(A)</enum><text>A description of
the debt settlement program being offered as part of the service.</text>
</subparagraph><subparagraph id="idB46AAE3B3D494B45859D81B9C3EF45C0"><enum>(B)</enum><text>A list of each of
the consumer's debts, creditors, and debt collectors that will be covered under
the program.</text>
</subparagraph></paragraph><paragraph id="IDcfb80c8ee0764d61bdd7ca2765c0764b"><enum>(3)</enum><text>A statement
containing the following:</text>
<subparagraph id="ID10ad04deebb2451bbd6064ed819ff308"><enum>(A)</enum><text>A good-faith
estimate of the length of time it will take to achieve settlement of each debt
covered under the program.</text>
</subparagraph><subparagraph id="ID99976ab984bb4895b8035766decb0213"><enum>(B)</enum><text>The specific time
by which the debt settlement service provider will make a bona fide settlement
offer to each creditor and debt collector covered under the program.</text>
</subparagraph><subparagraph id="IDcd5e970903d14e6cae6564d861ae6a07"><enum>(C)</enum><text>The total amount
of debt owed by the consumer to each creditor covered under the program.</text>
</subparagraph><subparagraph id="id38FF83D8ABBC49CD91B52C8ECC7DC30D"><enum>(D)</enum><text>An estimate of
the total and the monthly savings the consumer will be required to accumulate
to complete the program.</text>
</subparagraph></paragraph><paragraph id="ID05dec9505191484dbafa0ace02c74a84"><enum>(4)</enum><text>A clear and
conspicuous statement that—</text>
<subparagraph id="idE18DB600681B4F6B96F73D1F90BF85B2"><enum>(A)</enum><text>the consumer
remains legally obligated to make periodic or scheduled payments to creditors
while participating in a debt settlement program; and</text>
</subparagraph><subparagraph id="id11C6D55850224A88B561C8C82A195DDE"><enum>(B)</enum><text>the debt
settlement provider will not make any periodic or scheduled payments to
creditors on behalf of the consumer.</text>
</subparagraph></paragraph><paragraph id="IDb9136408f9e947b0a345529ffbf39caf"><enum>(5)</enum><text>A clear and
conspicuous notice to the consumer that—</text>
<subparagraph id="ID186c6fb7def94e159428b09b13916776"><enum>(A)</enum><text>the utilization
of debt settlement service may not be suitable for all consumers;</text>
</subparagraph><subparagraph id="ID1686b08a82fc43bf96d83319e8ba14a9"><enum>(B)</enum><text>the utilization
of debt settlement service may adversely impact the consumer’s credit history
and credit score;</text>
</subparagraph><subparagraph id="ID68f624674dd840d4b5cd2662a02749fd"><enum>(C)</enum><text>the consumer may
inquire about other means of dealing with indebtedness, including nonprofit
credit counseling and bankruptcy;</text>
</subparagraph><subparagraph id="ID3ec5c7b97b614614aa501569d202eb86"><enum>(D)</enum><text>the failure to
make periodic or scheduled payments to a creditor—</text>
<clause id="ID5eea1c3e82db4f7480a54f97672481bf"><enum>(i)</enum><text>is likely to
affect adversely the consumer’s creditworthiness;</text>
</clause><clause id="ID673443d89fc644d6adc89d33bdd8ce9c"><enum>(ii)</enum><text>may result in
continued collection activity by creditors or debt collectors;</text>
</clause><clause id="IDf7a54b350a014141bd2613cc7887efde"><enum>(iii)</enum><text>may result in
the consumer being sued by one or more creditors or debt collectors, and in the
garnishment of the consumer’s wages; and</text>
</clause><clause id="ID2042fbadf45945a78025500b8a06b5b6"><enum>(iv)</enum><text>may increase the
amount of money the consumer owes to one or more creditors or debt collectors
due to the imposition by the creditor of interest charges, late fees, and other
penalty fees; and</text>
</clause></subparagraph><subparagraph id="ID4dcd7a3d10764254bc8c9127fa1c7bbd"><enum>(E)</enum><text>any savings the
consumer realizes from use of a debt settlement service may be taxable
income.</text>
</subparagraph></paragraph></subsection><subsection id="ID3c7a20e0edab44b6bcd397020e7bc28f"><enum>(c)</enum><header>Determination
of benefit to consumers required</header><text>A debt settlement provider may
not enter into a written contract with a consumer unless the debt settlement
provider makes written determinations, supported by the financial analysis,
that—</text>
<paragraph id="IDa937b74abfcc44e7b637f993107a7213"><enum>(1)</enum><text>the consumer can
reasonably meet the requirements of the proposed debt settlement program
included in the debt settlement service offered to the consumer, including the
fees and the periodic savings amounts set forth in the savings goals under the
program;</text>
</paragraph><paragraph id="IDc772cf3df772479fa6e44e5ad5fff354"><enum>(2)</enum><text>there is a net
tangible financial benefit to the consumer of entering into the proposed debt
settlement program; and</text>
</paragraph><paragraph id="ID4612269053134875956093c64b2b161d"><enum>(3)</enum><text>the debt
settlement program is suitable for the consumer at the time the contract is to
be signed.</text>
</paragraph></subsection><subsection id="ID81c24f36a7444e519e83c88d54655db9"><enum>(d)</enum><header>Choice of
language</header><text>If a debt settlement provider communicates with a
consumer primarily in a language other than English, the debt settlement
provider shall furnish to the consumer a translation of the disclosures and
documents required by this title in that other language.</text>
</subsection><subsection id="ID1a1de0d6a476437c8aabfdca20e04b0c"><enum>(e)</enum><header>Monthly
statements required</header><text>A debt settlement provider shall, not less
frequently than monthly, provide each consumer with which it has a contract for
the provision of debt settlement service a statement of account balances, fees
paid, settlements completed, remaining debts, and any other term considered
appropriate by the Commission.</text>
</subsection></section><section id="ID68beb3e5e0f0427f9589a5c7cd3e9020"><enum>1003.</enum><header>Prohibited
acts</header>
<subsection id="ID8dab701592354445bbc118495d035d86"><enum>(a)</enum><header>Loans</header><text>A
debt settlement provider may not make loans or offer credit or solicit or
accept any note, mortgage, or negotiable instrument other than a check signed
by the consumer and dated no later than the date of signature.</text>
</subsection><subsection id="ID240e3dfc37bc4baa913181cc84efc748"><enum>(b)</enum><header>Confession of
judgment</header><text>A debt settlement provider may not take any confession
of judgment or power of attorney to confess judgment against the consumer or
appear as the consumer or on behalf of the consumer in any judicial or
non-judicial proceedings.</text>
</subsection><subsection id="ID854fcafdcd804178825077262ac9b927"><enum>(c)</enum><header>Release or
waiver of obligation</header><text>A debt settlement provider may not take any
release or waiver of any obligation to be performed on the part of the debt
settlement provider or any right of the consumer.</text>
</subsection><subsection id="ID7f63cca444bd430ab918b31b382a49fd"><enum>(d)</enum><header>Receipt of
third-Party compensation</header><text>A debt settlement provider may not
receive any cash, fee, gift, bonus, premium, reward, or other compensation from
any person other than the consumer explicitly for the provision of debt
settlement service to that consumer, without prior disclosure of such to the
consumer.</text>
</subsection><subsection id="ID5ddd54b0b1f34085ad6a6241f881e91e"><enum>(e)</enum><header>Confidentiality</header><text>A
debt settlement provider may not (without prior written consent of the
consumer) disclose to anyone the name or any personal information of a consumer
for whom the debt settlement provider has provided or is providing debt
settlement service other than to a consumer’s own creditors or the debt
settlement provider's agents, affiliates, or contractors for the purpose of
providing debt or settlement service.</text>
</subsection><subsection id="ID02537492700d4bbab0c2f84c65f4dc4e"><enum>(f)</enum><header>Misrepresentation,
omission, and false promises</header><text>A debt settlement provider may not
misrepresent, directly or by implication, any material fact, make a material
omission, or make a false promise directed to one or more consumers in
connection with the solicitation, offering, contracting or provision of debt
settlement service, including the following:</text>
<paragraph id="IDeb1d42beca60477fa6387a9c3d201032"><enum>(1)</enum><text>The total costs
to purchase, receive, or use the services, or the nature of the services to be
provided.</text>
</paragraph><paragraph id="IDfa110f39489a4966830354103ec19ef3"><enum>(2)</enum><text>Any material
restriction, limitation, or condition to receive the offered debt settlement
service.</text>
</paragraph><paragraph id="ID69cc54a2263d4777a6ce9d594bee6a13"><enum>(3)</enum><text>Any material
aspect of the performance, efficacy, nature, or central characteristics of the
offered debt settlement service.</text>
</paragraph><paragraph id="IDf1412165e83a40ef9d85909341389e5a"><enum>(4)</enum><text>Any material
aspect of the nature of terms of the seller’s cancellation policies.</text>
</paragraph><paragraph id="IDeb27830649284622be73839f5797b1d7"><enum>(5)</enum><text>Any claim of
affiliation with, or endorsement or sponsorship by, any person or government
entity.</text>
</paragraph><paragraph id="IDd08fc15874fe4fefac48f52e656beddc"><enum>(6)</enum><text>Any material
aspect of any debt settlement service, including the following:</text>
<subparagraph id="idDA63C864480D4418BEDAE75B310C75D2"><enum>(A)</enum><text>The amount of
time necessary to achieve settlement of all debt.</text>
</subparagraph><subparagraph id="id9C7DABAE35AA4F51B0EF239E089E57C1"><enum>(B)</enum><text>The amount of
money or the percentage of the debt amount that the consumer must accumulate
before the provider will initiate attempts with the consumer’s creditors or
debt collectors to settle the debt.</text>
</subparagraph><subparagraph id="idA20A0FCB6E2141978642685256FB18EC"><enum>(C)</enum><text>The effect of the
service on a consumer’s creditworthiness.</text>
</subparagraph><subparagraph id="idCDFB270C18FC4283913D67C6A2B22B28"><enum>(D)</enum><text>Whether the
provider is a nonprofit or a for-profit entity.</text>
</subparagraph></paragraph></subsection><subsection id="ID513353d9a68549feb48127f4bd163d6e"><enum>(g)</enum><header>Purchasing of
debts</header><text>A debt settlement provider may not purchase debts or engage
in the practice or business of debt collection.</text>
</subsection><subsection id="ID6ab878f62a374d8cabba192ee2c00316"><enum>(h)</enum><header>Secured
debt</header><text>A debt settlement provider may not include in a debt
settlement agreement any secured debt.</text>
</subsection><subsection id="IDfe57dd2fe3094efe8019c8a9c774f42a"><enum>(i)</enum><header>Unfair or
deceptive acts or practices</header><text>A debt settlement provider may not
employ any unfair, unconscionable, or deceptive act or practice, including the
knowing omission of any material information.</text>
</subsection><subsection id="ID431ecab9431f489fa1faa97040e88578"><enum>(j)</enum><header>Limitation on
communication</header><text>A debt settlement provider may not—</text>
<paragraph id="id6BB66838D42F49589D14A7EC5B859D96"><enum>(1)</enum><text>obtain a power of
attorney or other authorization from a consumer that prohibits or limits the
consumer or any creditor from communication directly with one another;
or</text>
</paragraph><paragraph id="id1EA04E2992F64494BD98A98C49CA8002"><enum>(2)</enum><text>represent,
expressly or by implication, that a consumer cannot or should not contact or
communicate with any creditor.</text>
</paragraph></subsection></section><section id="ID7733228181f842fa8e9fe99e6eac0c02"><enum>1004.</enum><header>Fees</header>
<subsection id="id38BB630DBE354447BA93FA5AFC7CCF96"><enum>(a)</enum><header>Types of fees
permitted</header><text>The types of fees that a debt settlement provider may
charge a consumer are the following:</text>
<paragraph id="id5B5947A840CF4B6980DCB903EA77BBC4"><enum>(1)</enum><text>Enrollment
fees.</text>
</paragraph><paragraph id="id0F421C2AD2A24873B52EE36C88AFA516"><enum>(2)</enum><text>Settlement
fees.</text>
</paragraph></subsection><subsection id="id32D9ACBAF21647CCBE9184C7694FF238"><enum>(b)</enum><header>Types of fees
prohibited</header><text>All fee types not included under subsection (a) are
prohibited, including maintenance fees.</text>
</subsection><subsection id="ID1b092152a2574290bfcbbb76891fcebe"><enum>(c)</enum><header>Enrollment fee
amounts</header><text>The amount of an enrollment fee charged by a debt
settlement provider shall not exceed the lesser of—</text>
<paragraph id="idF43B83143D7A4B93B09797C0777D7B34"><enum>(1)</enum><text>the amount that
is reasonable and commensurate to the debt settlement service provided to a
consumer; and</text>
</paragraph><paragraph id="id0AEF339B8B54468BA67D3B21F6A470FC"><enum>(2)</enum><text>$50.</text>
</paragraph></subsection><subsection id="ID39ce15cf451441c289c2ec396b08925e"><enum>(d)</enum><header>Debt settlement
fee amounts</header><text>The amount of a settlement fee charged by a debt
settlement provider shall not exceed the lesser of—</text>
<paragraph id="idD54EE0B5F72D4348A4547B7DE31928A8"><enum>(1)</enum><text>the amount that
is reasonable and commensurate to the debt settlement service provided to a
consumer; and</text>
</paragraph><paragraph id="id77805ED22CDC48AD8D26B9E4C7C0BE3F"><enum>(2)</enum><text>the amount that
is 5 percent of the difference between—</text>
<subparagraph id="id96AD1BCABC34404494233D455DCCFEDB"><enum>(A)</enum><text>the principal
amount of that debt; and</text>
</subparagraph><subparagraph id="idAE1FAC948FC44FBE85C39DE30610A2F5"><enum>(B)</enum><text>the
amount—</text>
<clause id="id05896D50F9AE4D5A8DFE25E4EA0090FE"><enum>(i)</enum><text>paid by the debt
settlement provider to the creditor pursuant to a settlement negotiated by the
debt settlement provider on behalf of the consumer as full and complete
satisfaction of the creditor’s claim with regard to that debt; or</text>
</clause><clause id="idC91AACD709A846749CB0CB08799DA8A1"><enum>(ii)</enum><text>negotiated by
the debt settlement provider and paid by the consumer to the creditor pursuant
to a settlement negotiated by the debt settlement provider on behalf of the
consumer as full and complete satisfaction of the creditor’s claim with regard
to that debt.</text>
</clause></subparagraph></paragraph></subsection><subsection id="IDd38abdd68d6d430fbd405cb285208b2f"><enum>(e)</enum><header>Timing of debt
settlement fees</header><text>A debt settlement provider shall not collect any
debt settlement fee from a consumer until—</text>
<paragraph id="id9DCBA7E88DB94AC691BC5E8AF1C60714"><enum>(1)</enum><text>a creditor enters
into a legally enforceable agreement with the consumer to accept funds in a
specific dollar amount as full and complete satisfaction of the creditor’s
claim with regard to that debt; and</text>
</paragraph><paragraph id="idDACE334F53FD4B33B0BD1E0EDA130385"><enum>(2)</enum><text>those funds are
provided—</text>
<subparagraph id="idE542924BDC4943DB97950CBFA6D86561"><enum>(A)</enum><text>by the debt
settlement provider on behalf of the consumer; or</text>
</subparagraph><subparagraph id="id7A4BE6B07CAD4433A41451E6BFEA2A0C"><enum>(B)</enum><text>directly by the
consumer to the creditor pursuant to a settlement negotiated by the debt
settlement provider.</text>
</subparagraph></paragraph></subsection></section><section id="IDb20b5473f6d74c239b012010367ea10b"><enum>1005.</enum><header>Consumer
settlement accounts</header>
<subsection id="IDf11c38beb657478db211effe6efdfbeb"><enum>(a)</enum><header>Trust account
required</header><text>A debt settlement provider who receives funds from a
consumer shall hold all funds received for a consumer settlement account in a
properly designated trust account in a federally insured depository
institution. Such funds shall remain the property of the consumer until the
debt settlement provider disburses the funds to a creditor on behalf of the
consumer as full or partial satisfaction of the consumer’s debt to the creditor
or the creditor’s claim against the consumer.</text>
</subsection><subsection id="id013FABE31ED94763BB914DDB61DC3EF3"><enum>(b)</enum><header>Independent
administration of account</header><text>A debt settlement provider may not hold
funds received for a consumer settlement account under subsection (a) in an
account administered by an entity that—</text>
<paragraph id="id225336463A3A4E83A334AEB163F5E91C"><enum>(1)</enum><text>is owned by,
controlled by, or in any way affiliated with the debt settlement service
provider; or</text>
</paragraph><paragraph id="id78D7105CB7F64E9ABE15580460AEB2BD"><enum>(2)</enum><text>gives or accepts
any money or other compensation in exchange for referrals of business involving
the debt settlement service provider.</text>
</paragraph></subsection><subsection id="IDc3a2cdf69cbe4a49a981938ac13a610a"><enum>(c)</enum><header>Limitations</header><text>A
debt settlement service provider shall not—</text>
<paragraph id="id1AD49C936EFD4FE38F7A730773F5597D"><enum>(1)</enum><text>be named on a
consumer’s bank account;</text>
</paragraph><paragraph id="id2529076EE32C4842809C3EE0B9C701CB"><enum>(2)</enum><text>take a power of
attorney in a consumer’s bank account;</text>
</paragraph><paragraph id="id4F798E27AB554D07A283DE2D20D450CF"><enum>(3)</enum><text>create a demand
draft on a consumer’s bank account;</text>
</paragraph><paragraph id="id0DC4485993384F99B9D3FF47696EB3D1"><enum>(4)</enum><text>exercise any
control over any bank account held by or on behalf of the consumer; or</text>
</paragraph><paragraph id="id611A44FC3B2F4A3DA81ED39E406FAC3D"><enum>(5)</enum><text>obtain any
information about a consumer’s bank account from any person other than the
consumer.</text>
</paragraph></subsection></section><section id="IDfebd7b587b5c45c5894f87e26d7df67a"><enum>1006.</enum><header>Cancellation
of contract</header>
<subsection id="IDaf8e52b1040b4b3e9ffe9b68f3c057e7"><enum>(a)</enum><header>In
general</header><text>A consumer may cancel a contract with a debt settlement
provider at any time.</text>
</subsection><subsection id="ID761331558495488ab5003cca1c1ea5ba"><enum>(b)</enum><header>Refunds</header>
<paragraph id="id8F846C41F3CB4AADBF02270C9C701CA3"><enum>(1)</enum><header>Cancellation
within 90 days or upon violation of this title</header><text>If a consumer
cancels a contract with a debt settlement provider not later than 90 days after
the date of the execution of the contract or at any time upon a violation of a
provision of this title by the debt settlement provider, the debt settlement
provider shall refund to the consumer all—</text>
<subparagraph id="idC3527F37D4114A64AB665CCE50E6D1A5"><enum>(A)</enum><text>fees paid to the
debt settlement provider by the consumer, with the exception of any earned
settlement fee; and</text>
</subparagraph><subparagraph id="id29BCEE10657842ABBDC610FB3927A36B"><enum>(B)</enum><text>funds paid by the
consumer to the debt settlement provider that—</text>
<clause id="idC5F9587A9A714E2A89511B22F3FB1A18"><enum>(i)</enum><text>have accumulated
in a consumer settlement account; and</text>
</clause><clause id="id08C3DA2869FD406B9F98D8486489928C"><enum>(ii)</enum><text>the debt
settlement provider has not disbursed to creditors.</text>
</clause></subparagraph></paragraph><paragraph id="ID9a09aead0a214437adf5c1fb57d0d809"><enum>(2)</enum><header>Cancellations
after 90 days</header><text>If a consumer cancels a contract with a debt
settlement provider later than 90 days after the date of the execution of the
contract and for any reason other than for a violation of a provision of this
title by the debt settlement provider, the debt settlement provider shall
refund to the consumer—</text>
<subparagraph id="id0B9B01F738EC481D991A9480639E4A2B"><enum>(A)</enum><text>half of all of
the fees collected from the consumer, with the exception of any earned
settlement fees; and</text>
</subparagraph><subparagraph id="idE6A8617D51EF4EBC88B7AAC2A0DC3EF7"><enum>(B)</enum><text>all funds paid by
the consumer to the debt settlement provider that have accumulated in a
consumer settlement account and which the debt service provider has not
disbursed to creditors.</text>
</subparagraph></paragraph><paragraph id="ID4594a76935ad4fbb83210f6f76e7972d"><enum>(3)</enum><header>Timing of
refunds</header><text>A debt settlement provider shall make any refund required
under this subsection not later than 5 business days after a notice of
cancellation is made on behalf of the consumer under subsection (d).</text>
</paragraph><paragraph id="idD710919BE36D4BE888BD9ACE93D72CB9"><enum>(4)</enum><header>Statement of
account</header><text>A debt settlement provider making a refund to a consumer
under this subsection shall include with such refund a full statement of
account showing the following:</text>
<subparagraph id="idB4293F150F0A440985DF93472175397E"><enum>(A)</enum><text>The fees received
by the debt settlement provider from the consumer.</text>
</subparagraph><subparagraph id="id7178A924AED1406EB9805F238C1851F0"><enum>(B)</enum><text>The fees refunded
to the consumer by the debt settlement provider.</text>
</subparagraph><subparagraph id="idB76C1E92679D4BB58E02A26BC50EF6D9"><enum>(C)</enum><text>The savings of
the consumer held by the debt settlement provider.</text>
</subparagraph><subparagraph id="id092F574C317049B2B0F88D0BC2DCA359"><enum>(D)</enum><text>The payments made
by the debt settlement provider to creditors on behalf of the consumer.</text>
</subparagraph><subparagraph id="id84492D30CA584C84BF98E7C4E21CA8D7"><enum>(E)</enum><text>The settlement
fees earned, if any, by the debt settlement provider by settling debt on behalf
of the consumer.</text>
</subparagraph><subparagraph id="id7927CBF5C8F64C19B3199EF184BC62DD"><enum>(F)</enum><text>The savings of
the consumer refunded to the consumer by the debt settlement provider.</text>
</subparagraph></paragraph></subsection><subsection id="idFA5BF1E23A6B427EA2252C65D51531D1"><enum>(c)</enum><header>Revocation of
powers of attorney and direct debit authorizations</header><text>Upon
cancellation of a contract by a consumer—</text>
<paragraph id="idF32F8783B1D9484F80027A58D303440F"><enum>(1)</enum><text>all powers of
attorney and direct debit authorizations granted to the debt settlement
provider by the consumer are revoked and voided; and</text>
</paragraph><paragraph id="idA94A790C60744525BADE71D4EB891F6E"><enum>(2)</enum><text>the debt
settlement provider shall immediately take any action necessary to reflect
cancellation of the contract, including notifying the recipient of any direct
debit authorization.</text>
</paragraph></subsection><subsection id="ID21c36ca92bd94428b0c4107a401503fe"><enum>(d)</enum><header>Notice of
cancellation to creditors</header><text>Upon the cancellation of a contract
under this section of the Act, the debt settlement provider shall provide
timely notice of the cancellation of such contract to each of the creditors
with whom the debt settlement provider has had any prior communication on
behalf of the consumer in connection with the provision of any debt settlement
service.</text>
</subsection></section><section id="ID9ef5492b33ca4219a6baf4b6c1efdbfb"><enum>1007.</enum><header>Obligation of
good faith</header><text display-inline="no-display-inline">A debt settlement
provider shall act in good faith in all matters under this title.</text>
</section><section id="ID84b6c44aadb84dac92172a22d92793bc"><enum>1008.</enum><header>Invalidation
of contracts</header>
<subsection id="ID2e4f911eef5d4e6b8b47ed5e82dfee7d"><enum>(a)</enum><header>Consumer
waivers invalid</header><text>A waiver by a consumer of any protection provided
or any right of the consumer under this title—</text>
<paragraph id="ID826188a396dc4c1aad2e4fbc52a58e20"><enum>(1)</enum><text>is void;
and</text>
</paragraph><paragraph id="ID0783ed5c14cd40eb98a30abd41ff2a5f"><enum>(2)</enum><text>may not be
enforced by any other person.</text>
</paragraph></subsection><subsection id="IDcc74182510904ad78f02ea46602495ca"><enum>(b)</enum><header>Attempt To
obtain waiver</header><text display-inline="yes-display-inline">Any attempt by
any person to obtain a waiver from any consumer of any protection provided by
or any right or protection of the consumer or any obligation or requirement of
the debt settlement provider under this title shall be considered a violation
of a provision of this title.</text>
</subsection><subsection id="IDc1a7de4958dd49fcac56e754e1db5066"><enum>(c)</enum><header>Contracts not
in compliance</header><text>Any contract for a debt settlement service that
does not comply with the provisions of this title—</text>
<paragraph id="ID255027daafdf45eb9a09e1c7863643f1"><enum>(1)</enum><text>shall be treated
as void;</text>
</paragraph><paragraph id="ID3393da4571e3477cbf8e11f2c2c13122"><enum>(2)</enum><text>may not be
enforced by any other person; and</text>
</paragraph><paragraph id="ID6aea6ce2874341f5973d8757a8381021"><enum>(3)</enum><text>upon notice of a
void contract, a refund by the debt settlement provider to the consumer shall
be made as if the contract had been cancelled as provided in section 1006(b)(1)
of this title.</text>
</paragraph></subsection></section><section id="ID11db2dbf27c04a3cbf9a051b66b346e3"><enum>1009.</enum><header>Advertising,
marketing, and communication practices</header><text display-inline="no-display-inline">A debt settlement provider shall not state
or imply claims, results, or outcomes in any advertising, marketing, or other
communication with consumers that represent or reflect results or outcomes,
including about the percentage or dollar amount by which debt may be reduced or
the amount a consumer may save or the historical experience of its customers
with respect to debt reduction, that—</text>
<paragraph id="idEB4176C62F824DAFBD44D7895739113D"><enum>(1)</enum><text display-inline="yes-display-inline">are materially different from the actual
average result or outcome achieved by that debt settlement provider on all of
the debt of consumers who enter the program; or</text>
</paragraph><paragraph id="idE07F09238B4F45C082AD3C12AB3E5355"><enum>(2)</enum><text display-inline="yes-display-inline">are not verified by an independent audit
that documents that the described result or outcome was achieved for all debt
enrolled in the program by at least 80 percent of the customers who began the
service in the most recent 2 calendar year period.</text>
</paragraph></section><section id="ID5c38ed15c5fa4db6be691ee5325fcab0"><enum>1010.</enum><header>Rulemaking by
Federal Trade Commission</header>
<subsection id="ID1979da8d5dd24f71b7ab9a897e04cd7e"><enum>(a)</enum><header>In
general</header><text>The Commission may prescribe rules with respect to
advertising and marketing practices, record retention, provision of accountings
to consumers, and such other matters as the Commission considers necessary to
improve the consumer experience with debt settlement providers.</text>
</subsection><subsection id="ID0e9f09a1e0224ead857785f170f55c3a"><enum>(b)</enum><header>Debt relief
service rules</header>
<paragraph id="IDbae905d3112d4dfcafdb6e059b45c6bf"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), the Commission may
prescribe rules with respect to the providers of debt relief service not
otherwise covered by this title.</text>
</paragraph><paragraph id="ID35ecdbea50ea45e2b582f9a9bbbd0501"><enum>(2)</enum><header>Exception</header><text>Any
rule prescribed under paragraph (1) shall not be applicable to or otherwise
include services provided by those persons or entities identified in section
1001(6)(B) or section 1001(7)(B).</text>
</paragraph><paragraph id="IDc1fc550761a34f3d825a4765edea8892"><enum>(3)</enum><header>Debt relief
service defined</header><text>In this subsection, the term <term>debt relief
service</term> means any service represented, directly or by implication, to
renegotiate, or in any way alter the terms of payment or other terms of the
debt between a consumer and one or more unsecured creditors or debt collectors,
including a reduction in the balance, interest rate, or fees owed by a consumer
to an unsecured creditor or debt collector.</text>
</paragraph></subsection><subsection id="IDd7ed981fd66444eabe9dad10cce1514d"><enum>(c)</enum><header>Procedure</header><text display-inline="yes-display-inline">All rulemaking under this title shall be
conducted in accordance with section 553 of title 5, United States Code, and
shall not be subject to other procedures set forth in section 18 of the Federal
Trade Commission Act (15 U.S.C. 57a).</text>
</subsection></section><section id="ID432130eb1fac4129ab8a20bf42655d7d"><enum>1011.</enum><header>Civil
liability</header>
<subsection id="ID4dc82c9141c64a45af9560510b3d9f4b"><enum>(a)</enum><header>Liability
established</header><text>Any debt settlement provider who fails to comply with
any provision of this title with respect to any consumer shall be liable to
such consumer in an amount equal to the sum of the amounts determined under
each of the following:</text>
<paragraph id="ID4adf9e0b686544439b497878a7af81f4"><enum>(1)</enum><header>Actual
damages</header><text>The greater of—</text>
<subparagraph id="ID23c7f44592424fb487d43d109a7b0f49"><enum>(A)</enum><text>the amount of any
actual damage sustained by such consumer as a result of such failure; or</text>
</subparagraph><subparagraph id="ID31df77640b46486ba66dd0d8338c258b"><enum>(B)</enum><text>any amount paid
by the consumer to the debt settlement provider.</text>
</subparagraph></paragraph><paragraph id="ID135bc7278a4f4b58a9437a37d6c61b5d"><enum>(2)</enum><header>Statutory
damages</header><text>An amount determined by the court of not less than $1,000
nor more than $5,000 per violation.</text>
</paragraph><paragraph id="IDaf3b2003fd99433a9b44c6db0a221abc"><enum>(3)</enum><header>Punitive
damages</header>
<subparagraph id="ID26b3d6b1fd7c40dea7cdc0f544b40443"><enum>(A)</enum><header>Individual
actions</header><text>In the case of any action by an individual, such
additional amount as the court may allow.</text>
</subparagraph><subparagraph id="ID8d373bc0948c4701933dcd43d3097101"><enum>(B)</enum><header>Class
actions</header><text>In the case of a class action, the sum of—</text>
<clause id="ID22dd7c83621543c8a8a2255b791190fc"><enum>(i)</enum><text>the aggregate of
the amount which the court may allow for each named plaintiff; and</text>
</clause><clause id="IDa71aa58482194c7fa2559d6d30562656"><enum>(ii)</enum><text>the aggregate of
the amount which the court may allow for each other class member, without
regard to any minimum individual recovery.</text>
</clause></subparagraph></paragraph><paragraph id="IDabf7058b978b42b5816b62409c69be6b"><enum>(4)</enum><header>Attorneys’
fees</header><text>In the case of any successful action to enforce any
liability under paragraph (1), (2), or (3), the costs of the action, together
with reasonable attorneys’ fees.</text>
</paragraph></subsection><subsection id="ID471c406150d240edb3ce348c777893b7"><enum>(b)</enum><header>Factors To be
considered in awarding punitive damages</header><text>In determining the amount
of any liability of any debt settlement provider under subsection (a)(2), the
court shall consider, among other relevant factors—</text>
<paragraph id="ID2629066fc47b4d51947e8b38ab44a8f7"><enum>(1)</enum><text>the frequency and
persistence of noncompliance by the debt settlement provider;</text>
</paragraph><paragraph id="ID4e29a7905685476caa12334b76d6da2f"><enum>(2)</enum><text>the nature of the
noncompliance;</text>
</paragraph><paragraph id="ID783149f78f5a48bd9e8aa0aca039bfbb"><enum>(3)</enum><text>the extent to
which such noncompliance was intentional; and</text>
</paragraph><paragraph id="IDf0d193ff4b3f451d92e2b2aab76d17d1"><enum>(4)</enum><text>in the case of
any class action, the number of consumers adversely affected.</text>
</paragraph></subsection></section><section id="ID9f7b81cbafa04e6fb31ed5da98558bc7"><enum>1012.</enum><header>Enforcement
by Federal Trade Commission</header>
<subsection id="HCD840C63462B481D9EA991C7E852238"><enum>(a)</enum><header>In
general</header><text>The Commission shall enforce the provisions of this title
in the same manner, by the same means, and with the same jurisdiction, powers,
and duties as though all applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated into and made part of
this title.</text>
</subsection><subsection id="ID4867841263df428ea93e1b44f7bc6d2a"><enum>(b)</enum><header>Unfair or
deceptive acts or practices</header><text>A failure to comply with a provision
of this title or a violation of a rule prescribed under section 1010 shall be
treated as a violation of a rule defining an unfair or deceptive act or
practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission
Act (15 U.S.C. 57a(a)(1)(B)).</text>
</subsection></section><section id="id1263BBA03711452281481D0A3096645E"><enum>1013.</enum><header>Action by
States</header>
<subsection id="id64D4131010CF4E7F8BE9D9DC2974AC21"><enum>(a)</enum><header>In
general</header><text>In any case in which the attorney general of a State has
reason to believe that an interest of the residents of the State has been or is
threatened or adversely affected by the engagement of any person subject to a
provision of this title or a rule prescribed under section 1010 in a practice
that violates such provision or rule, the State may, as parens patriae, bring a
civil action on behalf of the residents of the State in an appropriate district
court of the United States or other court of competent jurisdiction—</text>
<paragraph id="idEC2B41F33822459B9B303CBBA8FC1DED"><enum>(1)</enum><text>to enjoin that
practice;</text>
</paragraph><paragraph commented="no" id="id64B8BC77524F4969B69996584A72CE39"><enum>(2)</enum><text>to enforce
compliance with the provision or rule; or</text>
</paragraph><paragraph id="idE3B20B165B394D2DA31D8B3DC139DDBC"><enum>(3)</enum><text>to obtain damages
under section 1011 on behalf of residents of the State.</text>
</paragraph></subsection><subsection id="id6098EED14C42412B82DC4EFB9D94C34E"><enum>(b)</enum><header>Attorneys'
fees</header><text>In the case of any successful action under paragraph (1),
(2), or (3) of subsection (a), the attorney general of the State bringing the
action shall be awarded the costs of the action and reasonable attorneys' fees
as determined by the court.</text>
</subsection><subsection id="id2724F1BDE09F4A2D8521F59360770F28"><enum>(c)</enum><header>Rights of
Federal Trade Commission</header>
<paragraph id="idC0B790DC068D4BC1A67B1299122C65FB"><enum>(1)</enum><header>Notice to
Federal Trade Commission</header>
<subparagraph id="id382AB7FFFA0147ABA5FE47CB012A4AB3"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraph (C), the attorney
general of a State shall notify the Federal Trade Commission in writing of any
civil action under subsection (a), prior to initiating such civil
action.</text>
</subparagraph><subparagraph id="id9CA7BBEEF49546DE9BE7667CFB63720B"><enum>(B)</enum><header>Contents</header><text>The
notice required by subparagraph (A) shall include a copy of the complaint to be
filed to initiate such civil action.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id06BB6C08B4D845E987AF62E06484E082"><enum>(C)</enum><header>Exception</header><text>If
it is not feasible for the attorney general of a State to provide the notice
required by subparagraph (A), the State shall provide notice immediately upon
instituting a civil action under subsection (a).</text>
</subparagraph></paragraph><paragraph id="idFDA71129413D49D091CB7378BDC4CDF7"><enum>(2)</enum><header>Intervention by
Federal Trade Commission</header><text>Upon receiving notice required by
paragraph (1) with respect to a civil action, the Commission may—</text>
<subparagraph id="id29250F981EFF4C33AAC89F00E4FD620D"><enum>(A)</enum><text>intervene in such
action; and</text>
</subparagraph><subparagraph id="id58B841634B2144CFAF8EA4CB2D5F1208"><enum>(B)</enum><text>upon
intervening—</text>
<clause id="id1D60CA42B48142F7A2BB2BC56A3C0725"><enum>(i)</enum><text>be heard on all
matters arising in such civil action;</text>
</clause><clause id="idD15471F0E29C4A19BAC6B9D862012F33"><enum>(ii)</enum><text>remove the
action to the appropriate district court of the United States; and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idEFA533783CF84EC280AA505434FBDA1B"><enum>(iii)</enum><text>file petitions
for appeal of a decision in such action.</text>
</clause></subparagraph></paragraph></subsection><subsection id="HD352B695DE604A66B0CCE992535EF35B"><enum>(d)</enum><header>Investigatory
powers</header><text>Nothing in this section may be construed to prevent the
attorney general of a State from exercising the powers conferred on such
attorney general by the laws of such State to conduct investigations or to
administer oaths or affirmations or to compel the attendance of witnesses or
the production of documentary and other evidence.</text>
</subsection><subsection id="HFCAC11A2050245859700994D9E465916"><enum>(e)</enum><header>Effect of action
by Federal Trade Commission</header><text>If the Federal Trade Commission
institutes a civil action or an administrative action to enforce a violation of
a provision of this title or a rule prescribed under section 1010, no State
may, during the pendency of such action, bring a civil action under subsection
(a) against any defendant named in the complaint of the Commission for
violation of a provision of this title or rule prescribed under section 1010
that is alleged in such complaint.</text>
</subsection><subsection id="HBF9D8AC8EC23413BB5041BD600316B74"><enum>(f)</enum><header>Actions by other
State officials</header>
<paragraph id="HFCA071F7EC78467D0083EF5E74487B8"><enum>(1)</enum><header>In
general</header><text>In addition to actions brought by an attorney general of
a State under subsection (a), an action may be brought by officials in a State
who are so authorized.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H391A9B80D5FE465498F0E3E2B5E6C92F"><enum>(2)</enum><header>Savings
provision</header><text>Nothing contained in this section may be construed to
prohibit an authorized official of a State from proceeding in a court of such
State on the basis of an alleged violation of any civil or criminal statute of
such State.</text>
</paragraph></subsection></section><section id="ID164e5cb26bc0479bbc1e64c3f8b6756f"><enum>1014.</enum><header>Statute of
limitations</header><text display-inline="no-display-inline">Any action to
enforce any liability under section 1011 may be brought before the later
of—</text>
<paragraph id="ID246e16ce047e43e78b0d82726e864707"><enum>(1)</enum><text>the end of the
5-year period beginning on the date of the occurrence of the violation
involved; or</text>
</paragraph><paragraph id="ID3ed8074f3fbc491fb6c4205721c2a4e3"><enum>(2)</enum><text>in any case in
which any debt settlement provider has materially and willfully misrepresented
any information that the debt settlement provider is required, by any provision
of this title, to disclose to any consumer and that is material to the
establishment of the debt settlement provider’s liability to the consumer under
this title, the end of the 5-year period beginning on the date of the discovery
by the consumer of the violation.</text>
</paragraph></section><section id="ID2e6e39bfee8f44cc9f5458bb7534a444"><enum>1015.</enum><header>Relation to
State law</header><text display-inline="no-display-inline">This title shall not
annul, alter, affect, or exempt any person subject to the provisions of this
title from complying with the law of any State except to the extent that such
law is inconsistent with any provision of this title, and then only to the
extent of the inconsistency. For purposes of this section, a State statute,
regulation, order, or interpretation is not inconsistent with the provisions of
this title if the protection such statute, regulation, order, or interpretation
affords any person is greater than the protection provided under this title and
any subsequent amendments. Nothing in this title shall limit or prohibit a
State from prohibiting or otherwise restricting the provision of debt
settlement services, or imposing and administering a system of additional
requirements, prohibitions, registration, or
licensure.</text>
</section>.
(b)
(1)Not later than 60 days after the date of the enactment of
this Act, the Federal Trade Commission shall commence a rulemaking to prescribe
the following:
(A)The form of the
written notices required under subparagraphs (M) and (N) of subsection (a)(2)
and subsection (b)(5) of section 1002 of the Consumer Credit Protection Act, as
added by subsection (a) of this section.
(B)The form of the
statement required under subsection (e) of such section 1002.
(2)The
Federal Trade Commission shall complete the rulemaking required by paragraph
(1) not later than 1 year after the date of the enactment of this Act.
(3)All rulemaking under paragraph (1) shall be
conducted in accordance with section 553 of title 5, United States Code, and
shall not be subject to other procedures set forth in section 18 of the Federal
Trade Commission Act (15 U.S.C. 57a).
(c)Title X of the Consumer
Credit Protection Act, as added by subsection (a) of this section, shall take
effect on the date that is 60 days after the date of the enactment of this
Act.